UNITED STATES SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15594 / December 17, 1997 SECURITIES AND EXCHANGE COMMISSION v. CALMAN H. RIFKIN and EVA-HEALTH, USA, INC., 97 Civ. 9288 (LBS) (S.D.N.Y.) The Securities and Exchange Commission ( Commission ) today filed a civil injunctive action in federal court in Manhattan charging a corporation and its former chief executive officer ( CEO ) with fraudulently obtaining $5.5 million from sales of the company s unregistered securities between early 1992 and 1994. According to the Complaint, in offering and selling those securities, the defendants misrepresented the CEO s educational background and training and made false statements regarding the company s products. Named in the Complaint are: Calman H. Rifkin ("Rifkin"), a 47 year old resident of Staten Island, New York; and Eva-Health, USA, Inc. ("Eva-Health"), a Delaware company, that purported to research, develop and manufacture biomedical devices. The Complaint alleges that, in offering and selling warrants to purchase Eva-Health common stock, Rifkin and Eva-Health represented that: (1) Rifkin held MD and Ph.D. degrees from State University of New York at Stony Brook and that Rifkin had completed a medical residency in the field of obstetrics and gynecology; (2) Rifkin had received a research grant from the National Institute of Health ( NIH ) to fund clinical trials of an Eva- Health product called acu-Baby; (3) Eva-Health held patents for its entire product line, including the technology employed in the acu-Med, acu- Monitoring, acu-Baby and medi-Pro products; (4) Eva-Health was negotiating, and would soon be entering into, licensing and distribution agreements with numerous well-known pharmaceutical companies, including Abbott Laboratories, Baxter International , Ciba-Geigy, Conair Corp., Healthdyne and Johnson & Johnson, and that these licensing agreements would generate hundreds of millions of dollars in revenue for Eva-Health; (5) Eva- Health s medi-Pro device --which was designed to be used in the treatment of drug addiction -- was undergoing clinical evaluations conducted by a physician at the Albert Einstein Medical Center in New York City; (6) medi- Pro was used by a doctor from Lincoln Hospital, Bronx, New York as a replacement for acupuncture therapy to treat drug addicts; and (7) Dominick & Dominick, Inc. ( D&D ), an investment banking firm, had invested $1 million in Eva-Health. According to the Complaint, each of the foregoing representations was false in that: (1) Rifkin was neither an MD nor a Ph.D., nor had he ever completed any medical residency program; (2) Rifkin never received an NIH research grant to fund clinical trials of acu-Baby or any other Eva-Health product; (3) during the Relevant Period, neither Eva-Health nor Rifkin held patents for any of the products listed above, or for any other Eva-Health ======END OF PAGE 1====== product; (4) although Rifkin did have preliminary discussions with some of the pharmaceutical companies listed above, no further discussions were held because Rifkin did not have the patented technology necessary to license the products; (5) no physician from the Albert Einstein Medical Center ever conducted clinical trials or evaluations of medi-Pro; (6) no doctor from Lincoln Hospital had used medi-Pro to treat drug addicts; and (7) D&D never invested money in Eva-Health. In its Complaint, the Commission seeks: (1) permanent injunctions prohibiting Rifkin and Eva-Health from violating the antifraud and registration provisions of the federal securities laws [Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder]; (2) disgorgement from Rifkin and Eva-Health of their ill-gotten gains plus prejudgment interest; and (3) civil penalties against Rifkin. Filed with the complaint is a consent executed by Rifkin in which he consents to being permanently enjoined from violating the above referenced registration and antifraud provisions of the federal securities laws, and ordered to pay disgorgement and prejudgment interest. Under the terms of Rifkin s consent, payment of disgorgement would be waived and no civil penalties would be imposed based on Rifkin's demonstrated inability to pay. The litigation is pending against Eva-Health. ======END OF PAGE 2======