U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21340 / December 17, 2009.
Securities and Exchange Commission v. Inter Global Technologies, Inc. and Michael E. Tomayko. (U.S.D.C., Northern District of Texas, Dallas Division, Civil Action No. 3:07-CV-1397-K)
SEC OBTAINS AMENDED JUDGMENT IN OFFERING FRAUD PROHIBITING ANY FURTHER OFFERS OR SALES OF SECURITIES BY DEFENDANTS
On December 10, 2009, the Securities and Exchange Commission obtained an Amended Final Judgment against Defendants Inter Global Technologies, Inc. ("IGT") and Michael E. Tomayko. The Amended Judgment adds a conduct-based injunction against Defendants, prohibiting them from offering or selling any securities, including notes, issued by Defendants or any entity owned or controlled, directly or indirectly, by Tomayko. This relief was necessary because the Defendants continued to raise funds from investors using improper means even after being enjoined last year.
The SEC originally sued Defendants in August 2007, alleging that they had illegally raised millions of dollars through an unregistered offering of IGT securities to hundreds of investors worldwide. See Litigation Rel. No. 20244 (August 16, 2007). The SEC alleged that Defendants made elaborate claims about supposedly lucrative refineries that Defendants and their foreign partners planned to build in Indonesia. The SEC charged, however, that these claims were false and completely unfounded and that Defendants instead dissipated investor funds to support Tomayko's international jetsetter lifestyle (and to cover his house payments and other personal expenses), or sent them to mysterious foreign nationals who provided no accountability for the funds.
Defendants consented to a Final Judgment in May 2008, which permanently enjoined them from committing securities fraud and other violations, and ordered them to pay civil penalties totaling $100,000 and disgorgement with prejudgment interest of more than $10.7 million. Defendants, however, continued to raise money from investors even after this judgment was entered. As detailed in the SEC's Motion to Amend Final Injunction, Defendants raised at least $1.7 million between May 2008 and September 2009, primarily through sales of promissory notes that were often secured by shares of IGT stock. In raising these funds, Defendants continued to regale investors with supposed developments with the purported refinery projects, which Defendants constantly characterized as being on the verge of success.
In truth, Defendants used the additional funds primarily to pay Tomayko's living expenses. Defendants' bank and credit card statements revealed that Tomayko spent more than $200,000 of investor funds on such items as house and luxury automobile payments, utilities, lawn and pool maintenance and country club dues. An additional $43,000 went toward such sundries as restaurant meals, groceries, dry cleaning, car washes and gasoline. Tomayko also spent more than $36,000 at luxury retailers, and donated $25,000 of investor funds to his church. There were also $366,000 in cash withdrawals and checks to Tomayko. Defendants also sent more than $350,000 overseas to IGT's supposed Indonesian partner and two foreigners who were supposed to provide access to Swiss financing. Investors, however, have nothing tangible to show for these expenditures since, as the SEC asserts in its Motion, Defendants' purported plans to build Indonesian refineries are no closer to fruition today than when Defendants first began soliciting investors a decade ago.
The additional injunctive relief granted by the Amended Judgment provides a blanket prohibition against Defendants offering or selling any securities issued by them or any company Tomayko owns or controls, regardless of whether the offering is registered or exempt from registration or involves fraud. Future violations of this or other elements of the Amended Judgment are punishable by civil and criminal contempt.