The Commission's Complaint Alleged That Todt Has Orchestrated Two Fraudulent Schemes
The Commission's Complaint alleged that Todt has orchestrated two fraudulent schemes, one of which was ongoing at the time the Complaint was filed. In the first scheme, as alleged in the Complaint, Todt and others inflated the price for the stock of Quality of Life Health Corporation (QLHC) from March 2003 until at least October 2004 by issuing press releases falsely claiming that QLHC owned approximately $60 million worth of assisted living facilities and repeating those claims on its website. Todt and others profited from the inflated price for QLHC stock, with Todt making at least $800,000 in ill-gotten gains by trading through a nominee account and by splitting profits with traders that received their QLHC stock through Todt. Todt's latest scheme, which lasted from at least November 2004 until the filing of the emergency action, involved a scheme to evade the registration requirements and issue unregistered securities of four penny stock companies quoted on the Pink Sheets website. These companies are: Tempo Financial, Inc., STB Chip Co., SutraTel Kiosk Corp. (f/k/a Urban Transfer Systems, Inc.) and Lonisson Communications Corp. (collectively, the penny stock companies). Todt's latest scheme also involved the dissemination of false and misleading information about the penny stock companies and the manipulation of the market in the stock of three of those companies. On March 28, 2005, the Commission entered orders suspending trading in the four penny stock companies' securities for a ten-day period.
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