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UNITED STATES DISTRICT COURT
COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF JURISDICTION AND VENUE 1. The Securities and Exchange Commission ("Commission" or "SEC") brings this action pursuant to Sections 20(b), 20(d) and 20(e) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 77t(b), 77t(d) and 77t(e)] and Sections 21(d) and 21(e) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78u(d) and 78u(e)] to enjoin the defendants from engaging in transactions, acts, practices and courses of business alleged in this complaint, and transactions, acts, practices, and courses of business of similar purport and object, for disgorgement of illegally obtained funds and other equitable relief, and for civil money penalties. This Court has jurisdiction of this action pursuant to Sections 20(b), 20(d), 20(e) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), 77t(e) and 77v(a)] and Sections 21(d), 21(e) and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa]. 2. The defendants, directly and indirectly, have made use of the mails, the means and instruments of transportation and communication in interstate commerce, and the means and instrumentalities of interstate commerce, in connection with the transactions, acts, practices and courses of business alleged in this Complaint. 3. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa] because defendant Pietrzak resides within this district and is an attorney licensed to practice law in the State of Illinois. By virtue of that professional license, Pietrzak serves as general counsel to Hexagon Consolidated Companies of America, Inc. ("HCCA") and certain of the actions set forth herein occurred within the Northern District of Illinois. Pietrzak also serves as executive vice president, secretary and a director of HCCA, and various meetings of HCCA's board of directors occurred within the Northern District of Illinois. SUMMARY 4. This matter involves pervasive and protracted efforts of defendants Pietrzak and Furlong, officers of HCCA, to fraudulently increase the stock price and value of the company by, among other means, filing false and misleading registration statements and periodic and current reports, and by issuing false press releases and a letter to shareholders. 5. In addition, Furlong, HCCA's chief executive officer ("CEO"), and Pietrzak, its general counsel, fraudulently sold stock and Furlong failed to file any stock ownership reports. 6. Pietrzak and Furlong sold a total of more than 79.7 million shares of stock, fraudulently receiving at least $4.2 million. 7. From 1996 through 2001, HCCA reported to the public that it was an entity with substantial assets when, in fact, it was virtually worthless. 8. During this time, HCCA overstated its assets by amounts ranging from $261,650 to $318,648,821 (119% to 95,920%) in multiple periodic and current reports on Forms 10-KSB, 10-QSB and 8-K, registration statements on Form 10-SB, and in press releases and a letter to shareholders. 9. HCCA also failed to properly report a change in its independent accountants during 2001 and remains delinquent in filing its Exchange Act reports since filing its September 30, 1999 Form 10-QSB on December 14, 1999. 10. At least one other individual assisted Pietrzak and Furlong with their fraud. Specifically, defendant Donald E. Jordan ("Jordan"), a licensed assayer, issued false and misleading reports that valued HCCA's mining assets at more than $2 billion. VIOLATIONS 11. Defendant Pietrzak has engaged, and unless restained and enjoined by this Court, will continue to engage in acts and practices which constitute and will constitute violations of Section 17(a) of the Securities Act [15 U.S.C. 77q(a)], Sections 10(b) and 13(b)(5) of the Exchange Act [15 U.S.C. 78j(b) and 78m(b)(5)] and Rules 10b-5 and 13b2-1 thereunder [17 C.F.R. 240.10b-5 and 240.13b2-1], and aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. 78m(a), 78m(b)(2)(A) and 78m(b)(2)(B)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1, 240.13a-11 and 240.13a-13]. 12. Defendant Furlong has engaged, and unless restained and enjoined by this Court, will continue to engage in acts and practices which constitute and will constitute violations of Section 17(a) of the Securities Act [15 U.S.C. 77q(a)], Sections 10(b), 13(b)(5) and 16(a) of the Exchange Act [15 U.S.C. 78j(b), 78m(b)(5) and 78p(a)] and Rules 10b-5, 13b2-1, 16a-2 and 16a-3 thereunder [17 C.F.R. 240.10b-5, 240.13b2-1, 240.16a-2 and 240.16a-3], and is liable on aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. 78m(a), 78m(b)(2)(A) and 78m(b)(2)(B)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1, 240.13a-11 and 240.13a-13]. 13. Defendant Jordan has engaged, and unless restained and enjoined by this Court, will continue to engage in acts and practices which constitute and will constitute violations of Section 17(a) of the Securities Act [15 U.S.C. 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. 78j(b), 78m(b)], and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5] and aiding and abetting violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a] and Rule 13a-1 thereunder [17 C.F.R. 240.13a-1]. THE DEFENDANTS 14. Michael J. Pietrzak, 53, of Carol Stream, Illinois, is licensed to practice law in Illinois. 15. On or about November 1, 1996, Pietrzak became general counsel, executive vice president, secretary and a director of HCCA. 16. On or about September 1997, Furlong appointed Pietrzak as HCCA's principal financial officer. In 1985, Pietrzak pled guilty to a crime in Illinois for aiding and abetting others in the misapplication of bank funds, for which he paid a fine. 17. Maurice W. Furlong, 54, of Reno, Nevada, has served as HCCA's chairman, president and CEO since November 1984. 18. Furlong has a long history of securities law violations. In 1977, the securities divisions of the states of Michigan and Wisconsin entered into agreements with Furlong that limited his ability to sell stock in those states. 19. On November 30, 1988, in a Commission action alleging offering fraud, the U.S. District Court for the Middle District of Tennessee entered a Final Judgment of Permanent Injunction against Furlong enjoining him from violating Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and in January 1989, entered a Final Judgment of Permanent Injunction against HCCA for the same violations. 20. In March 1994, the Commissioner of Commerce and Insurance for Tennessee ordered two predecessors of HCCA and Furlong to cease and desist violating various state securities laws, including its antifraud fraud provisions. 21. In December 1994, the State of South Carolina ordered HCCA and Furlong to cease and desist violating various state securities laws, including its antifraud and securities registration provisions. 22. Donald E. Jordan, 79, of Henderson, Nevada, is a registered assayer in Arizona. 23. An assayer specializes in analyzing the presence, absence, or quantity of components in mineral samples, but not the economic value of such minerals. 24. Jordan has a B.S. in chemistry and a Ph.D. in analytical chemistry. 25. Jordan issued reports in February 1996 and May and November 1997 stating that HCCA held ore valued at approximately $2.4 billion, and in August 1997 and December 1999 stating that HCCA held 500,000 tons of minerals worth more than $3 billion. RELATED PERSONS AND ENTITIES 26. Hexagon Consolidated Companies of America, Inc. is a Nevada corporation headquartered in Reno, Nevada. HCCA was originally incorporated in Montana in 1967 as Cadgie Taylor Company. After a merger and various name changes, the company changed its name again in July 1999 from Health Care Centers of America, Inc. to Hexagon Consolidated Companies of America, Inc. HCCA's filings disclosed that it had no employees. HCCA never reported any revenues and is a development stage company. 27. HCCA's common stock, which is registered pursuant to Section 12(g) of the Exchange Act, was quoted on the OTC Bulletin Board until it was declared ineligible on February 24, 2000, for failing to meet the NASD's "eligible securities" criteria (Rule 6530). HCCA's stock continues to trade in the over-the-counter market. BACKGROUND 28. Over the years, HCCA professed to be in various businesses, including mining, real estate investment, and operating health care centers; none of these "businesses" were ever operational. 29. HCCA represented to the public that its future success depended upon its ability to obtain funding to process its precious metals concentrate. 30. HCCA further disclosed that it anticipated obtaining such funding from the use or sale of the ore concentrates, television advertising time credit certificates, and real estate. 31. In fact, HCCA had no reasonable basis to expect any funding to come from these assets because the assets had little or no market value, or in some cases, it did not even own the assets. HCCA'S ACCOUNTING IMPROPRIETIES A. HCCA Improperly Recognized and Valued Mining Assets i. Skull Valley, Arizona 32. On or about August 24, 1995, HCCA issued 100 million shares of stock to acquire a company whose only significant asset was a sublease. 33. HCCA claimed in its filings that the sublease, dated May 11, 1992, provided ownership to 500,000 tons of ore inventory located in Skull Valley, Arizona. 34. The underlying lease provided that the lease could not be sold or assigned or exploration and mining operations initiated without the approval of the State of Arizona. HCCA took no steps at the time to secure such approval. Pietrzak and Furlong, among others at HCCA, each received copies of the lease. 35. HCCA recorded this asset on its books and valued the ore at $200 million. 36. This valuation was a departure from generally accepted accounting principles ("GAAP"). 37. Since HCCA failed to establish the fair value of any ore, or ownership of the ore, on the subleased land, there was no basis under GAAP to assign any value to such an asset in the books and records of the company. 38. HCCA never owned the ore and, accordingly, never should have recorded the ore as an asset. 39. The ore that HCCA valued at $200 million consisted of the tailings from a prior mining operation on the leased property. 40. Tailings are the materials that remain after the valuable minerals have been extracted from a mineral deposit. 41. HCCA's only interest in the tailings derived from the mineral lease, which merely gave HCCA the right to extract minerals, if any, from the ore. Arizona, as lessor, retained ownership of the ore. 42. Moreover, HCCA had no basis to value its interest in the mineral lease at $200 million. 43. HCCA never obtained an objectively determinable fair value for the ore. 44. On or about May 14, 1997, when the company's auditor was conducting his audit, he asked Furlong to engage an engineer or geologist to determine the value of the ore. Furlong refused and told the auditor to rely on an assay report. 45. On June 25, 1997, defendant Jordan, without a reasonable basis therefore, sent a report to the auditor stating that the value of the ore was approximately $4 billion. 46. Reliance on an assay report was improper because such reports only describe the mineral components of a substance, and do not describe the economic viability of extracting such minerals. 47. HCCA lacked any system to evaluate whether the value initially assigned to this ore asset, or its subsequent carrying value, conformed with GAAP. 48. For example, HCCA failed to obtain an appraisal or evaluation by a geologist to determine if it initially reported the asset at its fair value. 49. HCCA also failed to conduct any subsequent tests to determine whether the value of the ore had become impaired. 50. Pietrzak and Furlong shared responsibility to keep HCCA's books, records and accounts, and establish and maintain its internal accounting controls. 51. Pietrzak and Furlong each participated in recording this transaction by discussing and deciding how and when to book this asset. There was no basis to record or maintain this asset on HCCA's books. 52. This asset appeared in HCCA's March 1997, June 1997, September 1997, March 1998, June 1998, September 1998, March 1999, June 1999 and September 1999 reports on Form 10-QSB, the amendments to the March and June 1997 Forms 10-QSB, December 1997 Form 10-KSB, December 1998 Form 10-KSB and the December 1999 amendment thereto, and the August 1997 and December 1999 amendments to the Form 10-SB. ii. Barstow, California 53. On or about February 6, 1997, HCCA acquired 17 mining claims located in Barstow, California, in exchange for 375 million shares of HCCA restricted stock. 54. HCCA acquired the claims, which were located on property owned by the U.S. Government, from Zarzion, Ltd., a company managed by Furlong. 55. Zarzion purportedly acquired the claims in 1996 from Furlong's brother and a third party in exchange for HCCA restricted stock worth approximately $275,000. 56. HCCA recorded the claims it acquired from Zarzion at $69,375,000. 57. This valuation was a departure from GAAP because HCCA could not demonstrate the existence of any economically recoverable mineral reserves at the site. 58. HCCA has never discovered any economically recoverable reserves located on this property. 59. There was no basis under GAAP for HCCA to assign any value to this transaction. 60. On February 6, 1997, HCCA held a special board meeting attended by Furlong and Pietrzak, among others. These directors, led by Furlong, discussed the "potential" acquisition of the California property that was owned by Zarzion along with the mining history of the property. 61. Notwithstanding the lack of evidence to support the existence of any economically recoverable minerals on the claims, Pietrzak and Furlong participated in the decision to approve this transaction and to record it at $69,375,000. 62. Contrary to the board minutes, no assays were reviewed by Pietrzak and Furlong at the time. Also, HCCA never obtained an appraisal of the property from a qualified professional. 63. HCCA, Pietrzak and Furlong lacked any basis for believing that minerals located on the property were economically recoverable. 64. The claims are located on property that was abandoned at the outset of World War II. 65. On March 12, 1998, after she had left the company, a former director, CFO and treasurer of HCCA sent a letter to Furlong stating that this transaction should be reversed unless Furlong obtained an appraisal for the property. 66. On April 4, 1998, Furlong sent a response letter to the former director, CFO and treasurer, which Pietrzak reviewed, telling her that her suggestion to reverse the transaction was "silly and naïve." 67. This asset appeared in HCCA's March 1997, June 1997, September 1997, March 1998, June 1998, September 1998, March 1999, June 1999 and September 1999 reports on Form 10-QSB, the amendments to the March and June 1997 Forms 10-QSB, December 1997 Form 10-KSB, December 1998 Form 10-KSB and the December 1999 amendment thereto, and the December 1999 amendment to the Form 10-SB. 68. Subsequently, in a press release issued January 8, 2001, HCCA announced that it was postponing its (planned) operations at this location. B. HCCA Improperly Recognized and Valued Real Estate 69. From August 1997 through December 1999, HCCA reported in various filings made with the Commission and elsewhere that it owned real estate collectively called "Investments in Future Acquisitions." 70. HCCA valued these assets, which were to be acquired through the issuance of stock, at approximately $23.5 million at December 31, 1994, and at December 31, 1995, December 31, 1996, March 31, 1997 and June 30, 1997. 71. In the March and June 1997 Forms 10-QSB, HCCA reported $3 million of this asset as "goodwill." 72. There was no basis in GAAP to assign any value to these assets because the transactions to acquire the assets were never consummated. 73. On June 28, 1994, HCCA entered into an agreement with Robert Krilich, to acquire several commercial, residential, and industrial real estate properties (the "Krilich real estate"), in exchange for HCCA stock. 74. However, none of the properties were ever delivered into the possession or control of HCCA, nor did HCCA ever receive income from these properties. 75. Further, in September 1995, Krilich was enjoined by a federal court from transferring, disposing of, or otherwise dealing with any property owned or controlled by him, thereby preventing the transfer of these assets to HCCA. 76. Krilich has testified in another federal court proceeding that he did not transfer any properties to HCCA and that no sales were pending. 77. Furlong attended a special board meeting on September 15, 1996, where the board discussed the fact that this transaction was not consummated and that HCCA lacked title to the majority of the Krilich real estate. 78. As a result, the board decided to direct HCCA's stock transfer agent to place stop orders on all stock previously issued in contemplation of the acquisitions. 79. Pietrzak was aware of this action by December 31, 1996. 80. In April 1997, HCCA filed a legal action against Krilich seeking the properties. 81. Subsequently on October 7, 2001, HCCA and Krilich settled their dispute regarding these assets by executing an agreement whereby Krilich retained the properties. 82. On or about May 1, 1997, Furlong, Pietrzak and another officer and director of HCCA attended a special board meeting where the only matter discussed concerned the "unconsummated acquisitions by the company," including those related to the Krilich real estate. 83. The board again resolved to authorize a stop transfer order for all shares previously issued in contemplation of acquiring the real estate properties. 84. On May 5, 1997, HCCA issued a press release announcing that it purchased real estate (which was part of the Krilich real estate) in June 1994 and that it expected to receive $100,000 of monthly income from the properties. 85. However, HCCA failed to disclose that it did not have title or control of the properties known as the Krilich real estate, that the transaction was being disputed, and that HCCA had placed a stop on the transfer of its stock. 86. On May 9, 1997, Krilich sent a letter to HCCA stating that the May 5, 1997 press release made false statements concerning the purchase and use of income from the properties, and that Krilich considered the exchange agreements to be null and void. 87. In response to a request by Furlong, on July 22, 1997 Pietrzak sent a legal opinion to Furlong and HCCA's auditor in which he stated that the acquisition of the Krilich real estate properties was probable and expected to be consummated. 88. Pietrzak and Furlong, along with another officer and director of HCCA, discussed and jointly decided how to record this asset on HCCA's books even though they knew that HCCA never controlled the Krilich real estate properties, never received any economic benefit from the properties, never obtained title to the properties, never obtained appraisals for the properties, and that the properties were the subject of at least two lawsuits. 89. HCCA lacked any system to evaluate whether it had met legal standards or economically controlled these properties in order to record these assets in conformity with GAAP. 90. As a result, the financial statements that appeared in HCCA's December 1997 Form 10-KSB, December 1998 Form 10-KSB and the December 1999 amendment thereto, March 1997, June 1997 and September 1997 reports on Form 10-QSB, the amendments to the June 1997 and September 1997 Forms 10-QSB, and in the August 1997 and December 1999 amendments to the Form 10-SB, were materially misstated. 91. Although HCCA disclosed in various filings that it was unable to determine who held title to the real estate and that it was litigating with Krilich over the properties, it had no basis to report these assets in its financial statements. C. HCCA Improperly Recognized and Valued Advertising Credits 92. On or about June 26, 1996, HCCA purportedly acquired $100 million of television advertising credits in exchange for 40 million shares of HCCA stock. 93. HCCA was required to pay the issuer of the credits (the television network) a cash fee of 4% of the value of airtime to be used. The certificates stated that the advertising time could be used only when the network had unreserved airtime. 94. In the 1996 Form 10-SB and 1996 Form 10-KSB, HCCA valued these credits at $50 million, or 50% of their face value. 95. However, the credits were of no economic use to HCCA and had no apparent market for resale or trade purposes. 96. Recording these credits in excess of the seller's historical cost basis (zero) was a departure from GAAP. 97. To acquire the credits, HCCA issued 40 million shares of restricted stock for all of the outstanding stock of an entity whose only assets were the credits. 98. HCCA claimed that the credits, which were dated May 27, 1994, were to be used to promote various chiropractic practices that HCCA hoped to acquire during 1993 and 1994. 99. However, because of various state and federal laws, none of these acquisitions could be legally consummated. 100. HCCA never used any of the credits. 101. Further, despite its attempts, HCCA was unable to locate any existing markets for the credits and was unable to locate any buyers for the credits. 102. On or about September 26, 1996, HCCA's auditor concluded that recording the credits was "a huge gray area", and another HCCA director communicated this belief to Furlong in a letter. The letter also disclosed that two Nevada CPAs lost their licenses because they improperly accounted for the exchange of stock for nonmonetary assets by failing to record nonmonetary assets at the promoter/transferor's historical cost basis. 103. By October 1, 1996, HCCA's auditor felt that it would be to HCCA's advantage to obtain the SEC's approval in recording the credits, which he claimed had a zero tax basis, further evidencing the lack of any GAAP value, prior to the issuance of HCCA's financial statements. 104. On or about November 14, 1996, prior to the December 1996 filing of the Form 10-SB, Furlong, Pietrzak and the HCCA auditor, among others, knew they needed to obtain support for HCCA's valuation of the credits from a broker or other qualified individual. 105. However, neither Pietrzak nor Furlong ever obtained such support from a broker or other qualified individual. 106. Pietrzak and Furlong and other HCCA directors discussed and approved the recording of the advertising credits on HCCA's books. 107. Pietrzak and Furlong failed to ensure that HCCA's internal accounting controls prevented this asset from being recorded in a manner that did not conform with GAAP. 108. Further, Pietrzak and Furlong failed to evaluate the carrying value of the credits in subsequent periods. 109. These credits materially misstated the financial statements that appeared in HCCA's Form 10-SB and December 1996 Form 10-KSB. 110. Later, in the August 1997 amendment to its Form 10-SB, HCCA disclosed that it was revising the value of the credits down to zero, the seller's basis, because it had obtained the credits from a shareholder. D. HCCA Improperly Recognized and Valued Notes Receivable 111. From 1996 through 1999, HCCA reported that it held two notes receivable totaling $260,000. 112. The first note obligated a Mexican corporation to pay HCCA $215,000 plus interest, and the second note obligated two individuals to pay HCCA $45,000 plus interest. 113. HCCA failed to record these notes in conformity with GAAP as HCCA lacked a basis for believing the notes were collectible and, in fact, never collected a single payment on the notes. 114. Lacking a reasonable basis for believing the notes were collectible, HCCA should have written the notes down to zero, in order to conform with GAAP. 115. Although both notes were in default at the time HCCA filed its Form 10-SB in December 1996, HCCA continued to report these notes at their full value in subsequent reports rather than assigning a value of zero. 116. HCCA lacked any system to evaluate the collectibility of the notes. For example, HCCA never obtained the debtors' personal or corporate financial statements and even failed to perform credit checks. 117. Pietrzak and Furlong, with another HCCA director, participated in recording and maintaining these assets on HCCA's books, notwithstanding their default status. 118. Neither of these defendants had any basis to believe the notes were collectible. 119. Pietrzak represented to another HCCA director that the notes were collectible and concurred in carrying the notes at their full value and that director relied upon that statement. 120. Pietrzak and Furlong sent a letter dated December 19, 1995, to the individual debtors notifying them that they were in default. 121. The notes continued to be improperly reported at their full values in HCCA's 1996 Form 10-SB, December 1996 through December 1998 Forms 10-KSB and March 1997, June 1997, September 1997 reports on Form 10-QSB and amendments to each of these reports. EFFECT OF MISSTATEMENTS ON HCCA'S FINANCIAL STATEMENTS AND PERIODIC REPORTS 121. The misstatements contained in HCCA's financial statements were material and caused its registration statement on Form 10-SB and numerous reports on Forms 10-QSB and 10-KSB to be false and misleading. 122. HCCA's failure to properly record assets misled investors as to its true financial condition. 123. From 1996 through 1999, HCCA reported to the public that it was an entity with substantial valuable assets when there was no credible basis for doing so. 124. During this time, HCCA overstated its assets by amounts ranging from $219,881 to $318,648,821, or 27% to 95,920%. In some cases, the same fiscal periods are misstated by different amounts in different reports. FALSE AND MISLEADING PRESS RELEASES AND LETTER TO SHAREHOLDERS 125. From November 26, 1996 (three weeks prior to the initial filing of HCCA's Form 10-SB) through March 26, 2001, HCCA issued fifteen press releases and one letter to its shareholders that were false and/or misleading. 126. Virtually all of these releases dealt with HCCA's purported mining operations, while one of the releases dealt with future income to be received from real estate HCCA had not actually acquired. 127. The letter to shareholders related to HCCA's purported Arizona mining assets. 128. Furlong and Pietrzak were responsible for preparing each of these press releases and the letter to shareholders. JORDAN'S REPORTS AND CONSENTS 129. Jordan issued four reports and two consents that purported to value HCCA's mining assets, for which he was paid by HCCA. 130. Jordan knew, should have known, or was reckless in not knowing that these reports and consents were false and misleading. 131. On February 9, 1996, Jordan issued a report that was filed with the 1996 Form 10-KSB in May 1997 and November 1997, the December 1996 Form 10-SB and both amendments to the Form 10-SB, which estimated the value of certain Nevada mining assets to be $2,355,150,000. 132. The report falsely stated that these values were a "pretty good estimate." 133. In a letter dated April 25, 1997, Jordan consented to HCCA including this report with its 1996 Form 10-KSB. 134. The consent stated that Jordan had tested three samples that indicated the existence of "commercial quantities of precious metals." This statement was misleading because Jordan was not qualified to opine on the economic value of mineral properties. 135. On June 13, 1997, Jordan sent a report to HCCA's auditor that included assays from samples purportedly taken at HCCA's Arizona property. 136. This report falsely stated that Jordan observed the taking of the samples from which the valuation of the property was calculated. 137. As a result, the integrity of the assay process was violated. 138. This report was filed with the December 1999 amendment to the Form 10-SB. 139. Less than two weeks later, Jordan sent a report to HCCA's auditor dated June 25, 1997, which stated that the value of the ore located in Arizona was approximately $4 billion. 140. Jordan's opinion was based on undocumented and unsubstantiated assumptions. 141. Jordan should not have sent this report because it contained information which he was not qualified to provide, because he failed to list numerous assumptions of how he arrived at the ore's value and because there was no known economical way to extract the minerals. 142. Jordan never told HCCA's auditor that the report was based on mere possibilities for a best case, unproven scenario. 143. Jordan himself did not believe HCCA could sell the assets for $4 billion. 144. This report was filed with the December 1999 amendment to the Form 10-SB. 145. Jordan issued another report on June 28, 1997, which he provided to HCCA and its auditor. 146. In the report, Jordan purported to calculate the value of the ore located in Arizona after processing costs. 147. Jordan's assays falsely showed, without a reasonable basis therefore, values before extraction to be $13,619.86 per ton, and falsely claimed, without a reasonable basis therefore, that plasma furnaces would collect approximately 80% of the precious metals found in the ore. 148. Jordan, without a reasonable basis therefor, falsely estimated that processing costs should not exceed $3,000 per ton. 149. Jordan, without a reasonable basis therefore, falsely calculated that a pre-tax profit of more than $7,900 per ton would be obtained by HCCA. Jordan then multiplied this by 500,000 tons to arrive at a total estimated pre-tax profit of $3.95 billion. 150. Jordan simply took the amount of 500,000 tons from another assayer's report; however that assayer denies authoring that report. 151. Jordan falsely, and without a reasonable basis therefore, stated that in his "professional opinion," the ore is "worth well in excess of" $3 billion dollars. 152. Although this report purported to account for processing costs, it was misleading because Jordan lacked a reasonable basis to support the assumptions underlying his calculations. 153. Jordan failed to disclose his disbelief that the use of plasma furnaces to recover minerals was possible, at the rate stated in his report. 154. Moreover, Jordan knew that the use of plasma furnaces to recover precious metals from the type of ore held by HCCA was not a proven process. 155. In fact, Jordan did not believe HCCA could achieve the values stated in his report, but nevertheless issued his professional opinion to the contrary. 156. On August 26, 1997, Jordan signed a consent allowing HCCA to file his February 9, 1996 and June 28, 1997 reports with its Form 10-SB and any future reports. 157. In the consent, Jordan repeated his opinion that the Arizona site contained commercial quantities of precious metals worth more than $3 billion and that the ore belonged to HCCA. 158. HCCA filed these reports and consent with the August 1997 and December 1999 amendments to the Form 10-SB. 159. Providing such values in an assay report and consent was a departure from Jordan's normal practice. 160. As an assayer, Jordan's expertise was limited to determining the composition of minerals. Geologists or engineers have the expertise to determine the economic viability of such minerals. 161. Jordan's reports and opinions were misleading because they falsely implied concluded that there were valuable reserves in the ground. 162. Jordan had no basis to conclude that HCCA could economically recover any of the minerals located at its Arizona or California locations, and knew HCCA was a public company. He knew, should have known, and/or was reckless in not knowing that HCCA would use and rely upon his reports. FRAUDULENT SELLING OF HCCA STOCK BY FURLONG, PIETRZAK AND JORDAN 163. From January 1997 through June 2000, Furlong sold at least 60,133,312 shares of HCCA stock in more than 1,180 transactions, and Pietrzak sold at least 19,637,130 shares in more than 454 transactions. 164. During this time period, HCCA's stock traded in a range of approximately $.001 to $1.875 per share. 165. At the time of their sales, Pietrzak and Furlong knew, or were reckless in not knowing, that HCCA's registration statements, reports, press releases and letters to shareholders were being disseminated with inflated values of HCCA's assets. 166. As a result, Pietrzak and Furlong fraudulently received more than $1,204,405 and $3,007,901, respectively. 167. From January 2000 through May 2000, Jordan received approximately $191,400 in proceeds from the sale of 2,640,000 shares of HCCA stock in 49 transactions. 168. Jordan obtained the stock he sold from Furlong. 169. At the time of these sales, Jordan knew, should have known or was reckless in not knowing that his valuations of HCCA's mining assets were inflated, misleading to HCCA's investors, and included in HCCA's public filings. FAILURE TO PROPERLY FILE CERTAIN REPORTS WITH THE SEC A. Annual and Quarterly Reports 170. HCCA has failed to file any quarterly or annual reports since December 14, 1999 when it filed its September 30, 1999 Form 10-QSB. 171. Pietrzak and Furlong are aware that HCCA is delinquent in its filings and are responsible for the delinquency since they are the officers of and control HCCA. B. November 1, 2001 Form 8-K Current Report 172. After HCCA dismissed its outside auditor on September 1, 2001, it was required to file Form 8-K by September 7, 2001 reporting the termination. HCCA did not file its Form 8-K until November 1, 2001. 173. This Form 8-K failed to disclose whether there were disagreements between HCCA and the outside auditor and failed to disclose the auditor's response letter to the filing of the Form 8-K. Pietrzak and Furlong were responsible for the Form 8-K. 174. It also falsely stated that the auditor was still willing to be associated with previous HCCA financial statements and that nothing had come to his attention that would materially affect his prior audit reports or HCCA's financial statements. 175. In fact, on May 19, 2000, the outside auditor told Furlong and Pietrzak that he would be withdrawing his audit report and HCCA's financial statements needed to be restated. 176. Further, the Form 8-K also contained statements relating to HCCA's ability to sell the ore reserves in Arizona and the advertising credits. 177. These statements were misleading because the ore reserves have little or no value, HCCA does not own the ore reserves, and HCCA has a history of failure when trying to sell the credits. C. Section 16 Stock Ownership Reports 178. Furlong has never filed any Forms 3, 4 or 5 with the Commission, but has sold more than 60 million shares of HCCA stock from 1997 through 2000. 179. Furlong knowingly, intentionally and/or recklessly failed to report the preceding stock ownership transactions to the Commission. CLAIMS FOR RELIEF COUNT I-FRAUD Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] 180. Paragraphs 1-179 are hereby realleged and are incorporated herein by reference. 181. Defendant Furlong, from 1996 through 2001, defendant Pietrzak, from 1996 through 2001, and defendant Jordan, during 2000, singly or in concert, in connection with the offer or sale of securities, specifically the above-described securities, by use of the means and instruments of transportation and communication in interstate commerce or by use of the mails, (a) directly and indirectly employed devices, schemes and artifices to defraud purchasers of such securities; (b) directly and indirectly obtained money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, not misleading; and (c) engaged in transactions, practices and a course of business which would have operated as a fraud or deceit upon the purchasers of such securities, all as more particularly described in paragraphs 1-179 above. 182. Defendants Furlong, Pietrzak and Jordan intentionally, and/or recklessly engaged in the aforementioned devices, schemes and artifices to defraud. 183. By reason of the foregoing, Defendants Furlong, Pietrzak and Jordan have violated and, unless restrained and enjoined, will continue to violate §17(a) of the Securities Act [15 U.S.C. § 77q(a)]. COUNT II--FRAUD Violations of Section 10(b) of the Exchange Act [15. U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] 184. Paragraphs 1 through 179 are hereby realleged and are incorporated herein by reference. 185. Defendant Furlong, from 1996 through 2001, defendant Pietrzak, from 1996 through 2001, and defendant Jordan, from 1996 through 2000, singly or in concert, in connection with the purchase and sale of securities described herein, by the use of the means and instrumentalities of interstate commerce and by use of the mails, directly and indirectly: a) employed devices, schemes, and artifices to defraud; b) made untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and c) engaged in acts, practices, and courses of business which would and did operate as a fraud and deceit upon the purchasers of such securities, all as more particularly described above. 186. The Defendants knowingly, intentionally, and/or recklessly engaged in the aforementioned devices, schemes and artifices to defraud, made untrue statements of material facts and omitted to state material facts, and engaged in fraudulent acts, practices and courses of business. In engaging in such conduct, the Defendants acted with scienter, that is, with an intent to deceive, manipulate or defraud or with a severe reckless disregard for the truth. 187. By reason of the foregoing, the Defendants, directly and indirectly, have violated and, unless enjoined, will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. COUNT III-REPORTING PROVISIONS VIOLATIONS Liability of Jordan for aiding and abetting HCCA's Violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rule 13a-1 thereunder [17 C.F.R. 240.13a-1] 188. Paragraphs 1 through 179 are hereby realleged and are incorporated herein by reference. 189. Defendant Jordan, during 1997, aided and abetted HCCA's violations of Section 13(a) of the Exchange Act, which occurred when it filed annual reports that contained financial statements that were not prepared in conformity with GAAP and contained material misstatements, as described above. HCCA included Jordan's false and misleading reports and consents as exhibits to its 1996 Form 10K-SB filed in May 1997 and November 1997 and Jordan's reports and consents made these filings false and misleading. Jordan knowingly provided substantial assistance to HCCA when it violated the reporting provisions. Jordan issued the false and misleading reports and knew, or was reckless in not knowing, that the reports were false and misleading. Moreover, Jordan consented to their inclusion in HCCA's reports. 190. By reason of the foregoing, HCCA violated Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rule 13a-1 thereunder [17 C.F.R. 240.13a-1]. 191. Defendant Jordan served as HCCA's assayer and issued reports and consents during 1997 as set forth above. Jordan, while associated with HCCA, aided and abetted the conduct of HCCA with respect to the activities constituting the violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rule 13a-1 thereunder [17 C.F.R. 240.13a-1]. In addition, Jordan was a culpable participant in the conduct. 192. By reason of the foregoing, Jordan is liable for aiding and abetting violations of, and unless enjoined will continue to violate and cause violations of, Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rule 13a-1 thereunder [17 C.F.R. 240.13a-1]. COUNT IV-REPORTING PROVISIONS VIOLATIONS Violations By Furlong and Pietrzak of Section 13(b)(5) of the Exchange Act [15 U.S.C. 78m(b)(5)] and Rules 13b2-1 thereunder [17 C.F.R. 240.13b2-1] 193. Paragraphs 1 through 179 are hereby realleged and are incorporated herein by reference. 194. Defendant Furlong, from 1996 through 2001, and defendant Pietrzak, from 1996 through 2001, singly or in concert, knowingly circumvented HCCA's internal accounting controls, knowingly failed to implement certain systems of internal accounting controls, knowingly falsified and caused to be falsified HCCA's books, records and accounts described in Section 13(b)(2) of the Exchange Act [15 U.S.C. 78m(b)(2)], as described in paragraphs 1 through 179. 195. Furlong and Pietrzak knowingly failed to implement a system of internal accounting controls, which resulted in the improper recording of assets on HCCA's books, records and accounts, as described in paragraphs 1 through 179. 196. Defendant Furlong, from 1996 through 2001, and defendant Pietrzak, from 1996 through 2001, singly or in concert: a. made or caused to be made materially false or misleading statements; and b. omitted to state, or caused another person to omit to state, material facts necessary in order to make statements made, in light of the circumstances under which such statements were made, not misleading, to an accountant in connection with (1) an audit or examination of the financial statements of the issuer required to be made pursuant to Section 13 of the Exchange Act; and (2) the preparation or filing of a document or report required to be filed with the Commission pursuant to this subpart or otherwise, as described in paragraphs 1 through 179 above. 197. By reason of the foregoing, defendants Furlong and Pietrzak have violated, and unless restrained and enjoined, will continue to violate Section 13(b)(5) of the Exchange Act [15 U.S.C. 78m(b)(5)] and Rule 13b2-1 thereunder [17 C.F.R. 240.13b2-1]. COUNT V Violations by Furlong of Section 16(a) of the Exchange Act [15 U.S.C. 78p(a)] and Rules 16a-2 and 16a-3 thereunder [17 C.F.R. 240.16a-2 and 240.16a-3] 198. Paragraphs 1 through 179 are hereby realleged and are incorporated herein by reference. 199. Defendant Furlong, from 1996 through 2001, singly or in concert, failed to file or filed false and misleading statements of the amount of all equity securities owned of an issuer and any changes in such ownership when he directly or indirectly beneficially owned more than 10 per centum of any class of any equity security which was registered pursuant to Section 12 of the Exchange Act [15 U.S.C. 78l], or was a director or an officer of the issuer of such security, as described in paragraphs 1 through 179 above. 200. Defendant Furlong, singly or in concert, violated Section 16 of the Exchange Act and Rules 16a-2 and 16a-3 because he owned and traded HCCA stock and failed to file any Forms 3, 4 or 5 with the Commission, as described in paragraphs 1 through 179 above. 201. By reason of the foregoing, defendant Furlong has violated, and unless restrained and enjoined, will continue to violate Section 16(a) of the Exchange Act [15 U.S.C. 78p(a) and 78p(c)] and Rules 16a-2 and 16a-3 thereunder [17 C.F.R. 240.16a2-1 and 240.16a-3]. COUNT VI-REPORTING PROVISIONS VIOLATIONS Liability of Furlong and Pietrzak for aiding and abetting HCCA's Violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1, 240.13a-11 and 13a-13] 202. Paragraphs 1 through 179 are hereby realleged and are incorporated herein by reference. 203. Defendant Furlong between 1996 and 2001, and Pietrzak between 1996 and 2001 aided and abetted HCCA's violations of Section 13(a) which occurred when it filed annual reports and quarterly reports that contained financial statements that were not prepared in conformity with GAAP and contained material misstatements, as described above. HCCA violated Section 13(a) and Rule 13a-11 when it filed a current report on Form 8-K which failed to disclose timely a change in auditor, failed to disclose whether there were disagreements between HCCA and its auditor, failed to disclose the auditor's response letter to the filing of the Form 8-K, and misrepresented the auditor's willingness to be associated with the previous HCCA financial statements. The Form 8-K also contained statements to HCCA's ability to sell the ore reserves in Arizona and the advertising credits, which were misleading because the ore reserves have little or no value, HCCA does not own the ore reserves, and HCCA has a history of failure when trying to sell the credits. 204. HCCA also violated Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 by failing to file annual and quarterly reports after the September 1999 Form 10-QSB, which was filed in September 1999. 205. Furlong and Pietrzak aided and abetted HCCA's violations by knowingly providing substantial assistance to another person in violation of a provision of the Exchange Act or any rule or regulation thereunder. 206. Furlong and Pietrzak provided substantial assistance to HCCA's violations when they prepared and/or signed HCCA's filings on Forms 8-K, 10-KSB and 10-QSB, and while knowing that the mining assets had little or no value, that the real estate transactions had not been consummated, the advertising credits were worthless, and the notes receivable were not collectible; provided substantial assistance when the ignored documentation that indicated that the recording of the transactions were not in accordance with GAAP; and provided substantial assistance by having failed to file HCCA's periodic reports since the September 1999 Form 10-QSB. 207. By reason of the foregoing, HCCA violated Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1, 240.13a-11 and 240.13a-13]. 208. Defendants Furlong and Pietrzak served as officers and directors of HCCA and provided substantial assistance to it in the contents of and filings of its periodic and current reports with the Commission. They, while associated with HCCA, aided and abetted the conduct of HCCA with respect to the activities constituting the violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.13a-1, 240.13a-11 and 240.13a-13]. Furlong and Pietrzak were culpable participants in the conduct. 209. By reason of the foregoing, Furlong and Pietrzak aided and abetted HCCA's violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.13a-1, 240.13a-11 and 240.13a-13] and unless enjoined will continue to aid and abet violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1, 240.13a-11 and 240.13a-13]. COUNT VII Liability of Furlong and Pietrzak, for aiding and abetting HCCA's Violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. 78m(b)(2)(A) and 78m(b)(2)(B)] and Rule 13b2-1 thereunder [17 C.F.R. § 240.13b2-1] 210. Paragraphs 1 through 179 are hereby realleged and are incorporated herein by reference. 211. From 1996 through 2001, HCCA failed, as described above, to make and keep books, records, and accounts, which in reasonable detail, accurately and fairly reflected transactions and disposition of its assets. 212. From 1996 through 2001, HCCA failed, as described above, to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (a) transactions were executed in accordance with management's general or specific authorization, (b) transactions were recorded as necessary (i) to permit preparation of financial statements in conformity with GAAP or any other criteria applicable to such statements, and (ii) to maintain accountability for assets, (c) access to its assets was permitted only in accordance with management's general or specific authorization, and (d) the recorded accountability for its assets was compared with its existing assets at reasonable intervals and appropriate action was taken with respect to any differences. 213. By reason of the foregoing, HCCA violated Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. 78m(b)(2)(A) and 78m(b)(2)(B)]. 214. HCCA violated Section 13(b)(2)(A) of the Exchange Act by not accurately recording the mining, real estate, advertising credits, and notes receivable assets on its books and records. 215. From 1996 through 1999, Furlong and Pietrzak, provided knowing and substantial assistance to this violation of HCCA by participating in recording those assets, when they knew, or were reckless in not knowing, that the values ascribed those assets were substantially overstated. 216. HCCA violated Section 13(b)(2)(B) of the Exchange Act by failing to devise internal accounting controls that were sufficient to allow the preparation of its financial statements in conformity with GAAP. 217. From 1996 through 1999, Furlong and Pietrzak, who shared responsibility for establishing and maintaining HCCA's internal accounting controls, provided knowing and substantial assistance to HCCA's violations of Section 13(b)(2)(B) by not establishing adequate controls when they were aware that HCCA was recording transactions without all pertinent information and documents concerning those transactions. 218. Rule 13b2-1 prohibits any person from directly or indirectly falsifying or causing the falsification of any books, records or accounts required by Section 13(b)(2)(A), and HCCA violated that rule when it falsified its books, records and accounts by improperly recording the values of its mining, real estate, advertising credit and notes receivable assets. 219. Furlong and Pietrzak directly or indirectly falsified or caused the falsification of HCCA's books, records, and accounts by participating in these improper entries on HCCA's books and records. 220. By reason of the foregoing, Furlong and Pietrzak aided and abetted HCCA in its violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. 78m(b)(2)(A) and 78m(b)(2)(B)] and Rule 13b2-1 thereunder [17 C.F.R.§ 240.13b2-1] and unless restrained and enjoined, will continue to violate and cause violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. 78m(b)(2)(A) and 78m(b)(2)(B)] and Rule 13b2-1 thereunder [17 C.F.R.§ 240.13b2-1]. PRAYER FOR RELIEF WHEREFORE, Plaintiff Commission, respectfully prays that the Court: I. Make findings of fact and conclusions of law in accordance with Rule 52 of the Federal Rules of Civil Procedure. II. Issue a permanent injunction enjoining defendant Furlong, and his agents, servants, employees, attorneys, and all persons in active concert or participation with him who receive actual notice of the order by personal service or otherwise, and each of them: a. from violating Section 17(a) of the Securities Act [15 U.S.C. 77q(a)]; b. from violating Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]; c. from violating Section 13(b)(5) of the Exchange Act [15 U.S.C. 78m(b)(5)] and Rule 13b2-1 thereunder [17 C.F.R. 240.13b2-1]; d. from violating Section 16(a) of the Exchange Act [15 U.S.C. 78p(a)] and Rules 16a-2 and 16a-3 thereunder [17 C.F.R. 240.16a-2 and 240.16a-3]; e. from aiding and abetting violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1, 240.13a-11 and 240.13a-13]; and f. from aiding and abetting violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. 78m(b)(2)(A) and 78m(b)(2)(B)] and Rule 13b2-1 thereunder [17 C.F.R. 240.13b2-1]. III. Issue a permanent injunction enjoining defendant Pietrzak, and his agents, servants, employees, attorneys, and all persons in active concert or participation with him who receive actual notice of the order by personal service or otherwise, and each of them: a. from violating Section 17(a) of the Securities Act [15 U.S.C. 77q(a)]; b. from violating Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]; c. from violating Section 13(b)(5) of the Exchange Act [15 U.S.C. 78m(b)(5)] and Rule 13b2-1 thereunder [17 C.F.R. 240.13b2-1]; d. from aiding and abetting violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1, 240.13a-11 and 240.13a-13]; and e. from aiding and abetting violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. 78m(b)(2)(A) and 78m(b)(2)(B)] and Rule 13b2-1 thereunder [17 C.F.R. 240.13b2-1]. IV. Issue a permanent injunction enjoining defendant Jordan, and his agents, servants, employees, attorneys, and all persons in active concert or participation with him who receive actual notice of the order by personal service or otherwise, and each of them: a. from violating Section 17(a) of the Securities Act [15 U.S.C. 77q(a)]; b. from violating Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]; and c. from aiding and abetting violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rule 13a-1, thereunder [17 C.F.R. 240.13a-1]. V. Issue an Order requiring defendants Furlong, Pietrzak and Jordan to disgorge all ill-gotten gains and losses avoided as alleged in the Commission's Complaint, plus pay prejudgment interest thereon. VI. Issue an Order requiring defendants Furlong, Pietrzak and Jordan, pursuant to Section 20(d) of the Securities Act [15 U.S.C. 77t(d)] and Sections 21(d)(3) and 21A of the Exchange Act [15 U.S.C. 78u(d)(3) and 78u-1], to pay civil monetary penalties. VII. Issue an Order pursuant to Section 20(e) of the Securities Act [15 U.S.C. 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. 78u(d)(2)] permanently prohibiting defendants Furlong and Pietrzak from acting as officers or directors of any company that has a class of securities registered with the Commission pursuant to Section 12 of the Exchange Act [15 U.S.C. 78l] or that is required to file reports with the Commission pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)]. VIII. Issue an Order pursuant to both Section 603 of the Sarbanes-Oxley Act of 2002 (which amended Section 20 of the Securities Act and Section 21(d) of the Exchange Act) and the inherent equitable powers of this Court, which bars defendants Furlong and Pietrzak from participating in any offering of a penny stock, including acting as a promoter, finder, consultant, agent, or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock; or inducing or attempting to induce the purchase or sale of any penny stock. IX. Issue an Order that retains jurisdiction over this action in order to implement and carry out the terms of all orders and decrees that may have been entered or to entertain any suitable application or motion by the Commission for additional relief within the jurisdiction of this Court. X. Grant such other and further relief as may be necessary and appropriate. RESPECTFULLY SUBMITTED,
___________________________
COUNSEL FOR PLAINTIFF
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