Eight Individuals Charged in Florida-based Firm Investment Fraud Scheme that Defrauded Over 70 Investors
A grand jury in Miami indicted eight individuals for their alleged participation in an investment fraud scheme that targeted investors throughout the Nation, defrauding them out of approximately $3 million. The main office operated out of Daytona Beach, Florida.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Rockey Hatfield, 61, of Safety Harbor, Florida, Steve Lovern, 62, of Atlanta, Georgia, Steve Bailen, 58, of North Miami, Wayne Scott Simpson, 47, of Pompano Beach, Donald Braxton, 66, of Hollywood, William Paul Hamilton, 57, of Miramar, Dennis Swerdlen, 63, of Boca Raton, and Paula Saccomanno, 60, of Boca Raton, were charged with conspiracy to commit mail fraud and wire fraud, and substantive mail fraud charges. Some of the defendants were also charged with substantive wire fraud counts.
The Indictment charges a conspiracy involving the sale of ownership units of patents, with a stock conversion option. According to the Indictment, from December 2012 to September 2017, the defendants solicited investors located throughout the United States to buy ownership units in patents developed by N1 Technologies Inc. and/or NanoSave Technologies Inc. (N1). The defendants claimed N1 researched, developed and obtained breakthrough nano-based technological patents. The sales employees in turn pitched ownership units of these patents to investors.
The materially false statements, including, but not limited to, that the patent unit and stock sales included no commissions or fees, that sale agents were compensated with stock, that investor funds would be used for N1’s company expenditures on things other than commissions or fees, that an investor was purchasing an ownership unit of a patent with a corresponding United States Patent Office number, and that investors would collect royalty payments based on N1’s patented products for the life of the patent.
In fact, approximately 90% of investor proceeds were used by the defendants as commissions, fees and means to facilitate the fraud; the defendants were paid substantial commissions, not with stock; N1 had not been issued any patents, despite statements to the contrary; and, no investor collected a royalty payment nor was any patent sold in order to obtain a royalty payment.
Mr. Greenberg commended the investigative efforts of the FBI. Mr. Greenberg also thanked the Securities and Exchange Commission’s Miami Regional Office for their assistance. This case is being prosecuted by Assistant U.S. Attorney Roger Cruz.
Individuals who believe that they may be a victim in this case should contact the FBI at www.fbi.gov for more information.
An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.