[ by Howard Haykin ] The SEC announced today that it charged Edward Laborio and others for their roles in a boiler room scheme that used high-pressure sales tactics to raise nearly $6 million from about 150 investors through fraudulent sales of 5 unregistered securities offerings.  involving a group of related entities.  The scheme allegedly ran about 3 years, from December 2006 to August 2009. Named in the Complaint. Laborio, formerly of Boston, MA, now resides in Boca Raton, FL.  In addition, the SEC also charged:

• Jonathan Fraiman of Lantana, FL;
• Matthew Lazar of Westerville, OH;
• 7 entities controlled by Laborio: (i) Envit Capital Group; (ii) Envit Capital; (iii) Envit Capital Holdings; (iv) Envit Capital Private Wealth Management; (v) Envit Capital Multi Strategy Mixed Investment Fund; (vi) Aetius Group; and, (vii)  Aetius Group (collectively, the "Envit Companies").

SEC Findings and Allegations. In the SEC complaint, filed in the U.S. District Court for the District of Massachusetts, Laborio and Fraiman allegedly made multiple misrepresentations and misleading statements to investors about the Envit Companies’ businesses, revenues, financial projections, uses of investor funds, and historical returns generated by Envit Fund, a purported hedge fund that in reality never conducted any operations.  Laborio also allegedly created scripts with sales pitches containing fabricated information.

• e.g., one script allegedly included unfounded claims that investors would receive quarterly dividends and “2-3x return on money.”

Laborio also is alleged to have used investor proceeds to cover gambling losses, to make direct payments to himself, and to cover personal expenses. Fraiman allegedly represented to an investor that Envit Fund, the purported hedge fund, returned 43% in 2006 and 44% in 2007, even though the hedge fund was not launched until mid-2007 and never conducted any operations.  The complaint further alleges that Lazar raised $585,000 from approximately 10 investors through the sale of a PIPEs  in Envit Group - one of the 5 unregistered securities offerings - by misrepresenting that the PIPE guaranteed an annual 8.5% dividend, and that it was safe, like a fixed annuity or a CD. Alleged Violations. The SEC alleges that all defendants violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder.  In addition:

• Laborio, Fraiman, Lazar and Envit Wealth supposedly violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940;
• Laborio, Fraiman, and Envit Wealth further violated Advisers Act Section 206(4) and Rule 206(4)-8 thereunder;
• Laborio, Fraiman, and Lazar violated Exchange Act
• Laborio, Envit LLC, Envit Group, Envit Holdings, and Aetius PLC violated Securities Act Sections 5(a) and 5(c);
• Laborio violated Exchange Act Section 16(a) and Rule 16a-3 thereunder;  and,
• Envit Fund and Aetius LLC violated Section 7(a) of the Investment Company Act of 1940.

Sanctions the SEC will Seek. Among other sanctions, the SEC seeks to collect disgorgement plus prejudgment interest, civil penalties, penny stock bars against Laborio, Fraiman, and Lazar, and an officer and director bar against Laborio. The SEC previously suspended trading in the securities of Envit Group in May 2009 and subsequently revoked the registration of the securities of Envit Group in September 2009. For further details, go to:  [SEC Litigation Rel. 22444, 8/10/12].