U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19141 / March 17, 2005
SECURITIES AND EXCHANGE COMMISSION v. BODYSCAN CORPORATION And ANTHONY SCIUTO, Civil Action No. SACV 05-256 DOC (RNBx) (C.D. Cal.)
SEC SUES SOUTHERN CALIFORNIA MEDICAL SERVICES PROVIDER FOR FRAUD
The Securities and Exchange Commission ("Commission") filed a complaint today against BodyScan Corporation, a company whose shares are quoted on the Pink Sheets under the symbol "BDYS", and Anthony Sciuto, age 59, of San Clemente, California, BodyScan's president and CEO, charging them with making a series of materially false and misleading statements about their operation of "imaging centers" in violation of the antifraud provisions of the federal securities laws.
BodyScan, a Nevada corporation located in Irvine, California, purports to operate diagnostic or "imaging" centers that utilize electron-beam scanners to detect disease or other abnormalities of the internal organs at an early stage. The Commission's complaint alleges that, from November 2003 to the present, the defendants made and disseminated false statements concerning the number of imaging centers operated by BodyScan, the company's prospects for growth, and its anticipated earnings. According to the complaint, BodyScan issued a series of press releases between November 2003 and February 2004 wherein it stated that it operated up to eight imaging centers throughout the United States. BodyScan reinforced and expanded upon that representation by providing contact information for 11 imaging centers on its website until August 2004. Sciuto made additional misrepresentations in a May 2004 interview with an online investor newsletter, in which he stated that BodyScan was "negotiating" to acquire 12 additional imaging centers, was "on track" to have 20 imaging centers operating within one year, and that company sales would be "around the $20 million mark" for year-end 2004.
The statements concerning the number of imaging centers operated by BodyScan were false and Sciuto's projections concerning the growth of the number of imaging centers and year-end company sales were made without a good faith basis. In reality, the number of BodyScan imaging centers had been dwindling since early 2003, due to the company's failure to remain current on its premises and equipment-leasing obligations. As of January 2004, BodyScan operated only three imaging centers, only two of which had functioning machinery. By March 2004, BodyScan was unable to service patients at any of its imaging centers.
The Commission has charged BodyScan and Sciuto with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks a final judgment permanently enjoining the defendants from future violations of the antifraud provisions, civil penalties, and an order that bars Sciuto from serving as an officer or director of any company.
The Commission acknowledges the cooperation and assistance of the Australian Securities & Investments Commission in this matter.