Yesterday, the SEC charged a former microcap company CEO and a boiler room operator with defrauding seniors and others who were pressured to invest in a pair of penny stock companies and promised lucrative profits.

Craig V. Sizer founded Sanomedics Inc. (OTC: SIMH) and Fun Cool Free Inc. and hired Miguel “Michael” Mesa to help him “attract and defraud investors” in both companies. 

Sizer allegedly provided Mesa with a list of pitch points for use by boiler-room agents hired by Mesa to sell company stock.

Investor were told their funds would be used for research and development and no sales commissions would be paid out of investor funds. According to the SEC, Sizer and Mesa misappropriated approximately 90 percent of the funds raised from investors, enriching themselves and paying sales commissions to the boiler-room agents.

Several hundred investors nationwide were allegedly defrauded out of a total of approximately $20 million.

In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida today announced criminal charges. Sizer and Mesa have agreed to partial settlements of the SEC’s charges without admitting or denying the allegations. They both agreed to be barred from future penny stock offerings, and Sizer agreed to be barred from serving as an officer or director of a public company.