Securities and Exchange Commission
Litigation Release No. 18027 / March 11, 2003
SEC Charges Medical Disposal and Others With Defrauding Investors of $742,000
Securities and Exchange Commission v. Global Telecom Services L.L.C. d/b/a Medical Disposal Devices, Albert D. Latouche and Salvatore J. Cartelli, Jr., 3:03-CV-418 (PCD ) (D. Conn.) (March 11, 2003)
The Securities and Exchange Commission announced that it filed a civil injunctive action today in the United States District Court for the District of Connecticut against Global Telecom Services, L.L.C. d/b/a Medical Disposal Devices ("Medical Disposal"), Albert D. LaTouche ("LaTouche") and Salvatore J. Cartelli, Jr. ("Cartelli").
In its complaint, the Commission charged the following Defendants:
The Commission's complaint alleges the following:
Between January 1997 and July 2000, Medical Disposal, LaTouche and Cartelli conducted a fraudulent offering of securities, selling investment contracts and notes to at least 47 investors, and defrauding them of at least $742,000. Medical Disposal claimed to manufacture and sell the "Needlyzer," a device which purportedly destroyed hypodermic needles safely. (The Needlyzer's slogan was "Don't get stuck with someone else's problem.") Medical Disposal, however, never successfully commercially manufactured or sold the Needlyzer. Additionally, Medical Disposal, LaTouche and Cartelli made numerous false and misleading statements to induce investors to purchase investment contracts and notes. For example, the Defendants told investors that the United States Food and Drug Administration ("FDA") approved the Needlyzer, when, in fact, the FDA had not. The Defendants told investors that a company in New York manufactured the Needlyzer for Medical Disposal, when, in fact, no company was manufacturing the Needlyzer for Medical Disposal. The Defendants told investors that Medical Disposal had negotiated contracts with foreign companies to purchase the Needlyzer, when, in fact, no such contracts existed. The Defendants also told investors they would use their funds to manufacture Needlyzers, when, in fact, LaTouche and Cartelli used investors' funds for personal purposes and to operate Medical Disposal's other purported business, selling "900" telephone numbers.
The Commission charged Medical Disposal, LaTouche and Cartelli with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The Commission is seeking permanent injunctions, disgorgement plus prejudgment interest, and civil penalties from all the Defendants. The Commission is also seeking officer and director bars against LaTouche and Cartelli.