"Part 8" of 8K
- 4 -
registered with the Commission pursuant to Section 12(g) of the Exchange Act.
Until the Commission suspended trading in SOE's stock on October 7, 1996 (which
suspension has since expired), SOE's stock was quoted on the NASDAQ Bulletin
Board.
OTHER ENTITIES
16. WEINBERG, PERSHES & CO., P.A. ("WPC"), accountants and
auditors, a Florida accounting firm, were SOE's independent auditors.
17. MERLE S. FINKEL, C.P.A., represents himself as being
affiliated with M.S. Finkel & Co., accountants and auditors. Within hours of
being hired as SOE's independent auditor, Finkel, on or about September 21,
1996, provided an unqualified audit opinion on SOE's financial statements for
fiscal years ending February 28, 1995 and February 29, 1996.
18. MARIA IACOVELLI, age 31, is the Corporate Secretary of SOE and
is its other director.
THE FRAUDULENT SCHEME
HUTTOE DIRECTS A MASSIVE
UNREGISTERED DISTRIBUTION OF SOE STOCK
19. SOE entered the video tele-conferencing business on February
12, 1996, when it acquired ICMX Federal Systems, Inc., whose sole business was
manufacturing and distributing video tele-conferencing equipment.
20. Beginning by at least March 9, 1995, and continuing at least
through July 26, 1996, SOE, under the direction of Huttoe, began a massive
distribution of tens of millions of shares of unrestricted, freely-trading
company stock to Huttoe's nominees and confederates, even though the
distribution had not been registered with the Commission.
- 5 -
21. Huttoe knowingly or recklessly deceived the Transfer Agent,
who issued the shares without restrictive legends, into believing that the
shares had been properly registered with the Commission, by falsifying the
Forms S-8 presented to the Transfer Agent to indicate prior filing with the
Commission.
SOE AND HUTTOE FILE THE FIRST SET OF MATERIALLY
FALSE AND MISLEADING FORMS S-8
22. On or about December 6, 1995, SOE, under Huttoe's direction,
filed with the Commission eleven materially false and misleading registration
statements on Forms S-8.
23. The millions of shares purportedly registered on the Forms S-8
had already been distributed prior to the filing.
24. Contrary to representations in the Forms S-8, the SOE stock
was distributed to persons who had performed no services for the company that
would qualify the stock for S-8 registration.
25. SOE and Huttoe knew or recklessly disregarded the fact that
these filings were materially false and misleading.
SOE ISSUES MORE UNREGISTERED SHARES
26. SOE, under Huttoe's direction, continued to issue additional
unrestricted, free-trading SOE shares without registering the shares with the
Commission. Commencing on or about December 20, 1995, and continuing at least
through July 26, 1996, SOE issued approximately 35.5 million additional such
unregistered shares.
27. In or around February 1996, as part of this additional
distribution, SOE issued unrestricted, free- trading shares of SOE stock, and a
"note payable," to investors
- 6 -
in a $2.5 million purported "private placement." These shares were distributed
to investors in proportion to the amount of money invested.
28. At the time these shares were issued and distributed, they
were not registered with the Commission. |
