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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19203 / April 27, 2005

Securities and Exchange Commission v. Bio-Heal Laboratories, Inc., Defendant, MRMG Holdings, Inc., Kess Associates, Inc. ICOR, Inc., Bela Enterprises, LLC, and Gibson Island Enterprises, LLC, Relief Defendants, No. 05-21116-CIV-Seitz (S.D. Fla., filed April 25, 2005)

On April 25, 2005, the United States Securities and Exchange Commission (Commission) filed an emergency civil action in the United States District Court for the Southern District of Florida against Bio-Heal Laboratories, Inc. (Bio-Heal) in connection with its fraudulent issuance of Bio-Heal stock, and to recover approximately $10 million in proceeds generated from the sale of the illegally issued shares.

The Commission's Complaint alleges that Bio-Heal is a publicly-held company quoted on the Over-The-Counter Pink Sheets that claims to develop topical natural healing products in Nicaragua. The Complaint alleges that in February 2005, Bio-Heal issued 12 million shares of its stock to Relief Defendants MRMG Holdings (MRMG), Kess Associates, Inc. (Kess) and ICOR, Inc. These shares were issued without a restrictive legend based on an attorney opinion letter claiming that the 12 million shares were exempt from registration with the Commission pursuant to Rule 504 of Regulation D of the Securities Act. According to the Complaint, Bio-Heal is subject to the reporting requirements of Section 13 of the Exchange Act and, therefore, is not entitled to use Rule 504 of Regulation D as an exemption from registration. The Complaint further alleges that the attorney opinion letter is a fraud and that the telephone and facsimile numbers on it actually belong to a legal aid service which does not employ the attorney providing the opinion letter, nor does it furnish securities opinion letters.

The Complaint alleges that MRMG and Kess transferred their Bio-Heal shares to two other Relief Defendants located offshore, Bela Enterprises, LLC, and Gibson Island Enterprises, LLC, who reaped more than $10 million in profits by dumping Bio-Heal shares while the stock was being touted to investors through the Internet. On April 8, 2005, the Commission suspended trading in Bio-Heal stock. The Commission filed its action to permanently restrain and enjoin Bio-Heal from continuing to illegally issue its shares and to restrain and enjoin Relief Defendants from trading in these illegal shares.

The Commission's Complaint charges Bio-Heal with violations of Sections 5(a) and 5(c) of the Securities Act of 1933 and violations of Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court entered a temporary restraining order against Bio-Heal, and an order freezing assets and a repatriation order against Bio-Heal and the Relief Defendants.

SEC Complaint in this matter


http://www.sec.gov/litigation/litreleases/lr19203.htm


Modified: 04/27/2005