SEC v. Vuuzle Media Corp.; Ronald Shane Flynn; and Richard Marchitto, No. 2:21-cv-01226, District of New Jersey (Jan. 1, 2021) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
U.S. SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
VUUZLE MEDIA CORP.,
RONALD SHANE FLYNN, and
Civil Action No. _______________
RICHARD MARCHITTO,
JURY TRIAL
DEMANDED
Defendants.
COMPLAINT
Plaintiff United States Securities and Exchange Commission (“SEC” or the
“Commission”) alleges as follows against the following Defendants, whose names and last
known addresses are set forth below:
a. Vuuzle Media Corp. – 42 Broadway, Suite 12-117, New York NY, 10004;
b. Ronald Shane Flynn – Angeles City, Philippines and/or Dubai, United Arab
Emirates;
c. Richard Marchitto – Rockaway, New Jersey.
SUMMARY
1. This action concerns an offering fraud perpetrated by Vuuzle Media Corp.
(together with its predecessor entities, hereinafter referred to as “Vuuzle”) and its founder,
Ronald Shane Flynn (“Flynn”), and aided and abetted by Richard Marchitto (“Marchitto”).
2. From approximately September 2016 through at least May 2020, Vuuzle and
Flynn offered and sold more than $14 million of Vuuzle common stock and warrants to investors
throughout the United States.  In violation of the securities laws, Flynn secretly diverted

 

approximately $5 million to support his aggressive fund-raising operations and pay commissions
to stock promoters.  Flynn misappropriated another nearly $5 million in direct transfers to his
personal bank accounts overseas and by using corporate credit and debit cards for personal items,
such as dating and gambling applications, gold bars, and luxury travel.  An additional
approximately $2 million appears to have been used for other expenses in furtherance of the
fraud, including, but not limited to, Ponzi-like payments to a limited number of investors, Fed Ex
charges, rent for a New York office, and attorney fees.
3. To raise funds, Vuuzle and Flynn falsely represented to investors that Vuuzle was
a legitimate, successful, and growing company in the business of providing online live streaming
and entertainment services.  In fact, Vuuzle was little more than a front for a boiler room Flynn
controlled.
4. Operating primarily out of the Philippines under a series of different corporate
entities, Flynn, directly and through marketing teams acting at his direction, engaged in
aggressive and high-pressure sales campaigns.  Among other tactics, Flynn and his boiler room
employees cold-called potential investors and, through relentless and deceptive phone and email
communication, convinced them to buy Vuuzle securities.  In return for bringing investor funds
to Vuuzle, Flynn paid substantial commissions to himself and others.
5. The securities offered were common stock.  The price per share ranged from $1 to
$5, with most investors paying $5 per share.  Many investors were also granted warrants that
provided the investor the purported right to purchase additional shares for a limited time at a
discounted price.  None of these securities were registered with the Commission.
6. Vuuzle and Flynn made numerous materially false and misleading statements in
their communications with investors, filings with the Commission, and in offering documents,
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including Vuuzle’s Private Placement Memoranda (“PPMs”).  For instance, Vuuzle and Flynn
told investors that their funds would be used to operate and build Vuuzle’s online streaming
business, which would earn millions of dollars in revenue from service fees and advertising.  In
fact, of the $14 million raised in investor funds, Vuuzle and Flynn used only approximately $2
million to build the streaming applications, which served as props to raise more investor funds.
7. Vuuzle and Flynn also falsely represented Vuuzle as a “pre-IPO” investment
opportunity that would provide returns to investors in the form of dividends and skyrocketing
post-IPO stock values. Yet, Vuuzle has never made a profit, never paid dividends to any
investor, and never made a public offering on any stock exchange.  From its inception in October
2016 through May 2020, Vuuzle’s U.S. bank account reflects total business revenue of less than
$1,670.
8. Vuuzle’s public filings and offering documents falsely suggest Flynn had only a
peripheral relationship with the company, if any.  For example, in the PPMs, Vuuzle described
Flynn as merely a “non-voting beneficial owner” of a Vuuzle corporate shareholder.  And
Vuuzle’s Forms D, filed with the Commission in 2017 and 2019, do not name Flynn as a related
party at all.  In fact, however, Flynn exercised ultimate control over every part of Vuuzle’s
business for the primary purpose of enriching himself.
9. Vuuzle and Flynn concealed Flynn’s control over Vuuzle by falsely representing
to investors and the public that Vuuzle was operated by a legitimate team of independent
executive officers.  In early 2018, Flynn hired two former executives of a publicly-traded
company to ostensibly serve as Vuuzle’s Chief Executive Officer (“CEO”) and Chief Operating
Officer (“COO”).  Their hiring was all for show.  During their time at Vuuzle, both individuals
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raised serious questions about Flynn’s operation of Vuuzle, and both were gone by November of
that year.
10. Vuuzle and Flynn were aided and abetted in their fraud by Marchitto, a former
dentist who had lost money investing in one of Flynn’s previous business ventures.  He provided
substantial assistance to Vuuzle and Flynn by acting as their U.S. corporate and financial
presence, thereby enhancing Vuuzle’s aura of legitimacy as a U.S.-based company.  Because
Flynn avoided U.S. jurisdiction, Marchitto was instrumental to the fraud.
11. Specifically, Marchitto (a) organized Vuuzle’s predecessor legal entity and served
as its initial member; (b) opened and maintained a U.S. bank account for Vuuzle, which was
used to receive and disburse the overwhelming majority of investor funds; (c) maintained a New
York office space, which was represented to investors as Vuuzle’s primary place of business;
and (d) facilitated Flynn’s misappropriation of investor funds by transferring funds to Flynn’s
accounts overseas and opening and maintaining corporate credit cards, which Flynn used for
personal expenses.
12. Marchitto was the sole signatory to Vuuzle’s U.S. bank account and had direct
access to that account.  Marchitto also collected mail from the New York office space and
deposited investor checks to Vuuzle’s U.S. bank account.  Because he had all the account
information, Marchitto knew or was reckless in not knowing that investor funds were deposited
to that U.S. bank account, and that his actions directly aided Flynn in misappropriating these
funds.  By his conduct, he substantially assisted Flynn’s and Vuuzle’s violations of the securities
laws.
13. By perpetrating this offering fraud, Vuuzle and Flynn have violated Section 17(a)
of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and Section 10(b) of the
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Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17
C.F.R. § 240.10b-5] thereunder, and Marchitto aided and abetted those violations.  By failing to
register the offering of Vuuzle securities, Vuuzle and Flynn also have violated Section 5 of the
Securities Act [15 U.S.C. § 77e].  And, by acting as a broker in selling Vuuzle securities without
being registered as, or associated with, a registered broker-dealer, Flynn has violated Section
15(a) of the Exchange Act [15 U.S.C. § 78o(a)].
14. Because of the Defendants’ unlawful conduct, the Commission respectfully
requests that the Court: (i) permanently enjoin each Defendant from further violations of the
foregoing securities laws, (ii) order each Defendant to disgorge the unlawful profits from their
violations with prejudgment interest, (iii) impose civil money penalties on each Defendant, and
(iv) impose such other and further relief as the Court may deem just and appropriate.
JURISDICTION AND VENUE
15. The Court has jurisdiction over this action pursuant to Section 20 of the Securities
Act [15 U.S.C. §§ 77t(b)] and Sections 21A and 27 of the Exchange Act [15 U.S.C. §§ 78u-1,
78aa].  Defendants, directly or indirectly, singly or in concert with others, made use of the means
or instruments of transportation and communication in interstate commerce, or of the mails, in
connection with the acts, transactions, and practices alleged in this Complaint.
16. Venue is proper in this district under Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa] because, among
other things, Defendant Marchitto resides in this district, and Defendants Vuuzle and Flynn have
targeted, communicated with, and raised money from investors that reside in this district.
DEFENDANTS
17. Vuuzle Media Corp. is a Delaware corporation formed on August 22, 2017 as a
successor entity to Boink Live Streaming LLC, which was incorporated in Delaware on
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September 16, 2016.  (A separate corporation called Boink Live Streaming Corp. was also
incorporated in Delaware on August 22, 2017 and, until October 26, 2018, when the name was
officially changed to Vuuzle Media Corp., company documents referred to the entity
interchangeably as Boink Live Streaming, Boink Live Streaming Corp., and Boink Live
Streaming LLC.)  Vuuzle markets itself as a provider of online live streaming and entertainment
services.  Vuuzle has claimed at various times to have offices around the world, including in
New York City, Las Vegas, and Scottsdale, as well as the Philippines, United Arab Emirates, and
United Kingdom.  Vuuzle was founded by Flynn, who controlled Vuuzle’s operations at all times
during the relevant period.
18. Vuuzle has never registered any of its securities with the Commission.  Vuuzle
filed a Form D Notice of Exempt Offering of Securities on September 26, 2017 (in the name of
Boink Live Streaming Corp.), and an amendment on February 15, 2019 (in the name of Vuuzle
Media Corp.), claiming an exemption from registration under Securities Act Rule 506(b).
19. Ronald Shane Flynn (a/k/a Ronnie Shane), age 56, is a United States citizen,
resident of the Philippines and/or the United Arab Emirates, and the founder of Vuuzle.  While
Flynn currently holds no official title at Vuuzle, he is Vuuzle’s majority shareholder and
exercises ultimate control over all aspects of Vuuzle’s business, including its operations, online
presence, communications with investors, and company finances.
20. Flynn has been subject to at least two state cease-and-desist orders in connection
with his prior solicitations of investors: one dated October 4, 2000 by the Ohio Division of
Securities; and a second dated September 22, 2016 by the State of California Department of
Business Oversight.  Flynn was a registered representative of a registered broker-dealer from
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November 1988 to March 1989, but he is not currently registered with the Commission in any
capacity.
21. Richard Marchitto, age 72, is a retired dentist residing in Rockaway, New
Jersey.  Marchitto has held various titles at Vuuzle, including “VP Marketing” and “board
director.”  He acts on behalf of Vuuzle at Flynn’s direction.  For example, at Flynn’s direction,
Marchitto established the original Vuuzle entity (Boink Live Streaming LLC) on September 28,
2016 and was its initial member.  Also at Flynn’s direction, Marchitto opened Vuuzle’s primary
U.S. bank account (initially using his home address) – which Defendants used to receive and
transfer investor assets – and provided Flynn with electronic access to that account while
Marchitto remained the sole signatory.  In addition, Marchitto opened credit card accounts in the
names of his former dental practice and various Vuuzle entities and granted Flynn the use of
those cards.  Marchitto has never been registered with the Commission in any capacity.
FACTS
I. Vuuzle’s Purported Business
22. Vuuzle and Flynn convinced investors to buy Vuuzle securities by presenting
Vuuzle as a legitimate, successful, and growing provider of online live streaming and
entertainment services.  Investors were inundated with communications drafted and sent by
Flynn, directly or through his marketing teams, that used hyperbole to describe Vuuzle, its
products, and the online entertainment industry as whole.
23. Vuuzle, Flynn, and his subordinates told investors that Vuuzle would use their
funds to grow and operate Vuuzle’s business.  But instead, Flynn misappropriated the vast
majority of what Vuuzle received.  Of the $14 million investors gave Defendants, only
approximately $2 million was used to operate Vuuzle – just enough to build and maintain
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superficial versions of the online streaming applications from which Vuuzle was purportedly
going to earn revenue.  These purported products were mere props Flynn used to raise additional
investor funds.
24. Beginning in September 2016, Vuuzle and Flynn told investors that Vuuzle was
in the process of building a mobile phone application called “Bonk.live” (later called
“Bonk.be.live”) through which the company would provide a platform for performers who
wanted to livestream their talent to an audience.  Flynn, Vuuzle, and Flynn’s marketing teams
provided investors with revenue projections showing millions and, in some instances, even
billions of dollars in expected company earnings.  For example, in a September 11, 2016 email to
investors, Flynn claimed that “BONK LIVE HAS 6 UNIQUE INCOME STREAMS” and
depicted math equations purportedly reflecting revenues from each income stream ranging from
$50,457,600 per year to more than $21 billion per year.
25. On October 30, 2016, Flynn sent an another email to investors attaching a “press
announcement” in which he described Bonk.live as “the newest streaming super app in the
world” which was “nothing less than genius as it allows digital publishers, advertisers, and the
live social streamers to make enormous money.” In this press announcement, Flynn claimed that
the “advertising carousel” on Bonk.live “will earn the company more th[a]n 50 million United
States Dollars per year” and that advertising during an influencer’s live stream could result in
another “$350,000,000 Million” to “1 billion USD to 3 billion USD Dollars per year.”
26. Vuuzle and Flynn told investors that Bonk.live users would be able to purchase
virtual gift packages that they could send to live streamers they liked.  In that same October 30,
2016 announcement, Flynn told investors that “Bonk potential earnings with only 100 million
users buying one package of $128.95 per year is more than 12 billion [dollars] per year.”
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Performers that received enough virtual gifts were supposed to be able to cash out the value of
those gifts through debit cards. Indeed, Flynn sent investors photos of what appeared to be
Bonk-branded debit cards.  Yet, Vuuzle never actually created or distributed any such cards.
27. Despite these promises to investors, Bonk.live never made millions of dollars, or
really any money at all.  Using outside vendors to build the platform, Flynn directed just enough
money to create an application with the minimum functionality necessary for downloading on a
mobile device.  Flynn then used the existence of the app as proof of Vuuzle’s legitimacy, by, for
example, sending investors images of the Bonk.live application downloaded to his own phone.
28. Vuuzle’s revenue projections assumed that there would be millions of Bonk.live
users.  In fact, however, there were not.  From May 25 through November 15, 2018, the average
daily number of devices using the Bonk.live app was 371.  Flynn knew the actual number of
users because he received weekly emails containing updated charts of Bonk.live user data.
29. Moreover, Flynn knew that there never could be millions of users.  In an email
dated September 27, 2018, a Vuuzle adviser told Flynn that his first discussion about the
Bonk.live application was “terrifying” because he “just found out how weak and undeveloped
this whole initiative is right now.”  In particular, the adviser emphasized that he had just learned
that the software could only handle 40,000 users with “a full system crash imminent at 50,000+.”
Flynn responded that he already knew the app’s limitations, stating: “[t]he question about users
is not a new question as it was addressed months ago.”
30. In approximately November 2018, Vuuzle began to shift its focus away from the
Bonk.live app.  Flynn, directly and through his marketing teams, told investors that Vuuzle was
moving its business toward online streaming of television shows, through a mobile application it
later called “Vuuzle TV.”  Flynn drafted and sent to investors, directly and through his marketing
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teams, multiple emails raving about Vuuzle TV, its capabilities, and its potential.  According to
this marketing material, Vuuzle TV was going to offer free as well as paid versions of its app and
would earn money through subscription fees and advertising.  Investors were told that online
streaming was going to be the next revolution in entertainment and that Vuuzle investors would
earn “gargantuan return[s].”
31. For example, on April 13, 2019, Flynn sent an email to investors with an attached
document titled, “Vuuzle TV’s Ten Million Dollar Investment Is Set To Win OTT subscribers
while eliminating the competition.”  Flynn encouraged investors to “cash out of those mediocre
investments and finally make a sizeable investment in Vuuzle Media and get paid for being in
the right place at the right time with an investment that will win you BIG money!!!!!!!”
32. Flynn’s statement that “ten million dollar[s]” was invested into building Vuuzle
TV was false.  As described above, Flynn directed just enough money toward the business to
build a mobile application that users could download and view some television shows.  Once the
app was available, Flynn sent investors, directly and through his marketing teams, links to the
Vuuzle.TV site along with images of Vuuzle.TV on his phone.
33. And, contrary to the promises of “BIG money,” Vuuzle TV has not resulted in the
promised revenues.  From its inception in October 2016 through May 2020, Vuuzle’s U.S. bank
account reflects total business revenue of less than $1,670.  In its entire four years of operation,
through all the various mobile products Vuuzle and Flynn have hyped, Vuuzle has never made a
profit.
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II. Vuuzle was a Front for Flynn’s Boiler Room
34. Rather than the legitimate, successful business touted to investors, Vuuzle was
simply a front for a boiler room, the sole purpose of which was to bring investor funds to Vuuzle
to be spent by Flynn and at Flynn’s direction.
35. Operating primarily out of the Philippines, Flynn directed marketing teams
headed by four to six “Investment Representatives” (“IRs”) who were mostly close associates of
Flynn or members of his family.  The marketing teams operated, at varying times, through four
companies under Flynn’s control: WorldCom Online Marketing, Inc.; Bonk Marketing Trade
and Promotion, Inc.; iMagically LLC; and Vuuzle Media Corp Fze LLC.
36. Together, Flynn and the marketing teams engaged in coordinated and aggressive
sales campaigns to convince investors to buy Vuuzle securities.  These sales campaigns involved
repeated, high-pressure sales calls.  Flynn and his marketing teams also inundated current and
potential investors with emailed marketing materials – sometimes several in a single day –
relating to the business of Vuuzle, its products, and the industry as a whole.
37. Vuuzle and Flynn identified potential investors by purchasing “lead lists” of
purportedly accredited investors from several independent sellers, for anywhere from $1,000 to
$5,000 per list.  In addition to names and contact information, certain lists also included
information such as the types of investments the investor was interested in and, sometimes,
descriptions of the investors themselves.  For instance, one lead list received by Flynn on June 5,
2019, included additional, often profane, descriptors next to certain names such as “dumbass,”
“old,” or “stroke.”
38. After receiving the lists, Flynn had his marketing teams “wash” them for
duplicate names from prior lead lists and then directed them to cold-call the remaining entries.
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Flynn provided his marketing teams with initial “sales pitch” scripts for them to use in their calls
with potential investors.
39. In most cases, Flynn’s scripts directed comparisons of Vuuzle to Facebook,
Twitter, and Google, highlighting the billions of dollars made by Facebook shareholders from
the Facebook IPO.  In at least one instance, aware of the misrepresentations typically made to
investors, Flynn instead recommended that a particular investor be pitched “super clean.”  In a
July 19, 2018 email, Flynn directed an IR to call an acquaintance of the then-CEO of Vuuzle.
Specifically, Flynn instructed the IR to “just pitch clean because he will tell [the CEO]
everything and I don’t want him to scare [the CEO] into thinking we are selling dirty.”
Notwithstanding Flynn’s efforts, Vuuzle’s CEO resigned a few months after Flynn’s July 2018
email.
40. Flynn controlled nearly every aspect of the sales campaigns.  He directed the sales
pitches, created marketing material sent to investors via email, oversaw Vuuzle’s online
presence, controlled the content posted to Vuuzle’s websites, followed up directly with each
investor by phone to address any concerns, if necessary, and often “closed” the investment deal.
41. In addition to the IRs and marketing representatives, Flynn retained a staff of
secretaries, IT support specialists, content writers, and finance employees who reported solely to
him and who helped him solicit investor funds.  Flynn required each group of employees to
provide him with periodic reports of their “accomplishments.”  These reports make clear that
selling Vuuzle securities – not building a legitimate business – consumed the overwhelming
majority of Flynn’s and his employees’ time and energy.
42. For example, at any given time, Flynn retained anywhere from four to thirteen
secretaries to contact existing and potential investors (who they referred to as “clients”) and to
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maintain meticulous records of their efforts to procure additional investor funds.  To control the
messaging to investors, Flynn required his secretaries to send him written investor
communications for his approval before they were sent to investors.  In addition, Flynn arranged
for his secretaries to receive trainings in dealing with investors.  As part of these trainings, Flynn
was provided reports on each secretary’s skills in “pitch[ing] a customer,” including evaluations
of their English pronunciation and their ability to recite “rebuttals” to standard investor concerns.
43. On a daily basis, each secretary provided Flynn with a report of her
“accomplishments.”  These reports included detailed information about which investors the
secretary had contacted, when the communications occurred, what was said, how much the
investor planned to invest, and what next steps were necessary to close the investment deal.
Periodically, secretaries also sent group reports to Flynn, titled “Incoming Done Deals,” which
were consolidated lists of investors who had committed funds that Flynn could expect to receive
shortly.
44. Similarly, Flynn received daily reports from his “IT Department.”  These reports
reflected virtually no activity relating to the production or maintenance of the Bonk.live or
Vuuzle TV applications, the ostensible focus of Vuuzle’s business.  Instead, his IT employees
primarily reported providing computer and tech support to Flynn and his marketing teams,
“washing” lead lists, creating Skype and email accounts for new marketing representatives, and
double-checking investor calls reported by Flynn’s secretaries.
45. In addition, Flynn received “Treasury Department” reports, which had nothing to
do with business revenue or Vuuzle’s books and records.  Instead, these reports detail finance
employees’ efforts to track investments made into Vuuzle, issuing share certificates and warrant
agreements, and maintaining the Vuuzle shareholder records.
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46. Marketing team meeting notes similarly reflected the pressure to make investor
sales within the boiler room.  For instance, in a meeting that took place on May 25, 2019, one IR
told his marketing representatives that he needed potential investors to be “fully pitched and not
half-pitched,” and that marketing representatives should “do whatever it takes every day to
produce” investor sales.  As the IR reminded his marketing team, their focus should always be on
the money: “[y]ou have good opportunities to make good cash right here and right now if you
stay focus[ed] and do what needs to be done every day.”
47. As compensation for recruiting investors, Vuuzle and Flynn paid commissions to
Flynn, his IRs, and other boiler room staff based upon their respective roles.  To receive
payment, the IR was required to submit a request or invoice to Flynn for his approval.  No one
got paid unless Flynn approved it.
48. Accordingly, detailed spreadsheets were emailed to Flynn by his IRs, which
calculated each investor’s “done deal” investment amount, the initials of the boiler room staff
person credited with “opening” and/or “closing” the deal, and the percentage commission earned.
According to these charts, Flynn and his IRs received commissions from 8% to 15% of investor
funds, while lower level marketing reps were paid commissions of up to 2.5% of investor funds.
III. Vuuzle and Flynn Misused $10 Million in Investor Funds
49. Vuuzle and Flynn falsely represented to investors, directly and through the
marketing teams, that Vuuzle was a legitimate business and that it would use investor funds to
grow and operate the company.
50. For example, a 2017 PPM that was provided to investors describes the use of
investor proceeds as follows:
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51. In this chart and other similar statements, Flynn, Vuuzle, and their marketing
team represented that Vuuzle would use more than 99% of investor funds for building,
marketing, and selling Vuuzle’s online products.  They also claimed that only 0.5% of investor
funds would be used in connection with offering securities.  Similarly, in an email dated April
20, 2020, Flynn told an investor that “the corporation is using its funds to grow the platform.”
52. Vuuzle made similarly false statements in two Forms D filed with the
Commission in 2017 and 2019.
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53. Both Forms D contained identical responses that specifically represented that
Vuuzle had paid $0 in sales commissions and $0 in finders’ fees in connection with the offering
of Vuuzle securities.
54. As Flynn knew, these statements were false.  Of the $14 million invested in
Vuuzle, only approximately $2 million was ultimately used for the costs of building and
maintaining Vuuzle’s online products.   Flynn diverted more than $10 million for his personal
use and benefit and to support his boiler room operations, including paying commissions to
himself and others.
A. Flynn Personally Misappropriated $5 million of Investor Funds
55. Flynn diverted a total of nearly $5 million of investor proceeds from Vuuzle’s
primary U.S. bank account for his own benefit.  Specifically, from November 21, 2016 to August
22, 2019, Flynn transferred (or directed Marchitto to transfer) more than $2.6 million in investor
funds from Vuuzle’s U.S. bank account to Flynn’s personal bank accounts in Singapore and the
United Arab Emirates.  In addition, Flynn used investor funds to pay more than $2.3 million in
expenses that he incurred using corporate credit and debit cards.
56. The overwhelming majority of the $2.3 million in expenses were personal.  They
included, for instance, nearly $1 million in purchases at jewelry stores in Singapore, Dubai, and
the Philippines.  Receipts from the Dubai jewelry store reflect that some of Flynn’s purchases
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were for 24 Karat gold bars.  Flynn also racked up more than $500,000 in credit card charges for
his travel and entertainment, including international business class flights, luxury hotels, strip
clubs, and restaurants.  Flynn also used the Vuuzle debit card connected to the primary U.S. bank
account that received investor funds to spend another more than $25,000 on clearly personal
items, such as online dating and gambling applications.  Investors unwittingly paid for it all.
B. Vuuzle Paid Undisclosed Commissions to Flynn and Others
57. In addition to $5 million misappropriated for Flynn’s personal use, Vuuzle and
Flynn diverted another approximately $5.5 million in investor funds to sustain Flynn’s boiler
room operations, including paying undisclosed commissions to himself and his marketing staff.
58. Flynn engaged in efforts to conceal the nature of these payments.  From
November 22, 2016 through May 28, 2020, Flynn transferred (or directed Marchitto to transfer)
a total of $5.1 million from Vuuzle’s primary U.S. bank account to overseas accounts in the
names of entities under Flynn’s control, including more than $2.2 million to his company,
iMagically.
59. Flynn attempted to legitimize some of these payments by directing iMagically to
send Vuuzle invoices for “consulting fees.”  However, these invoices clearly reflect
commissions, as they contain investor names, along with the amounts invested, and a description
of the charges that said “40% Fees, Consulting, meetings, phone, time, FedEx, Credit charges &
secretarial.”  The bottom of each invoice had a note stating “[i]f you have any questions about
this invoice please contact Ronnie Shane Flynn” and providing Flynn’s phone and email address.
60. Once the funds arrived in the overseas accounts, Flynn directed them to be
disbursed to himself and his marketing staff, mostly in the form of commissions.  For example,
on April 9, 2019, Flynn sent his treasury staff an email with the subject line, “10k sent to
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magically” and a message saying, “SENT YOU TEN THOUSAND, GET JOSHUA PAID...”
Similarly, on August 24, 2019, Flynn sent his staff an email that stated “I have sent off an
additional 5 k that can be used for the commission this week coming up.”
61. Flynn directed an additional $400,000 of investor funds from Vuuzle’s U.S. bank
account to accounts controlled by independent stock promoters that recruited investors to
Vuuzle.  Emails reflect that these stock promoters were also paid commissions based on the
amounts invested by their investor recruits.
IV. Other Material Misrepresentations to Investors
62. To induce investors to purchase Vuuzle securities, Vuuzle and Flynn made
additional materially false and misleading statements, including that Vuuzle intended to proceed
with an IPO, pay investors dividends, and that Vuuzle was operated by a team of independent
executive officers.
A. False Promises of an Initial Public Offering
63. From the beginning, Flynn and his marketing teams falsely presented Vuuzle
(initially called “Boink Live”) as a pre-IPO investment opportunity.  For example, a December
15, 2016 email sent to investors and potential investors stated, in part:
This is your Opportunity to finally win big!  You missed out on
FACEBOOK, you missed out on TWITTER and GOOGLE, you
didn’t have an opportunity to be considered for SNAPCHAT.
Now you have a chance to get involved with the #1 social platform
for broadcasting, advertising and watching live streaming
videos.... Facebook founder Mark Zuckerberg earned 19.1 Billion
United States Dollars after just 30 seconds in the stock market!!!!
... BONK LIVE is like mixing up FACEBOOK, GOOGLE,
TWITTER, and SNAPCHAT and injecting it with an overdose of
steroids!
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64. Another email sent on the same day to many of the same investors and potential
investors emphasized the supposed urgency of investing immediately, stating:
The opportunity is now and it won’t last forever, or even a few
more months.  Investment is secured and once the 250 investors
required to go public has been reached, Bonk Live will be the next
big stock people wish they didn’t pass down no matter how much
money they didn’t have at the time. Beg, Borrow, Steal or make
more excuses...
65. Flynn and his marketing teams were even more explicit in phone conversations,
telling investors and potential investors that they could expect Vuuzle’s stock price to increase to
up to $25 to $30 a share or more after the promised IPO.  However, notwithstanding claims that
the investment opportunity would not last “a few more months,” Vuuzle did not go public.
66. The inevitable lack of an IPO – Vuuzle was, after all, little more than a boiler
room front – did not deter Flynn, Vuuzle, and the marketing teams from continuing to lure
investors with promises that an IPO would eventually occur.  For example, on August 19, 2019,
investors received an email stating that “[w]e are very close to making the announcement that the
company will be going public.”  The email claimed that Vuuzle had hired a “federally regulated
trust company in Canada” as the company’s transfer agent.  Investors were advised that
“[e]veryone must talk with Ronnie Flynn who will be gathering information” to provide to the
transfer agent.
67. These representations were false and misleading, and Flynn knew it.  As of
August 2019, Vuuzle had made no preparations to go public.  Despite having told investors that
Vuuzle had hired a transfer agent, Flynn sent an email to a former Vuuzle CEO five days later
denying that fact, stating “[w]hen we have a transfer agent, I will inform you. Until then, I am
still building the company.”  That same day, Flynn, responding to the former CEO’s questions
19

 

about Vuuzle’s plans to go public, stated, “[i]f there was anything to tell you I would ... [r]ight
now the company is negative and owes lots of money.”
68. In May 2020, Vuuzle and Flynn sent investors yet another email announcing
plans for an IPO.  This time, they claimed that a group of Swedish investors had paid $50 million
to acquire 10% of Vuuzle.  Vuuzle and Flynn represented that these purported investors would
form a Swedish corporation, called Vuuzle Media Sweden AB, which they intended to publicly
list on the Nasdaq Stockholm.  Since May, Flynn and Vuuzle have continued to send investors
emails reinforcing the idea that Vuuzle is about to be listed in Sweden.
69. Vuuzle and Flynn have used the purported upcoming Swedish IPO to pressure
some investors to exercise their warrant options – thereby sending even more money to Vuuzle.
Yet there is no evidence that Vuuzle is preparing to go public in Sweden.  Moreover, the Nasdaq
Stockholm has certain listing criteria – including a documented history of profitability – which
Vuuzle cannot possibly meet because, as Flynn knows, it has never made a profit.
B. False Promises of Dividends
70. To induce individuals to invest, Vuuzle and Flynn also promised that Vuuzle
would pay shareholders dividends.
71. Vuuzle, Flynn, and the marketing teams, however, apparently gave different
investors and potential investors different information about the dividends.  Some earlier
investors were told to expect dividend payments within a few months of their investments.  For
instance, one email sent to investors and potential investors on December 5, 2016 stated that,
“[t]he first projected dividend is for the end of February amounting to around $2.50 per share per
quarter on the low side to $10 per share on the high side,” based on expected revenues of
$50,000,000 in the first quarter of 2017.
20

 

72. Another investor received an emailed memorandum from the purported
“CEO/President” of Vuuzle dated July 26, 2017, which represented in relevant part that “[a]s a
result of the stream of revenue, the company intends to pay its first quarterly dividend on or
about Oct. 19, 2017 with additional quarterly dividends on or about every 90 days thereafter ...”
73. According to the July 26, 2017 memo, “[a]t the time the company goes public, the
dividend will cease or be re-evaluated.”  In contrast, other investors were told they would not
receive dividends until Vuuzle was publicly listed.
74. In any event, no dividends were ever paid, and no dividends were ever going to be
paid because, as Flynn knew, Vuuzle was not a legitimate business.  Vuuzle had little to no
revenue from operations, and investor funds mostly lined Flynn’s pockets.
C. Flynn Concealed his Interest and Control from Investors
75. Flynn exercised ultimate control over every part of Vuuzle’s business for the
nearly exclusive purpose of enriching himself.  No one was paid without Flynn’s approval –
from the purported President and CEO, to the technical vendors, to the lead list providers, to his
own marketing representatives.  Flynn controlled who was hired and fired, what material was
posted to Vuuzle’s online websites, what was said to investors and prospective investors, how
and when share certificates were issued, and how investor funds were spent.
76. Yet Vuuzle and Flynn falsely represented to investors and the public that Vuuzle
was a legitimate business operated by a team of independent executive officers.  Flynn presented
himself as merely the founder and a major shareholder of the company, with no actual control
over Vuuzle’s operations.
77. For instance, Vuuzle’s 2017 PPM only mentioned Flynn as the “non-voting
beneficial owner” of iMagically LLC, which was described as the majority shareholder of
21

 

Vuuzle, holding 80 million shares.  According to the PPM, Josh Flynn (Flynn’s adult son) was
the “manager” of iMagically, and he was, supposedly, “free to vote his shares without
consequence from the Non-Voting Member” (Flynn).
78. This statement was false.  Flynn himself was Vuuzle’s majority shareholder, and
the 80 million shares were issued in his name.  iMagically was nothing more than a corporate
name used for Flynn’s boiler room, where Flynn was everyone’s “boss,”, including his son Josh.
79. Indeed, Josh Flynn had to request his father’s approval even to get paid.  And on
those occasions when Flynn determined that Josh Flynn (along with other boiler room
employees) had not met his employment obligations, Flynn would discipline him by taking away
some of his commissions for the relevant period.
80. For example, on July 19, 2019, Flynn directed a treasury department employee to
send a notice to a group of four IRs, including his son, Josh Flynn, which stated:
Despite all of the reminders and warnings by the Founder, still it
has been observed that you are not reporting to work daily and if
it’s not late, early our or worse is absent.
International Representatives should be on top of their Marketing
Sales to drive cash, as you know that the Founder is paying all the
bills and expense of the Company...
For this reason, the Founder will be deducting certain amount
from your commission for the following violation:
a. Absent for 1 day ---------------------------$200.00 Deduction
b. Late for the day or early out-------------$100.00 Deduction
81. When investors asked Flynn questions about Vuuzle, such as why dividends had
not been paid or why the company has not progressed to an IPO as promised, Flynn claimed he
was not in control.  For instance, on April 12, 2019, an investor emailed Flynn stating, “you
should remember what you put me through on this thing when you told me over and over again
22

 

that this comp[a]ny would go public and I would have my money in time to pay my taxes.”  In
response, Flynn stated “I am a shareholder in the company like you are.”  He then directed the
investor to speak with an IR for additional information.
82. In that same email, the investor asked Flynn to return $10,000 because “I relied
on what you told me and now I am really in a pickle.”  Flynn responded by claiming he did not
have the money to give the investor; yet, less than two weeks later, Flynn found $13,000 to pay
commissions to his boiler room staff.  In an email dated April 23, 2019, Flynn forwarded a wire
transfer notice of $13,000 from Vuuzle’s U.S. bank account to iMagically, directing his staff to
“get Joshua his commission asap...money sent!!!!!!!!”
83. Vuuzle concealed from investors Flynn’s financial relationship with the company,
including the transfers of funds between Vuuzle and Flynn’s overseas entities such as
iMagically.  In fact, the PPM included a section that expressly denied the existence of any related
party transactions:
Certain Relationships and Related Transactions
We have not entered into any material transactions with any
director, executive officer, promoter, security holder who is a
beneficial owner of 5% or more of our common stock, or any
immediate family member of such persons.
84. This statement was obviously false.  As discussed above, Vuuzle paid Flynn and
his companies approximately $5 million for recruiting investors, including more than $2.2
million transferred to an overseas account held in the name of Flynn’s company, iMagically.
85. While Vuuzle’s PPM misrepresented the nature of Flynn’s role, Vuuzle’s Forms
D, filed with the Commission in 2017 and 2019, did not even name Flynn as an individual
related to Vuuzle.
23

 

86. The regulations for such Forms D required Vuuzle to provide: (1) a list of related
persons, defined to include “[e]ach executive officer and director of the issuer and person
performing similar functions”; (2) the name and address of each person who was to be or will be
paid commissions or other consideration in connection with the sales of securities in the offering;
(3) the amount of sales commissions paid or estimated to be paid; and (4) the “amount of gross
proceeds of the offering that has been paid or is proposed to be used for payments to any of the
persons required to be named as executive officers, directors or promotors” of the issuer.
87. Accordingly, Vuuzle was required to identify Flynn on the Forms D as both the
person “functionally” in control of Vuuzle and as a promoter of Vuuzle securities who was paid
commissions.  Instead, the Forms D listed as related parties, individuals that, in reality, were
hired by Flynn, reported to Flynn, and relied on Flynn to be paid.
V. Marchitto Aided and Abetted Vuuzle and Flynn in Defrauding Investors
88. Vuuzle and Flynn were aided and abetted in their fraud by Marchitto, a former
dentist who claims to have lost money investing in one of Flynn’s previous business ventures.
Marchitto has been involved with Vuuzle from the beginning.  Over time, Marchitto has held
various titles with Vuuzle.  For instance, in Vuuzle’s 2017 PPM, Marchitto was described as the
“VP Marketing.”  Sometime in 2019, Marchitto was named a Vuuzle director and identified
himself as such on Vuuzle’s 2019 Form D amendment filed with the Commission.  In
communications with third parties, Flynn and Marchitto often referred to each other as business
“partners.”
A.        Marchitto        Provided        Substantial        Assistance to Vuuzle and Flynn
89. At Flynn’s direction, Marchitto provided substantial assistance to Vuuzle and
Flynn, including by establishing a U.S. corporate and financial presence for Vuuzle, collecting
24

 

and depositing investor checks to Vuuzle’s U.S. bank account, and facilitating Flynn’s misuse of
investor funds.
90. Because Flynn was unwilling to travel to the United States, Marchitto’s acts were
essential to the success of Vuuzle’s and Flynn’s fraud.  Without Marchitto’s assistance, Flynn
would not have been able to portray Vuuzle as a U.S. company, a claim several investors have
identified as a significant factor in their decision to invest in Vuuzle.
91. From at least September 9, 2016 – before the first Boink entity was organized in
the United States – through November 23, 2016, Marchitto accepted Vuuzle investor funds into
the account of another Flynn-controlled entity, called E Diamond Trade LLC, for which
Marchitto was the signatory.  In total, more than $175,000 of Vuuzle investments were deposited
to the E Diamond account via both wire-transfer and checks that were clearly marked for
investment.  Of these funds, only $1,000 ever ended up in Vuuzle’s primary U.S. Bank account,
while Marchitto used more than $95,000 to pay Flynn’s credit card bills.  He sent another
$55,000 directly to Flynn’s personal bank account in Singapore.
92. On September 16, 2016, Marchitto also organized Vuuzle’s first predecessor
entity, Boink Live Streaming LLC (“Boink LLC”), in Delaware, using Marchitto’s home address
in Rockaway, New Jersey, as the entity’s corporate address.  On September 23, 2016, Marchitto
successfully obtained a tax identification number for Boink LLC from the Internal Revenue
Service.  And, on September 28, 2016, Marchitto had himself designated the “Initial Member” of
the Boink LLC.
93. In addition to forming Boink LLC, Marchitto also facilitated the incorporation of
Boink Live Streaming Corp. (“Boink Corp.”).  On August 23, 2017, Marchitto wrote a letter to
the Delaware Secretary of State, Division of Corporations, wherein he identified himself as the
25

 

“organizer of ‘Boink Live Streaming LLC’” and expressly authorized the incorporation of Boink
Corp.
94. On October 11, 2016, Marchitto opened Vuuzle’s primary bank account at a large
New York City-based bank.  The account was initially opened in the name of Boink LLC and
later changed to Vuuzle Media Corp.  This was Vuuzle’s primary U.S. bank account, and it was
used to receive the overwhelming majority of investor funds.  Although account records listed
Marchitto as the sole signatory at all times, Marchitto gave Flynn electronic access to the
account, including the ability to execute transactions in the account.  In addition, Marchitto
arranged for the bank to send wire transfer confirmations directly to Flynn’s email address.
95. Flynn and Vuuzle directed Vuuzle investors to send their funds to this U.S. bank
account, and Marchitto (at Flynn’s direction) and Flynn transferred the overwhelming majority
of these proceeds to overseas accounts in the name of Flynn or entities Flynn controlled.
Marchitto monitored the U.S. account and provided Flynn or his boiler room staff with updates
when investor funds were deposited into the account.  Periodically, Marchitto printed copies of
bank account statements and sent them via facsimile to Flynn’s office in the Philippines.
96. In addition to providing a U.S. bank account for Vuuzle, Marchitto also facilitated
the process of obtaining and maintaining a U.S. address for Vuuzle.  By his actions, Marchitto
created the appearance that Vuuzle had a substantial physical corporate presence in New York.
Many investors, reassured that Vuuzle was a U.S.-based company, mailed their investment
checks and subscription documentation to this New York address.
97. In the beginning, Marchitto used his own residential address in New Jersey on
Vuuzle documents.  At some point, Marchitto began using the address of his former Manhattan
26

 

dental practice located at “42 Broadway, 1536, New York, New York.”  This address even
appeared on early versions of the 2017 PPM.
98. Beginning in 2017, Vuuzle began using a virtual office address located at “42
Broadway, Suite 12-117, New York, New York” – again, the same building where Marchitto’s
former dental practice was located.  Marchitto signed the checks issued from Vuuzle’s U.S. bank
account to pay the monthly rent on this address.
99. Vuuzle and Flynn identified the Manhattan location as Vuuzle’s primary place of
business on several documents, including the Forms D filed with Commission, and in email
communications with investors. When investors sent mail to this New York address – including
subscription documentation and investment checks – Marchitto was responsible for picking up
the mail, forwarding relevant communications on to Flynn, and depositing any investor checks
into Vuuzle’s U.S. bank account.
B. Marchitto Knew or Was Reckless in Not Knowing that Vuuzle and Flynn
Misused Investor Funds
100. Marchitto knew or was reckless in not knowing that Vuuzle and Flynn were
engaged in fraudulent conduct; he had information that (1) Vuuzle’s U.S. bank account was
almost entirely funded by investors and (2) that a significant amount of those investor funds were
spent by Flynn or sent to his personal bank accounts.  Moreover, Marchitto ignored early
communications from at least one investor expressing concerns about Vuuzle, and he thereafter
continued to provide assistance to Vuuzle and Flynn.
101. Again, Marchitto was the sole signatory and had direct access and control over the
U.S. bank account, which received nearly $14 million in investor funds.  Account statements
reflecting these investments were first sent directly to Marchitto’s residence and later to the
Manhattan address that Marchitto monitored.
27

 

102. Investor deposits to Vuuzle’s U.S. bank account came in the form of wire
transfers or checks, primarily from individuals or retirement accounts in large, round dollar
increments.  In many instances, investors clearly marked the wire or check as being for the
purchase of Vuuzle securities.  For example, on July 30, 2019, Marchitto sent an email to Flynn
with an attached photo of three checks totaling $41,500, each of which clearly notes in the memo
line, “stocks” or “shares.”
103. On July 31, 2017, an investor contacted Marchitto about his investment, noting
that he had received inconsistent information from Vuuzle about dividends and revenues.  That
investor explicitly warned Marchitto to “[j]ust be aware and make your own decisions consistent
with fact.”
104. On September 4, 2017, that same investor emailed Marchitto again, this time with
a series of questions, noting that “[i]t seems that the primary income ...was from the sale of
stock.”  Marchitto responded by saying “I have no knowledge to answer[] the questions u
presented.”  Yet, at that time, Marchitto had direct access to Vuuzle’s primary bank account,
which contained numerous entries that plainly identified deposits as investments.  Consequently,
when responding, Marchitto either chose not to look into the source of Vuuzle’s income, or he
examined the statements and lied.  Nonetheless, Marchitto continued to assist Vuuzle and Flynn
in their fraud.
105. During this time, Marchitto also knew or was reckless in not knowing that Flynn
had misappropriated nearly $5 million in investor funds.  Flynn and Marchitto (at the direction of
Flynn) transferred nearly $2.6 million of investor funds from Vuuzle’s U.S. bank account to
Flynn’s personal accounts overseas.  Marchitto knew these were Flynn’s personal accounts
28

 

because Flynn sent Marchitto the account information, which showed clearly that the accounts
were in his name.
106. Vuuzle’s U.S. bank account statements also reflected more than $25,000 in debit
card charges by Flynn for expenses – such as dating websites, Netflix, and iTunes – that had no
discernable business purpose.  Apple receipts sent to Flynn confirm the personal nature of the
iTunes purchases, the vast majority of which were for online gambling, dating, and video games.
107. In addition, Marchitto opened credit card accounts in the name of his former
dental practice, as well as in the names of Boink and Vuuzle, and granted Flynn use of these
cards.  Marchitto had access to these statements, too, because they were likewise sent directly to
him at his New Jersey residence and, later, to Vuuzle’s New York City office.
108. As described above, the credit card statements Marchitto received make clear that
Flynn used these ostensibly corporate credit cards for his personal expenses, including luxury
travel, jewelry store purchases, and strip clubs. Nonetheless, Marchitto used investor funds in
Vuuzle’s U.S. bank account to pay off the balances on these credit cards.
VI. Vuuzle’s Securities Offering Was Not Registered
109. Despite raising over $14 million through the sale of stocks and warrants from
2016 to at least May 2020, Vuuzle has never registered with the Commission any securities
offering.  On September 26, 2017, Vuuzle filed with the Commission a Form D Notice of
Exempt Offering of Securities (under its previous name, Boink Live Streaming Corp.), which
announced a $10,000,000 private offering of securities.  An amended Form D was filed on
February 15, 2019.  In these notices, Vuuzle claimed that its offering was exempt from
registration under Rule 506(b) under the Securities Act.
29

 

110. In fact, however, Vuuzle did not qualify for any exemption for a “private
offering” of securities because, it was conducting a general solicitation through the cold-calling
of potential investors.
111. Moreover, it does not appear that Vuuzle, Flynn, or his marketing teams made any
independent effort to determine the accredited investor status, financial qualifications, or
investment experience of Vuuzle investors, all of which is pertinent to the availability of the Rule
506(b) exemption Vuuzle claimed.
112. Vuuzle’s 2017 PPM stated that it was offering shares to “accredited and
sophisticated investors only.”  The associated subscription documents contained a check-the-box
certification for investors to indicate whether they were “accredited” or “sophisticated.”
Although these completed subscription forms were sent to Flynn and his marketing teams for
their review, many investors never checked either box on the subscription form.  Still, Flynn and
Vuuzle took their money.
113. According to a treasury department report sent to Flynn on August 2, 2019, one
investor apparently told a Vuuzle employee that he was not accredited.  This information was
provided to Flynn, who instructed that the investor be accepted anyway.  Four days later, Vuuzle
accepted the investment and issued the investor Vuuzle shares.
114. As a result, numerous unaccredited investors ended up investing in Vuuzle.  None
of these investors ever received any revenue or earnings reports of any kind.
FIRST CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act
and Rule 10b-5 Thereunder
(Against Vuuzle and Flynn)
115. The Commission realleges and incorporates by reference the allegations in
paragraphs 1 through 114, as if they were fully set forth herein.
30

 

116. By engaging in the conduct described above, Vuuzle and Flynn, directly and
indirectly, in connection with the purchase or sale of securities, and by use of the means or
instrumentalities of interstate commerce, or the mails, has, with scienter: (a) employed devices,
schemes or artifices to defraud; (b) made untrue statements of material facts or omitted to state
material facts necessary in order to make the statements made, in light of the circumstances they
were made, not misleading; and/or (c) engaged in acts, practices, or courses of business which
operated or would operate as a fraud or deceit upon any person in connection with the purchase
or sale of any security.
117. By engaging in the foregoing misconduct, Vuuzle and Flynn have violated, and
unless enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]
and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
SECOND CLAIM FOR RELIEF
Violation of Section 17(a) of the Securities Act
(Against Vuuzle and Flynn)
118. The Commission realleges and incorporates by reference the allegations in
paragraphs 1 through 114, as if they were fully set forth herein.
119. By engaging in the conduct described above, Vuuzle and Flynn, directly and
indirectly, in the offer or sale of a security by the use of the means or instruments of
transportation or communication in interstate commerce or by use of the mails, has, with
scienter: (a) employed a device, scheme, or artifice to defraud; (b) obtained money or property
by means of any untrue statement of a material fact or any omission of a material fact necessary
in order to make the statements made, in light of the circumstances under which they were made,
not misleading;  or (c) engaged in a transaction, practice, or course of business which operates or
would operate as a fraud or deceit upon the purchaser.
31

 

120. By engaging in the foregoing misconduct, Vuuzle and Flynn have violated, and
unless enjoined will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
THIRD CLAIM FOR RELIEF
Aiding and Abetting Violations of Section 10(b) of the Exchange Act
and Rule 10b-5 Thereunder
(Against Marchitto)
121. The Commission realleges and incorporates by reference the allegations in
paragraphs 1 through 114, as if they were fully set forth herein.
122. By engaging in the conduct alleged above, Defendant Marchitto knowingly or
recklessly provided substantial assistance to Defendants Vuuzle and Flynn, who, with scienter,
directly or indirectly, singly or in concert with others, in connection with the purchase or sale of
a security, used the means or instrumentalities of interstate commerce or of the mails to employ
devices, schemes, or artifices to defraud; and to engage in acts, practices, or courses of business
which operated or would operate as a fraud or deceit upon others.
123. By engaging in the foregoing misconduct, Defendant Marchitto aided and abetted,
and unless enjoined will continue to aid and abet violations of Section 10(b) of the Exchange Act
[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
FOURTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Section 17(a) of the Securities Act
(Against Marchitto)
124. The Commission realleges and incorporates by reference the allegations in
paragraphs 1 through 114, as if they were fully set forth herein.
125. By engaging in the conduct alleged above, Defendant Marchitto knowingly or
recklessly provided substantial assistance to Defendants Vuuzle and Flynn, who, with scienter,
directly or indirectly, singly or in concert with others, in the offer or sale of a security, used the
means or instruments of transportation or communication in interstate commerce or used the
32

 

mails to employ devices, schemes, or artifices to defraud, or engaged in transactions, practices,
or courses of business which operated or would operate as a fraud or deceit upon a purchaser.
126. By engaging in the foregoing misconduct, Defendant Marchitto aided and abetted,
and unless enjoined will continue to aid and abet violations of Section 17(a) of the Securities Act
[15 U.S.C. § 77q(a)].
FIFTH CLAIM FOR RELIEF
Violation of Sections 5(a) and 5(c) of the Securities Act
(Against Vuuzle and Flynn)
127. The Commission realleges and incorporates by reference the allegations in
paragraphs 1 through 114, as if they were fully set forth herein.
128. By engaging in conduct alleged above, Defendants Vuuzle and Flynn, directly or
indirectly, through use of the means or instruments of transportation or communication in
interstate commerce, or of the mails, offered to sell or sold securities, or carried or caused such
securities to be carried through the mails or in interstate commerce for the purpose of sale or for
delivery after sale.
129. No registration statement was filed with the Commission or was in effect with
respect to the securities offered by Defendants Vuuzle and Flynn prior to the offer or sale of
these securities.
130. By engaging in the foregoing misconduct, Vuuzle and Flynn have violated, and
unless enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C.
§§ 77e(a) and 77e(c)].
33

 

SIXTH CLAIM FOR RELIEF
Violation of Section 15(a)(1) of the Exchange Act
(Against Flynn)
131. The Commission realleges and incorporates by reference the allegations in
paragraphs 1 through 114, as if they were fully set forth herein.
132. By engaging in the in conduct alleged above, Defendant Flynn, by the use of
means or instrumentalities of interstate commerce or of the mails, has engaged in the business of
effectuating transactions in, or inducing or attempting to induce the purchase or sale of securities
as a “broker.”
133. Flynn solicited investors, promoted the merits of a Vuuzle investment, facilitated
and negotiated the transactions, supervised and controlled a securities sales force, handled
customer funds, drafted offering documents, and was paid in commissions.
134. During the relevant time period, Defendant Flynn was not registered with the
Commission as a broker-dealer or a person associated with a broker-dealer registered with the
Commission.  Nor did any exemption from the broker-dealer registration requirements exist with
respect to the securities and transactions described in this Complaint.
135. By engaging in the foregoing misconduct, Flynn has violated, and unless enjoined
will continue to violate, Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court grant the following
relief:
(a) Enter a Final Judgment finding that Vuuzle, Flynn, and Marchitto each violated
the securities laws and rules promulgated thereunder as alleged against them herein;
34

 

(b) Enter an Order permanently restraining and enjoining Vuuzle, Flynn, and
Marchitto from committing future violations of the securities laws and rules promulgated
thereunder;
(c) Enter an Order requiring Vuuzle, Flynn, and Marchitto to disgorge all ill-gotten
gains, including prejudgment interest, resulting from the violations alleged herein;
(d) Enter an Order requiring Vuuzle, Flynn, and Marchitto to pay civil money
penalties pursuant to Section 20(d) of the Securities Act  [15 U.S.C. § 77t(d)] and Section 21A of
the Exchange Act [15 U.S.C. § 78u-1]; and
(e) Award such other and further relief as this Court may deem just and appropriate.
JURY DEMAND
Pursuant to Rule 39 of the Federal Rules of Civil Procedure, Plaintiff demands that this
case by tried to a jury.
Dated:  January 27, 2021.  Respectfully submitted,
/s/ Daniel J. Maher
Daniel J. Maher
Devon Staren
Attorneys for Plaintiff
U.S. Securities and Exchange Commission
100 F Street NE
Washington, DC 20549
(202) 551-4737 (Maher)
(202) 551-5346 (Staren)
[email protected]
[email protected]
Of Counsel:
Drew Isler Grossman
U.S. Securities and Exchange Commission
100 F. Street N.E.
Washington DC 20549
35

 

DESIGNATION OF AGENT FOR SERVICE UNDER LOCAL CIVIL RULE 101.1(f)
In accordance with Local Civil Rule 101.1(f), the undersigned hereby makes the
following designation for the receipt of service of all notices or papers in this action at the
following address:
United States Attorney's Office
District of New Jersey
Attention:  J. Andrew Ruymann
Assistant U.S. Attorney
402 East State Street, Room 430
            Trenton,            NJ            08608.
Dated: January 27, 2021
                                                                        Respectfully            submitted,
/s/ Daniel J. Maher
Daniel J. Maher
Devon Staren
Attorneys for Plaintiff
U.S. Securities and Exchange Commission
100 F Street NE
Washington, DC 20549
(202) 551-4737 (Maher)
(202) 551-5346 (Staren)
[email protected]
[email protected]
36

Case 2:21-cv-01226 Document 1 Filed 01/27/21 Page 1 of 36 PageID: 1 

UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 

U.S. SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

vs. 

VUUZLE MEDIA CORP.,  
RONALD SHANE FLYNN, and 

Civil Action No. _______________ 

RICHARD MARCHITTO, JURY TRIAL  
DEMANDED 

Defendants. 

COMPLAINT 

Plaintiff United States Securities and Exchange Commission (“SEC” or the 

“Commission”) alleges as follows against the following Defendants, whose names and last 

known addresses are set forth below: 

a. Vuuzle Media Corp. – 42 Broadway, Suite 12-117, New York NY, 10004; 

b. Ronald Shane Flynn – Angeles City, Philippines and/or Dubai, United Arab 
Emirates; 

c. Richard Marchitto – Rockaway, New Jersey. 

SUMMARY 

1. This action concerns an offering fraud perpetrated by Vuuzle Media Corp. 

(together with its predecessor entities, hereinafter referred to as “Vuuzle”) and its founder, 

Ronald Shane Flynn (“Flynn”), and aided and abetted by Richard Marchitto (“Marchitto”).  

2. From approximately September 2016 through at least May 2020, Vuuzle and 

Flynn offered and sold more than $14 million of Vuuzle common stock and warrants to investors 

throughout the United States. In violation of the securities laws, Flynn secretly diverted 



 

 

 

 

 

 

Case 2:21-cv-01226 Document 1 Filed 01/27/21 Page 2 of 36 PageID: 2 

approximately $5 million to support his aggressive fund-raising operations and pay commissions 

to stock promoters.  Flynn misappropriated another nearly $5 million in direct transfers to his 

personal bank accounts overseas and by using corporate credit and debit cards for personal items, 

such as dating and gambling applications, gold bars, and luxury travel.  An additional 

approximately $2 million appears to have been used for other expenses in furtherance of the 

fraud, including, but not limited to, Ponzi-like payments to a limited number of investors, Fed Ex 

charges, rent for a New York office, and attorney fees. 

3. To raise funds, Vuuzle and Flynn falsely represented to investors that Vuuzle was 

a legitimate, successful, and growing company in the business of providing online live streaming 

and entertainment services.  In fact, Vuuzle was little more than a front for a boiler room Flynn 

controlled. 

4. Operating primarily out of the Philippines under a series of different corporate 

entities, Flynn, directly and through marketing teams acting at his direction, engaged in 

aggressive and high-pressure sales campaigns.  Among other tactics, Flynn and his boiler room 

employees cold-called potential investors and, through relentless and deceptive phone and email 

communication, convinced them to buy Vuuzle securities.  In return for bringing investor funds 

to Vuuzle, Flynn paid substantial commissions to himself and others. 

5. The securities offered were common stock.  The price per share ranged from $1 to 

$5, with most investors paying $5 per share.  Many investors were also granted warrants that 

provided the investor the purported right to purchase additional shares for a limited time at a 

discounted price. None of these securities were registered with the Commission. 

6. Vuuzle and Flynn made numerous materially false and misleading statements in 

their communications with investors, filings with the Commission, and in offering documents, 

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Case 2:21-cv-01226 Document 1 Filed 01/27/21 Page 3 of 36 PageID: 3 

including Vuuzle’s Private Placement Memoranda (“PPMs”).  For instance, Vuuzle and Flynn 

told investors that their funds would be used to operate and build Vuuzle’s online streaming 

business, which would earn millions of dollars in revenue from service fees and advertising.  In 

fact, of the $14 million raised in investor funds, Vuuzle and Flynn used only approximately $2 

million to build the streaming applications, which served as props to raise more investor funds.   

7. Vuuzle and Flynn also falsely represented Vuuzle as a “pre-IPO” investment 

opportunity that would provide returns to investors in the form of dividends and skyrocketing 

post-IPO stock values. Yet, Vuuzle has never made a profit, never paid dividends to any 

investor, and never made a public offering on any stock exchange.  From its inception in October 

2016 through May 2020, Vuuzle’s U.S. bank account reflects total business revenue of less than 

$1,670. 

8. Vuuzle’s public filings and offering documents falsely suggest Flynn had only a 

peripheral relationship with the company, if any.  For example, in the PPMs, Vuuzle described 

Flynn as merely a “non-voting beneficial owner” of a Vuuzle corporate shareholder.  And 

Vuuzle’s Forms D, filed with the Commission in 2017 and 2019, do not name Flynn as a related 

party at all. In fact, however, Flynn exercised ultimate control over every part of Vuuzle’s 

business for the primary purpose of enriching himself. 

9. Vuuzle and Flynn concealed Flynn’s control over Vuuzle by falsely representing 

to investors and the public that Vuuzle was operated by a legitimate team of independent 

executive officers. In early 2018, Flynn hired two former executives of a publicly-traded 

company to ostensibly serve as Vuuzle’s Chief Executive Officer (“CEO”) and Chief Operating 

Officer (“COO”).  Their hiring was all for show.  During their time at Vuuzle, both individuals 

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raised serious questions about Flynn’s operation of Vuuzle, and both were gone by November of 

that year. 

10. Vuuzle and Flynn were aided and abetted in their fraud by Marchitto, a former 

dentist who had lost money investing in one of Flynn’s previous business ventures.  He provided 

substantial assistance to Vuuzle and Flynn by acting as their U.S. corporate and financial 

presence, thereby enhancing Vuuzle’s aura of legitimacy as a U.S.-based company.  Because 

Flynn avoided U.S. jurisdiction, Marchitto was instrumental to the fraud.   

11. Specifically, Marchitto (a) organized Vuuzle’s predecessor legal entity and served 

as its initial member; (b) opened and maintained a U.S. bank account for Vuuzle, which was 

used to receive and disburse the overwhelming majority of investor funds; (c) maintained a New 

York office space, which was represented to investors as Vuuzle’s primary place of business; 

and (d) facilitated Flynn’s misappropriation of investor funds by transferring funds to Flynn’s 

accounts overseas and opening and maintaining corporate credit cards, which Flynn used for 

personal expenses. 

12. Marchitto was the sole signatory to Vuuzle’s U.S. bank account and had direct 

access to that account.  Marchitto also collected mail from the New York office space and 

deposited investor checks to Vuuzle’s U.S. bank account.  Because he had all the account 

information, Marchitto knew or was reckless in not knowing that investor funds were deposited 

to that U.S. bank account, and that his actions directly aided Flynn in misappropriating these 

funds. By his conduct, he substantially assisted Flynn’s and Vuuzle’s violations of the securities 

laws. 

13. By perpetrating this offering fraud, Vuuzle and Flynn have violated Section 17(a) 

of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] and Section 10(b) of the 

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Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 

C.F.R. § 240.10b-5] thereunder, and Marchitto aided and abetted those violations.  By failing to 

register the offering of Vuuzle securities, Vuuzle and Flynn also have violated Section 5 of the 

Securities Act [15 U.S.C. § 77e].  And, by acting as a broker in selling Vuuzle securities without 

being registered as, or associated with, a registered broker-dealer, Flynn has violated Section 

15(a) of the Exchange Act [15 U.S.C. § 78o(a)]. 

14. Because of the Defendants’ unlawful conduct, the Commission respectfully 

requests that the Court: (i) permanently enjoin each Defendant from further violations of the 

foregoing securities laws, (ii) order each Defendant to disgorge the unlawful profits from their 

violations with prejudgment interest, (iii) impose civil money penalties on each Defendant, and 

(iv) impose such other and further relief as the Court may deem just and appropriate. 

JURISDICTION AND VENUE 

15. The Court has jurisdiction over this action pursuant to Section 20 of the Securities 

Act [15 U.S.C. §§ 77t(b)] and Sections 21A and 27 of the Exchange Act [15 U.S.C. §§ 78u-1, 

78aa]. Defendants, directly or indirectly, singly or in concert with others, made use of the means 

or instruments of transportation and communication in interstate commerce, or of the mails, in 

connection with the acts, transactions, and practices alleged in this Complaint. 

16. Venue is proper in this district under Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa] because, among 

other things, Defendant Marchitto resides in this district, and Defendants Vuuzle and Flynn have 

targeted, communicated with, and raised money from investors that reside in this district. 

DEFENDANTS 

17. Vuuzle Media Corp. is a Delaware corporation formed on August 22, 2017 as a 

successor entity to Boink Live Streaming LLC, which was incorporated in Delaware on 

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Case 2:21-cv-01226 Document 1 Filed 01/27/21 Page 6 of 36 PageID: 6 

September 16, 2016.  (A separate corporation called Boink Live Streaming Corp. was also 

incorporated in Delaware on August 22, 2017 and, until October 26, 2018, when the name was 

officially changed to Vuuzle Media Corp., company documents referred to the entity 

interchangeably as Boink Live Streaming, Boink Live Streaming Corp., and Boink Live 

Streaming LLC.) Vuuzle markets itself as a provider of online live streaming and entertainment 

services. Vuuzle has claimed at various times to have offices around the world, including in 

New York City, Las Vegas, and Scottsdale, as well as the Philippines, United Arab Emirates, and 

United Kingdom.  Vuuzle was founded by Flynn, who controlled Vuuzle’s operations at all times 

during the relevant period. 

18. Vuuzle has never registered any of its securities with the Commission.  Vuuzle 

filed a Form D Notice of Exempt Offering of Securities on September 26, 2017 (in the name of 

Boink Live Streaming Corp.), and an amendment on February 15, 2019 (in the name of Vuuzle 

Media Corp.), claiming an exemption from registration under Securities Act Rule 506(b).   

19. Ronald Shane Flynn (a/k/a Ronnie Shane), age 56, is a United States citizen, 

resident of the Philippines and/or the United Arab Emirates, and the founder of Vuuzle.  While 

Flynn currently holds no official title at Vuuzle, he is Vuuzle’s majority shareholder and 

exercises ultimate control over all aspects of Vuuzle’s business, including its operations, online 

presence, communications with investors, and company finances.   

20. Flynn has been subject to at least two state cease-and-desist orders in connection 

with his prior solicitations of investors: one dated October 4, 2000 by the Ohio Division of 

Securities; and a second dated September 22, 2016 by the State of California Department of 

Business Oversight.  Flynn was a registered representative of a registered broker-dealer from 

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November 1988 to March 1989, but he is not currently registered with the Commission in any 

capacity. 

21. Richard Marchitto, age 72, is a retired dentist residing in Rockaway, New 

Jersey. Marchitto has held various titles at Vuuzle, including “VP Marketing” and “board 

director.” He acts on behalf of Vuuzle at Flynn’s direction.  For example, at Flynn’s direction, 

Marchitto established the original Vuuzle entity (Boink Live Streaming LLC) on September 28, 

2016 and was its initial member.  Also at Flynn’s direction, Marchitto opened Vuuzle’s primary 

U.S. bank account (initially using his home address) – which Defendants used to receive and 

transfer investor assets – and provided Flynn with electronic access to that account while 

Marchitto remained the sole signatory.  In addition, Marchitto opened credit card accounts in the 

names of his former dental practice and various Vuuzle entities and granted Flynn the use of 

those cards. Marchitto has never been registered with the Commission in any capacity. 

FACTS 

I. Vuuzle’s Purported Business 

22. Vuuzle and Flynn convinced investors to buy Vuuzle securities by presenting 

Vuuzle as a legitimate, successful, and growing provider of online live streaming and 

entertainment services.  Investors were inundated with communications drafted and sent by 

Flynn, directly or through his marketing teams, that used hyperbole to describe Vuuzle, its 

products, and the online entertainment industry as whole.   

23. Vuuzle, Flynn, and his subordinates told investors that Vuuzle would use their 

funds to grow and operate Vuuzle’s business.  But instead, Flynn misappropriated the vast 

majority of what Vuuzle received.  Of the $14 million investors gave Defendants, only 

approximately $2 million was used to operate Vuuzle – just enough to build and maintain 

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superficial versions of the online streaming applications from which Vuuzle was purportedly 

going to earn revenue. These purported products were mere props Flynn used to raise additional 

investor funds. 

24. Beginning in September 2016, Vuuzle and Flynn told investors that Vuuzle was 

in the process of building a mobile phone application called “Bonk.live” (later called 

“Bonk.be.live”) through which the company would provide a platform for performers who 

wanted to livestream their talent to an audience.  Flynn, Vuuzle, and Flynn’s marketing teams 

provided investors with revenue projections showing millions and, in some instances, even 

billions of dollars in expected company earnings.  For example, in a September 11, 2016 email to 

investors, Flynn claimed that “BONK LIVE HAS 6 UNIQUE INCOME STREAMS” and 

depicted math equations purportedly reflecting revenues from each income stream ranging from 

$50,457,600 per year to more than $21 billion per year. 

25. On October 30, 2016, Flynn sent an another email to investors attaching a “press 

announcement” in which he described Bonk.live as “the newest streaming super app in the 

world” which was “nothing less than genius as it allows digital publishers, advertisers, and the 

live social streamers to make enormous money.”  In this press announcement, Flynn claimed that 

the “advertising carousel” on Bonk.live “will earn the company more th[a]n 50 million United 

States Dollars per year” and that advertising during an influencer’s live stream could result in 

another “$350,000,000 Million” to “1 billion USD to 3 billion USD Dollars per year.” 

26. Vuuzle and Flynn told investors that Bonk.live users would be able to purchase 

virtual gift packages that they could send to live streamers they liked.  In that same October 30, 

2016 announcement, Flynn told investors that “Bonk potential earnings with only 100 million 

users buying one package of $128.95 per year is more than 12 billion [dollars] per year.”  

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Case 2:21-cv-01226 Document 1 Filed 01/27/21 Page 9 of 36 PageID: 9 

Performers that received enough virtual gifts were supposed to be able to cash out the value of 

those gifts through debit cards. Indeed, Flynn sent investors photos of what appeared to be 

Bonk-branded debit cards. Yet, Vuuzle never actually created or distributed any such cards.  

27. Despite these promises to investors, Bonk.live never made millions of dollars, or 

really any money at all. Using outside vendors to build the platform, Flynn directed just enough 

money to create an application with the minimum functionality necessary for downloading on a 

mobile device. Flynn then used the existence of the app as proof of Vuuzle’s legitimacy, by, for 

example, sending investors images of the Bonk.live application downloaded to his own phone.   

28. Vuuzle’s revenue projections assumed that there would be millions of Bonk.live 

users. In fact, however, there were not. From May 25 through November 15, 2018, the average 

daily number of devices using the Bonk.live app was 371.  Flynn knew the actual number of 

users because he received weekly emails containing updated charts of Bonk.live user data.  

29. Moreover, Flynn knew that there never could be millions of users.  In an email 

dated September 27, 2018, a Vuuzle adviser told Flynn that his first discussion about the 

Bonk.live application was “terrifying” because he “just found out how weak and undeveloped 

this whole initiative is right now.”  In particular, the adviser emphasized that he had just learned 

that the software could only handle 40,000 users with “a full system crash imminent at 50,000+.”  

Flynn responded that he already knew the app’s limitations, stating: “[t]he question about users 

is not a new question as it was addressed months ago.” 

30. In approximately November 2018, Vuuzle began to shift its focus away from the 

Bonk.live app. Flynn, directly and through his marketing teams, told investors that Vuuzle was 

moving its business toward online streaming of television shows, through a mobile application it 

later called “Vuuzle TV.” Flynn drafted and sent to investors, directly and through his marketing 

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teams, multiple emails raving about Vuuzle TV, its capabilities, and its potential.  According to 

this marketing material, Vuuzle TV was going to offer free as well as paid versions of its app and 

would earn money through subscription fees and advertising.  Investors were told that online 

streaming was going to be the next revolution in entertainment and that Vuuzle investors would 

earn “gargantuan return[s].” 

31. For example, on April 13, 2019, Flynn sent an email to investors with an attached 

document titled, “Vuuzle TV’s Ten Million Dollar Investment Is Set To Win OTT subscribers 

while eliminating the competition.”  Flynn encouraged investors to “cash out of those mediocre 

investments and finally make a sizeable investment in Vuuzle Media and get paid for being in 

the right place at the right time with an investment that will win you BIG money!!!!!!!” 

32. Flynn’s statement that “ten million dollar[s]” was invested into building Vuuzle 

TV was false. As described above, Flynn directed just enough money toward the business to 

build a mobile application that users could download and view some television shows.  Once the 

app was available, Flynn sent investors, directly and through his marketing teams, links to the 

Vuuzle.TV site along with images of Vuuzle.TV on his phone.   

33. And, contrary to the promises of “BIG money,” Vuuzle TV has not resulted in the 

promised revenues.  From its inception in October 2016 through May 2020, Vuuzle’s U.S. bank 

account reflects total business revenue of less than $1,670.  In its entire four years of operation, 

through all the various mobile products Vuuzle and Flynn have hyped, Vuuzle has never made a 

profit. 

10 

https://Vuuzle.TV
https://Vuuzle.TV


 

 

 

 

 

 

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II. Vuuzle was a Front for Flynn’s Boiler Room 

34. Rather than the legitimate, successful business touted to investors, Vuuzle was 

simply a front for a boiler room, the sole purpose of which was to bring investor funds to Vuuzle 

to be spent by Flynn and at Flynn’s direction. 

35. Operating primarily out of the Philippines, Flynn directed marketing teams 

headed by four to six “Investment Representatives” (“IRs”) who were mostly close associates of 

Flynn or members of his family.  The marketing teams operated, at varying times, through four 

companies under Flynn’s control: WorldCom Online Marketing, Inc.; Bonk Marketing Trade 

and Promotion, Inc.; iMagically LLC; and Vuuzle Media Corp Fze LLC.   

36. Together, Flynn and the marketing teams engaged in coordinated and aggressive 

sales campaigns to convince investors to buy Vuuzle securities.  These sales campaigns involved 

repeated, high-pressure sales calls.  Flynn and his marketing teams also inundated current and 

potential investors with emailed marketing materials – sometimes several in a single day – 

relating to the business of Vuuzle, its products, and the industry as a whole. 

37. Vuuzle and Flynn identified potential investors by purchasing “lead lists” of 

purportedly accredited investors from several independent sellers, for anywhere from $1,000 to 

$5,000 per list. In addition to names and contact information, certain lists also included 

information such as the types of investments the investor was interested in and, sometimes, 

descriptions of the investors themselves.  For instance, one lead list received by Flynn on June 5, 

2019, included additional, often profane, descriptors next to certain names such as “dumbass,” 

“old,” or “stroke.” 

38. After receiving the lists, Flynn had his marketing teams “wash” them for 

duplicate names from prior lead lists and then directed them to cold-call the remaining entries.  

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Flynn provided his marketing teams with initial “sales pitch” scripts for them to use in their calls 

with potential investors.   

39. In most cases, Flynn’s scripts directed comparisons of Vuuzle to Facebook, 

Twitter, and Google, highlighting the billions of dollars made by Facebook shareholders from 

the Facebook IPO.  In at least one instance, aware of the misrepresentations typically made to 

investors, Flynn instead recommended that a particular investor be pitched “super clean.”  In a 

July 19, 2018 email, Flynn directed an IR to call an acquaintance of the then-CEO of Vuuzle.  

Specifically, Flynn instructed the IR to “just pitch clean because he will tell [the CEO] 

everything and I don’t want him to scare [the CEO] into thinking we are selling dirty.”  

Notwithstanding Flynn’s efforts, Vuuzle’s CEO resigned a few months after Flynn’s July 2018 

email. 

40. Flynn controlled nearly every aspect of the sales campaigns.  He directed the sales 

pitches, created marketing material sent to investors via email, oversaw Vuuzle’s online 

presence, controlled the content posted to Vuuzle’s websites, followed up directly with each 

investor by phone to address any concerns, if necessary, and often “closed” the investment deal.   

41. In addition to the IRs and marketing representatives, Flynn retained a staff of 

secretaries, IT support specialists, content writers, and finance employees who reported solely to 

him and who helped him solicit investor funds.  Flynn required each group of employees to 

provide him with periodic reports of their “accomplishments.”  These reports make clear that 

selling Vuuzle securities – not building a legitimate business – consumed the overwhelming 

majority of Flynn’s and his employees’ time and energy. 

42. For example, at any given time, Flynn retained anywhere from four to thirteen 

secretaries to contact existing and potential investors (who they referred to as “clients”) and to 

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maintain meticulous records of their efforts to procure additional investor funds.  To control the 

messaging to investors, Flynn required his secretaries to send him written investor 

communications for his approval before they were sent to investors.  In addition, Flynn arranged 

for his secretaries to receive trainings in dealing with investors.  As part of these trainings, Flynn 

was provided reports on each secretary’s skills in “pitch[ing] a customer,” including evaluations 

of their English pronunciation and their ability to recite “rebuttals” to standard investor concerns. 

43. On a daily basis, each secretary provided Flynn with a report of her 

“accomplishments.”  These reports included detailed information about which investors the 

secretary had contacted, when the communications occurred, what was said, how much the 

investor planned to invest, and what next steps were necessary to close the investment deal.  

Periodically, secretaries also sent group reports to Flynn, titled “Incoming Done Deals,” which 

were consolidated lists of investors who had committed funds that Flynn could expect to receive 

shortly. 

44. Similarly, Flynn received daily reports from his “IT Department.”  These reports 

reflected virtually no activity relating to the production or maintenance of the Bonk.live or 

Vuuzle TV applications, the ostensible focus of Vuuzle’s business.  Instead, his IT employees 

primarily reported providing computer and tech support to Flynn and his marketing teams, 

“washing” lead lists, creating Skype and email accounts for new marketing representatives, and 

double-checking investor calls reported by Flynn’s secretaries. 

45. In addition, Flynn received “Treasury Department” reports, which had nothing to 

do with business revenue or Vuuzle’s books and records.  Instead, these reports detail finance 

employees’ efforts to track investments made into Vuuzle, issuing share certificates and warrant 

agreements, and maintaining the Vuuzle shareholder records. 

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46. Marketing team meeting notes similarly reflected the pressure to make investor 

sales within the boiler room.  For instance, in a meeting that took place on May 25, 2019, one IR 

told his marketing representatives that he needed potential investors to be “fully pitched and not 

half-pitched,” and that marketing representatives should “do whatever it takes every day to 

produce” investor sales.  As the IR reminded his marketing team, their focus should always be on 

the money: “[y]ou have good opportunities to make good cash right here and right now if you 

stay focus[ed] and do what needs to be done every day.” 

47. As compensation for recruiting investors, Vuuzle and Flynn paid commissions to 

Flynn, his IRs, and other boiler room staff based upon their respective roles.  To receive 

payment, the IR was required to submit a request or invoice to Flynn for his approval.  No one 

got paid unless Flynn approved it. 

48. Accordingly, detailed spreadsheets were emailed to Flynn by his IRs, which 

calculated each investor’s “done deal” investment amount, the initials of the boiler room staff 

person credited with “opening” and/or “closing” the deal, and the percentage commission earned.  

According to these charts, Flynn and his IRs received commissions from 8% to 15% of investor 

funds, while lower level marketing reps were paid commissions of up to 2.5% of investor funds.   

III. Vuuzle and Flynn Misused $10 Million in Investor Funds 

49. Vuuzle and Flynn falsely represented to investors, directly and through the 

marketing teams, that Vuuzle was a legitimate business and that it would use investor funds to 

grow and operate the company. 

50. For example, a 2017 PPM that was provided to investors describes the use of 

investor proceeds as follows: 

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51. In this chart and other similar statements, Flynn, Vuuzle, and their marketing 

team represented that Vuuzle would use more than 99% of investor funds for building, 

marketing, and selling Vuuzle’s online products.  They also claimed that only 0.5% of investor 

funds would be used in connection with offering securities.  Similarly, in an email dated April 

20, 2020, Flynn told an investor that “the corporation is using its funds to grow the platform.” 

52. Vuuzle made similarly false statements in two Forms D filed with the 

Commission in 2017 and 2019.   

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53. Both Forms D contained identical responses that specifically represented that 

Vuuzle had paid $0 in sales commissions and $0 in finders’ fees in connection with the offering 

of Vuuzle securities. 

54. As Flynn knew, these statements were false.  Of the $14 million invested in 

Vuuzle, only approximately $2 million was ultimately used for the costs of building and 

maintaining Vuuzle’s online products.  Flynn diverted more than $10 million for his personal 

use and benefit and to support his boiler room operations, including paying commissions to 

himself and others. 

A. Flynn Personally Misappropriated $5 million of Investor Funds 

55. Flynn diverted a total of nearly $5 million of investor proceeds from Vuuzle’s 

primary U.S. bank account for his own benefit.  Specifically, from November 21, 2016 to August 

22, 2019, Flynn transferred (or directed Marchitto to transfer) more than $2.6 million in investor 

funds from Vuuzle’s U.S. bank account to Flynn’s personal bank accounts in Singapore and the 

United Arab Emirates.  In addition, Flynn used investor funds to pay more than $2.3 million in 

expenses that he incurred using corporate credit and debit cards.   

56. The overwhelming majority of the $2.3 million in expenses were personal.  They 

included, for instance, nearly $1 million in purchases at jewelry stores in Singapore, Dubai, and 

the Philippines. Receipts from the Dubai jewelry store reflect that some of Flynn’s purchases 

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were for 24 Karat gold bars. Flynn also racked up more than $500,000 in credit card charges for 

his travel and entertainment, including international business class flights, luxury hotels, strip 

clubs, and restaurants. Flynn also used the Vuuzle debit card connected to the primary U.S. bank 

account that received investor funds to spend another more than $25,000 on clearly personal 

items, such as online dating and gambling applications.  Investors unwittingly paid for it all.   

B. Vuuzle Paid Undisclosed Commissions to Flynn and Others 

57. In addition to $5 million misappropriated for Flynn’s personal use, Vuuzle and 

Flynn diverted another approximately $5.5 million in investor funds to sustain Flynn’s boiler 

room operations, including paying undisclosed commissions to himself and his marketing staff.   

58. Flynn engaged in efforts to conceal the nature of these payments.  From 

November 22, 2016 through May 28, 2020, Flynn transferred (or directed Marchitto to transfer) 

a total of $5.1 million from Vuuzle’s primary U.S. bank account to overseas accounts in the 

names of entities under Flynn’s control, including more than $2.2 million to his company, 

iMagically. 

59. Flynn attempted to legitimize some of these payments by directing iMagically to 

send Vuuzle invoices for “consulting fees.”  However, these invoices clearly reflect 

commissions, as they contain investor names, along with the amounts invested, and a description 

of the charges that said “40% Fees, Consulting, meetings, phone, time, FedEx, Credit charges & 

secretarial.”  The bottom of each invoice had a note stating “[i]f you have any questions about 

this invoice please contact Ronnie Shane Flynn” and providing Flynn’s phone and email address. 

60. Once the funds arrived in the overseas accounts, Flynn directed them to be 

disbursed to himself and his marketing staff, mostly in the form of commissions.  For example, 

on April 9, 2019, Flynn sent his treasury staff an email with the subject line, “10k sent to 

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magically” and a message saying, “SENT YOU TEN THOUSAND, GET JOSHUA PAID…”  

Similarly, on August 24, 2019, Flynn sent his staff an email that stated “I have sent off an 

additional 5 k that can be used for the commission this week coming up.” 

61. Flynn directed an additional $400,000 of investor funds from Vuuzle’s U.S. bank 

account to accounts controlled by independent stock promoters that recruited investors to 

Vuuzle. Emails reflect that these stock promoters were also paid commissions based on the 

amounts invested by their investor recruits. 

IV. Other Material Misrepresentations to Investors 

62. To induce investors to purchase Vuuzle securities, Vuuzle and Flynn made 

additional materially false and misleading statements, including that Vuuzle intended to proceed 

with an IPO, pay investors dividends, and that Vuuzle was operated by a team of independent 

executive officers. 

A. False Promises of an Initial Public Offering 

63. From the beginning, Flynn and his marketing teams falsely presented Vuuzle 

(initially called “Boink Live”) as a pre-IPO investment opportunity.  For example, a December 

15, 2016 email sent to investors and potential investors stated, in part: 

This is your Opportunity to finally win big!  You missed out on 
FACEBOOK, you missed out on TWITTER and GOOGLE, you 
didn’t have an opportunity to be considered for SNAPCHAT. 

Now you have a chance to get involved with the #1 social platform 
for broadcasting, advertising and watching live streaming 
videos…. Facebook founder Mark Zuckerberg earned 19.1 Billion 
United States Dollars after just 30 seconds in the stock market!!!! 

… BONK LIVE is like mixing up FACEBOOK, GOOGLE, 
TWITTER, and SNAPCHAT and injecting it with an overdose of 
steroids! 

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64. Another email sent on the same day to many of the same investors and potential 

investors emphasized the supposed urgency of investing immediately, stating: 

The opportunity is now and it won’t last forever, or even a few 
more months. Investment is secured and once the 250 investors 
required to go public has been reached, Bonk Live will be the next 
big stock people wish they didn’t pass down no matter how much 
money they didn’t have at the time.  Beg, Borrow, Steal or make 
more excuses… 

65. Flynn and his marketing teams were even more explicit in phone conversations, 

telling investors and potential investors that they could expect Vuuzle’s stock price to increase to 

up to $25 to $30 a share or more after the promised IPO.  However, notwithstanding claims that 

the investment opportunity would not last “a few more months,” Vuuzle did not go public.   

66. The inevitable lack of an IPO – Vuuzle was, after all, little more than a boiler 

room front – did not deter Flynn, Vuuzle, and the marketing teams from continuing to lure 

investors with promises that an IPO would eventually occur.  For example, on August 19, 2019, 

investors received an email stating that “[w]e are very close to making the announcement that the 

company will be going public.”  The email claimed that Vuuzle had hired a “federally regulated 

trust company in Canada” as the company’s transfer agent.  Investors were advised that 

“[e]veryone must talk with Ronnie Flynn who will be gathering information” to provide to the 

transfer agent. 

67. These representations were false and misleading, and Flynn knew it.  As of 

August 2019, Vuuzle had made no preparations to go public.  Despite having told investors that 

Vuuzle had hired a transfer agent, Flynn sent an email to a former Vuuzle CEO five days later 

denying that fact, stating “[w]hen we have a transfer agent, I will inform you. Until then, I am 

still building the company.”  That same day, Flynn, responding to the former CEO’s questions 

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about Vuuzle’s plans to go public, stated, “[i]f there was anything to tell you I would … [r]ight 

now the company is negative and owes lots of money.” 

68. In May 2020, Vuuzle and Flynn sent investors yet another email announcing 

plans for an IPO. This time, they claimed that a group of Swedish investors had paid $50 million 

to acquire 10% of Vuuzle. Vuuzle and Flynn represented that these purported investors would 

form a Swedish corporation, called Vuuzle Media Sweden AB, which they intended to publicly 

list on the Nasdaq Stockholm.  Since May, Flynn and Vuuzle have continued to send investors 

emails reinforcing the idea that Vuuzle is about to be listed in Sweden.   

69. Vuuzle and Flynn have used the purported upcoming Swedish IPO to pressure 

some investors to exercise their warrant options – thereby sending even more money to Vuuzle.  

Yet there is no evidence that Vuuzle is preparing to go public in Sweden.  Moreover, the Nasdaq 

Stockholm has certain listing criteria – including a documented history of profitability – which 

Vuuzle cannot possibly meet because, as Flynn knows, it has never made a profit. 

B. False Promises of Dividends 

70. To induce individuals to invest, Vuuzle and Flynn also promised that Vuuzle 

would pay shareholders dividends.   

71. Vuuzle, Flynn, and the marketing teams, however, apparently gave different 

investors and potential investors different information about the dividends.  Some earlier 

investors were told to expect dividend payments within a few months of their investments.  For 

instance, one email sent to investors and potential investors on December 5, 2016 stated that, 

“[t]he first projected dividend is for the end of February amounting to around $2.50 per share per 

quarter on the low side to $10 per share on the high side,” based on expected revenues of 

$50,000,000 in the first quarter of 2017. 

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72. Another investor received an emailed memorandum from the purported 

“CEO/President” of Vuuzle dated July 26, 2017, which represented in relevant part that “[a]s a 

result of the stream of revenue, the company intends to pay its first quarterly dividend on or 

about Oct. 19, 2017 with additional quarterly dividends on or about every 90 days thereafter …” 

73. According to the July 26, 2017 memo, “[a]t the time the company goes public, the 

dividend will cease or be re-evaluated.”  In contrast, other investors were told they would not 

receive dividends until Vuuzle was publicly listed.   

74. In any event, no dividends were ever paid, and no dividends were ever going to be 

paid because, as Flynn knew, Vuuzle was not a legitimate business.  Vuuzle had little to no 

revenue from operations, and investor funds mostly lined Flynn’s pockets. 

C. Flynn Concealed his Interest and Control from Investors 

75. Flynn exercised ultimate control over every part of Vuuzle’s business for the 

nearly exclusive purpose of enriching himself.  No one was paid without Flynn’s approval – 

from the purported President and CEO, to the technical vendors, to the lead list providers, to his 

own marketing representatives.  Flynn controlled who was hired and fired, what material was 

posted to Vuuzle’s online websites, what was said to investors and prospective investors, how 

and when share certificates were issued, and how investor funds were spent. 

76. Yet Vuuzle and Flynn falsely represented to investors and the public that Vuuzle 

was a legitimate business operated by a team of independent executive officers.  Flynn presented 

himself as merely the founder and a major shareholder of the company, with no actual control 

over Vuuzle’s operations. 

77. For instance, Vuuzle’s 2017 PPM only mentioned Flynn as the “non-voting 

beneficial owner” of iMagically LLC, which was described as the majority shareholder of 

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Vuuzle, holding 80 million shares.  According to the PPM, Josh Flynn (Flynn’s adult son) was 

the “manager” of iMagically, and he was, supposedly, “free to vote his shares without 

consequence from the Non-Voting Member” (Flynn).   

78. This statement was false.  Flynn himself was Vuuzle’s majority shareholder, and 

the 80 million shares were issued in his name.  iMagically was nothing more than a corporate 

name used for Flynn’s boiler room, where Flynn was everyone’s “boss,”, including his son Josh.   

79. Indeed, Josh Flynn had to request his father’s approval even to get paid.  And on 

those occasions when Flynn determined that Josh Flynn (along with other boiler room 

employees) had not met his employment obligations, Flynn would discipline him by taking away 

some of his commissions for the relevant period.   

80. For example, on July 19, 2019, Flynn directed a treasury department employee to 

send a notice to a group of four IRs, including his son, Josh Flynn, which stated: 

Despite all of the reminders and warnings by the Founder, still it 
has been observed that you are not reporting to work daily and if 
it’s not late, early our or worse is absent. 

International Representatives should be on top of their Marketing 
Sales to drive cash, as you know that the Founder is paying all the 
bills and expense of the Company… 

For this reason, the Founder will be deducting certain amount 
from your commission for the following violation: 

a. Absent for 1 day ---------------------------$200.00 Deduction 
b. Late for the day or early out-------------$100.00 Deduction 

81. When investors asked Flynn questions about Vuuzle, such as why dividends had 

not been paid or why the company has not progressed to an IPO as promised, Flynn claimed he 

was not in control. For instance, on April 12, 2019, an investor emailed Flynn stating, “you 

should remember what you put me through on this thing when you told me over and over again 

22 

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that this comp[a]ny would go public and I would have my money in time to pay my taxes.”  In 

response, Flynn stated “I am a shareholder in the company like you are.”  He then directed the 

investor to speak with an IR for additional information. 

82. In that same email, the investor asked Flynn to return $10,000 because “I relied 

on what you told me and now I am really in a pickle.”  Flynn responded by claiming he did not 

have the money to give the investor; yet, less than two weeks later, Flynn found $13,000 to pay 

commissions to his boiler room staff.  In an email dated April 23, 2019, Flynn forwarded a wire 

transfer notice of $13,000 from Vuuzle’s U.S. bank account to iMagically, directing his staff to 

“get Joshua his commission asap…money sent!!!!!!!!” 

83. Vuuzle concealed from investors Flynn’s financial relationship with the company, 

including the transfers of funds between Vuuzle and Flynn’s overseas entities such as 

iMagically. In fact, the PPM included a section that expressly denied the existence of any related 

party transactions: 

Certain Relationships and Related Transactions 
We have not entered into any material transactions with any 
director, executive officer, promoter, security holder who is a 
beneficial owner of 5% or more of our common stock, or any 
immediate family member of such persons. 

84. This statement was obviously false.  As discussed above, Vuuzle paid Flynn and 

his companies approximately $5 million for recruiting investors, including more than $2.2 

million transferred to an overseas account held in the name of Flynn’s company, iMagically. 

85. While Vuuzle’s PPM misrepresented the nature of Flynn’s role, Vuuzle’s Forms 

D, filed with the Commission in 2017 and 2019, did not even name Flynn as an individual 

related to Vuuzle.   

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86. The regulations for such Forms D required Vuuzle to provide: (1) a list of related 

persons, defined to include “[e]ach executive officer and director of the issuer and person 

performing similar functions”; (2) the name and address of each person who was to be or will be 

paid commissions or other consideration in connection with the sales of securities in the offering; 

(3) the amount of sales commissions paid or estimated to be paid; and (4) the “amount of gross 

proceeds of the offering that has been paid or is proposed to be used for payments to any of the 

persons required to be named as executive officers, directors or promotors” of the issuer.    

87. Accordingly, Vuuzle was required to identify Flynn on the Forms D as both the 

person “functionally” in control of Vuuzle and as a promoter of Vuuzle securities who was paid 

commissions.  Instead, the Forms D listed as related parties, individuals that, in reality, were 

hired by Flynn, reported to Flynn, and relied on Flynn to be paid. 

V. Marchitto Aided and Abetted Vuuzle and Flynn in Defrauding Investors 

88. Vuuzle and Flynn were aided and abetted in their fraud by Marchitto, a former 

dentist who claims to have lost money investing in one of Flynn’s previous business ventures.  

Marchitto has been involved with Vuuzle from the beginning.  Over time, Marchitto has held 

various titles with Vuuzle. For instance, in Vuuzle’s 2017 PPM, Marchitto was described as the 

“VP Marketing.” Sometime in 2019, Marchitto was named a Vuuzle director and identified 

himself as such on Vuuzle’s 2019 Form D amendment filed with the Commission.  In 

communications with third parties, Flynn and Marchitto often referred to each other as business 

“partners.” 

A. Marchitto Provided Substantial Assistance to Vuuzle and Flynn 

89. At Flynn’s direction, Marchitto provided substantial assistance to Vuuzle and 

Flynn, including by establishing a U.S. corporate and financial presence for Vuuzle, collecting 

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and depositing investor checks to Vuuzle’s U.S. bank account, and facilitating Flynn’s misuse of 

investor funds. 

90. Because Flynn was unwilling to travel to the United States, Marchitto’s acts were 

essential to the success of Vuuzle’s and Flynn’s fraud.  Without Marchitto’s assistance, Flynn 

would not have been able to portray Vuuzle as a U.S. company, a claim several investors have 

identified as a significant factor in their decision to invest in Vuuzle.  

91. From at least September 9, 2016 – before the first Boink entity was organized in 

the United States – through November 23, 2016, Marchitto accepted Vuuzle investor funds into 

the account of another Flynn-controlled entity, called E Diamond Trade LLC, for which 

Marchitto was the signatory.  In total, more than $175,000 of Vuuzle investments were deposited 

to the E Diamond account via both wire-transfer and checks that were clearly marked for 

investment.  Of these funds, only $1,000 ever ended up in Vuuzle’s primary U.S. Bank account, 

while Marchitto used more than $95,000 to pay Flynn’s credit card bills.  He sent another 

$55,000 directly to Flynn’s personal bank account in Singapore. 

92. On September 16, 2016, Marchitto also organized Vuuzle’s first predecessor 

entity, Boink Live Streaming LLC (“Boink LLC”), in Delaware, using Marchitto’s home address 

in Rockaway, New Jersey, as the entity’s corporate address.  On September 23, 2016, Marchitto 

successfully obtained a tax identification number for Boink LLC from the Internal Revenue 

Service. And, on September 28, 2016, Marchitto had himself designated the “Initial Member” of 

the Boink LLC.   

93. In addition to forming Boink LLC, Marchitto also facilitated the incorporation of 

Boink Live Streaming Corp. (“Boink Corp.”).  On August 23, 2017, Marchitto wrote a letter to 

the Delaware Secretary of State, Division of Corporations, wherein he identified himself as the 

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“organizer of ‘Boink Live Streaming LLC’” and expressly authorized the incorporation of Boink 

Corp. 

94. On October 11, 2016, Marchitto opened Vuuzle’s primary bank account at a large 

New York City-based bank. The account was initially opened in the name of Boink LLC and 

later changed to Vuuzle Media Corp. This was Vuuzle’s primary U.S. bank account, and it was 

used to receive the overwhelming majority of investor funds.  Although account records listed 

Marchitto as the sole signatory at all times, Marchitto gave Flynn electronic access to the 

account, including the ability to execute transactions in the account.  In addition, Marchitto 

arranged for the bank to send wire transfer confirmations directly to Flynn’s email address.   

95. Flynn and Vuuzle directed Vuuzle investors to send their funds to this U.S. bank 

account, and Marchitto (at Flynn’s direction) and Flynn transferred the overwhelming majority 

of these proceeds to overseas accounts in the name of Flynn or entities Flynn controlled.  

Marchitto monitored the U.S. account and provided Flynn or his boiler room staff with updates 

when investor funds were deposited into the account.  Periodically, Marchitto printed copies of 

bank account statements and sent them via facsimile to Flynn’s office in the Philippines. 

96. In addition to providing a U.S. bank account for Vuuzle, Marchitto also facilitated 

the process of obtaining and maintaining a U.S. address for Vuuzle.  By his actions, Marchitto 

created the appearance that Vuuzle had a substantial physical corporate presence in New York.  

Many investors, reassured that Vuuzle was a U.S.-based company, mailed their investment 

checks and subscription documentation to this New York address. 

97. In the beginning, Marchitto used his own residential address in New Jersey on 

Vuuzle documents.  At some point, Marchitto began using the address of his former Manhattan 

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dental practice located at “42 Broadway, 1536, New York, New York.”  This address even 

appeared on early versions of the 2017 PPM. 

98. Beginning in 2017, Vuuzle began using a virtual office address located at “42 

Broadway, Suite 12-117, New York, New York” – again, the same building where Marchitto’s 

former dental practice was located.  Marchitto signed the checks issued from Vuuzle’s U.S. bank 

account to pay the monthly rent on this address. 

99. Vuuzle and Flynn identified the Manhattan location as Vuuzle’s primary place of 

business on several documents, including the Forms D filed with Commission, and in email 

communications with investors. When investors sent mail to this New York address – including 

subscription documentation and investment checks – Marchitto was responsible for picking up 

the mail, forwarding relevant communications on to Flynn, and depositing any investor checks 

into Vuuzle’s U.S. bank account. 

B. Marchitto Knew or Was Reckless in Not Knowing that Vuuzle and Flynn 
Misused Investor Funds 

100. Marchitto knew or was reckless in not knowing that Vuuzle and Flynn were 

engaged in fraudulent conduct; he had information that (1) Vuuzle’s U.S. bank account was 

almost entirely funded by investors and (2) that a significant amount of those investor funds were 

spent by Flynn or sent to his personal bank accounts.  Moreover, Marchitto ignored early 

communications from at least one investor expressing concerns about Vuuzle, and he thereafter 

continued to provide assistance to Vuuzle and Flynn. 

101. Again, Marchitto was the sole signatory and had direct access and control over the 

U.S. bank account, which received nearly $14 million in investor funds.  Account statements 

reflecting these investments were first sent directly to Marchitto’s residence and later to the 

Manhattan address that Marchitto monitored.  

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102. Investor deposits to Vuuzle’s U.S. bank account came in the form of wire 

transfers or checks, primarily from individuals or retirement accounts in large, round dollar 

increments.  In many instances, investors clearly marked the wire or check as being for the 

purchase of Vuuzle securities. For example, on July 30, 2019, Marchitto sent an email to Flynn 

with an attached photo of three checks totaling $41,500, each of which clearly notes in the memo 

line, “stocks” or “shares.”  

103. On July 31, 2017, an investor contacted Marchitto about his investment, noting 

that he had received inconsistent information from Vuuzle about dividends and revenues.  That 

investor explicitly warned Marchitto to “[j]ust be aware and make your own decisions consistent 

with fact.” 

104. On September 4, 2017, that same investor emailed Marchitto again, this time with 

a series of questions, noting that “[i]t seems that the primary income …was from the sale of 

stock.” Marchitto responded by saying “I have no knowledge to answer[] the questions u 

presented.” Yet, at that time, Marchitto had direct access to Vuuzle’s primary bank account, 

which contained numerous entries that plainly identified deposits as investments.  Consequently, 

when responding, Marchitto either chose not to look into the source of Vuuzle’s income, or he 

examined the statements and lied.  Nonetheless, Marchitto continued to assist Vuuzle and Flynn 

in their fraud. 

105. During this time, Marchitto also knew or was reckless in not knowing that Flynn 

had misappropriated nearly $5 million in investor funds.  Flynn and Marchitto (at the direction of 

Flynn) transferred nearly $2.6 million of investor funds from Vuuzle’s U.S. bank account to 

Flynn’s personal accounts overseas.  Marchitto knew these were Flynn’s personal accounts 

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because Flynn sent Marchitto the account information, which showed clearly that the accounts 

were in his name. 

106. Vuuzle’s U.S. bank account statements also reflected more than $25,000 in debit 

card charges by Flynn for expenses – such as dating websites, Netflix, and iTunes – that had no 

discernable business purpose. Apple receipts sent to Flynn confirm the personal nature of the 

iTunes purchases, the vast majority of which were for online gambling, dating, and video games. 

107. In addition, Marchitto opened credit card accounts in the name of his former 

dental practice, as well as in the names of Boink and Vuuzle, and granted Flynn use of these 

cards. Marchitto had access to these statements, too, because they were likewise sent directly to 

him at his New Jersey residence and, later, to Vuuzle’s New York City office.   

108. As described above, the credit card statements Marchitto received make clear that 

Flynn used these ostensibly corporate credit cards for his personal expenses, including luxury 

travel, jewelry store purchases, and strip clubs. Nonetheless, Marchitto used investor funds in 

Vuuzle’s U.S. bank account to pay off the balances on these credit cards. 

VI. Vuuzle’s Securities Offering Was Not Registered 

109. Despite raising over $14 million through the sale of stocks and warrants from 

2016 to at least May 2020, Vuuzle has never registered with the Commission any securities 

offering. On September 26, 2017, Vuuzle filed with the Commission a Form D Notice of 

Exempt Offering of Securities (under its previous name, Boink Live Streaming Corp.), which 

announced a $10,000,000 private offering of securities.  An amended Form D was filed on 

February 15, 2019. In these notices, Vuuzle claimed that its offering was exempt from 

registration under Rule 506(b) under the Securities Act.   

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110. In fact, however, Vuuzle did not qualify for any exemption for a “private 

offering” of securities because, it was conducting a general solicitation through the cold-calling 

of potential investors. 

111. Moreover, it does not appear that Vuuzle, Flynn, or his marketing teams made any 

independent effort to determine the accredited investor status, financial qualifications, or 

investment experience of Vuuzle investors, all of which is pertinent to the availability of the Rule 

506(b) exemption Vuuzle claimed.   

112. Vuuzle’s 2017 PPM stated that it was offering shares to “accredited and 

sophisticated investors only.”  The associated subscription documents contained a check-the-box 

certification for investors to indicate whether they were “accredited” or “sophisticated.” 

Although these completed subscription forms were sent to Flynn and his marketing teams for 

their review, many investors never checked either box on the subscription form.  Still, Flynn and 

Vuuzle took their money. 

113. According to a treasury department report sent to Flynn on August 2, 2019, one 

investor apparently told a Vuuzle employee that he was not accredited.  This information was 

provided to Flynn, who instructed that the investor be accepted anyway.  Four days later, Vuuzle 

accepted the investment and issued the investor Vuuzle shares. 

114. As a result, numerous unaccredited investors ended up investing in Vuuzle.  None 

of these investors ever received any revenue or earnings reports of any kind. 

FIRST CLAIM FOR RELIEF 
Violations of Section 10(b) of the Exchange Act 

and Rule 10b-5 Thereunder 
(Against Vuuzle and Flynn) 

115. The Commission realleges and incorporates by reference the allegations in 

paragraphs 1 through 114, as if they were fully set forth herein. 

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116. By engaging in the conduct described above, Vuuzle and Flynn, directly and 

indirectly, in connection with the purchase or sale of securities, and by use of the means or 

instrumentalities of interstate commerce, or the mails, has, with scienter: (a) employed devices, 

schemes or artifices to defraud; (b) made untrue statements of material facts or omitted to state 

material facts necessary in order to make the statements made, in light of the circumstances they 

were made, not misleading; and/or (c) engaged in acts, practices, or courses of business which 

operated or would operate as a fraud or deceit upon any person in connection with the purchase 

or sale of any security. 

117. By engaging in the foregoing misconduct, Vuuzle and Flynn have violated, and 

unless enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] 

and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].   

SECOND CLAIM FOR RELIEF 
Violation of Section 17(a) of the Securities Act 

(Against Vuuzle and Flynn) 

118. The Commission realleges and incorporates by reference the allegations in 

paragraphs 1 through 114, as if they were fully set forth herein. 

119. By engaging in the conduct described above, Vuuzle and Flynn, directly and 

indirectly, in the offer or sale of a security by the use of the means or instruments of 

transportation or communication in interstate commerce or by use of the mails, has, with 

scienter: (a) employed a device, scheme, or artifice to defraud; (b) obtained money or property 

by means of any untrue statement of a material fact or any omission of a material fact necessary 

in order to make the statements made, in light of the circumstances under which they were made, 

not misleading;  or (c) engaged in a transaction, practice, or course of business which operates or 

would operate as a fraud or deceit upon the purchaser. 

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120. By engaging in the foregoing misconduct, Vuuzle and Flynn have violated, and 

unless enjoined will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

THIRD CLAIM FOR RELIEF 
Aiding and Abetting Violations of Section 10(b) of the Exchange Act  

and Rule 10b-5 Thereunder 
(Against Marchitto) 

121. The Commission realleges and incorporates by reference the allegations in 

paragraphs 1 through 114, as if they were fully set forth herein. 

122. By engaging in the conduct alleged above, Defendant Marchitto knowingly or 

recklessly provided substantial assistance to Defendants Vuuzle and Flynn, who, with scienter, 

directly or indirectly, singly or in concert with others, in connection with the purchase or sale of 

a security, used the means or instrumentalities of interstate commerce or of the mails to employ 

devices, schemes, or artifices to defraud; and to engage in acts, practices, or courses of business 

which operated or would operate as a fraud or deceit upon others. 

123. By engaging in the foregoing misconduct, Defendant Marchitto aided and abetted, 

and unless enjoined will continue to aid and abet violations of Section 10(b) of the Exchange Act 

[15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

FOURTH CLAIM FOR RELIEF 
Aiding and Abetting Violations of Section 17(a) of the Securities Act 

(Against Marchitto) 

124. The Commission realleges and incorporates by reference the allegations in 

paragraphs 1 through 114, as if they were fully set forth herein. 

125. By engaging in the conduct alleged above, Defendant Marchitto knowingly or 

recklessly provided substantial assistance to Defendants Vuuzle and Flynn, who, with scienter, 

directly or indirectly, singly or in concert with others, in the offer or sale of a security, used the 

means or instruments of transportation or communication in interstate commerce or used the 

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mails to employ devices, schemes, or artifices to defraud, or engaged in transactions, practices, 

or courses of business which operated or would operate as a fraud or deceit upon a purchaser.  

126. By engaging in the foregoing misconduct, Defendant Marchitto aided and abetted, 

and unless enjoined will continue to aid and abet violations of Section 17(a) of the Securities Act 

[15 U.S.C. § 77q(a)]. 

FIFTH CLAIM FOR RELIEF 
Violation of Sections 5(a) and 5(c) of the Securities Act 

(Against Vuuzle and Flynn) 

127. The Commission realleges and incorporates by reference the allegations in 

paragraphs 1 through 114, as if they were fully set forth herein. 

128. By engaging in conduct alleged above, Defendants Vuuzle and Flynn, directly or 

indirectly, through use of the means or instruments of transportation or communication in 

interstate commerce, or of the mails, offered to sell or sold securities, or carried or caused such 

securities to be carried through the mails or in interstate commerce for the purpose of sale or for 

delivery after sale.  

129. No registration statement was filed with the Commission or was in effect with 

respect to the securities offered by Defendants Vuuzle and Flynn prior to the offer or sale of 

these securities. 

130. By engaging in the foregoing misconduct, Vuuzle and Flynn have violated, and 

unless enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. 

§§ 77e(a) and 77e(c)]. 

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SIXTH CLAIM FOR RELIEF 
Violation of Section 15(a)(1) of the Exchange Act 

(Against Flynn) 

131. The Commission realleges and incorporates by reference the allegations in 

paragraphs 1 through 114, as if they were fully set forth herein. 

132. By engaging in the in conduct alleged above, Defendant Flynn, by the use of 

means or instrumentalities of interstate commerce or of the mails, has engaged in the business of 

effectuating transactions in, or inducing or attempting to induce the purchase or sale of securities 

as a “broker.” 

133. Flynn solicited investors, promoted the merits of a Vuuzle investment, facilitated 

and negotiated the transactions, supervised and controlled a securities sales force, handled 

customer funds, drafted offering documents, and was paid in commissions. 

134. During the relevant time period, Defendant Flynn was not registered with the 

Commission as a broker-dealer or a person associated with a broker-dealer registered with the 

Commission.  Nor did any exemption from the broker-dealer registration requirements exist with 

respect to the securities and transactions described in this Complaint. 

135. By engaging in the foregoing misconduct, Flynn has violated, and unless enjoined 

will continue to violate, Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court grant the following 
relief: 

(a) Enter a Final Judgment finding that Vuuzle, Flynn, and Marchitto each violated 

the securities laws and rules promulgated thereunder as alleged against them herein; 

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(b) Enter an Order permanently restraining and enjoining Vuuzle, Flynn, and 

Marchitto from committing future violations of the securities laws and rules promulgated 

thereunder; 

(c) Enter an Order requiring Vuuzle, Flynn, and Marchitto to disgorge all ill-gotten 

gains, including prejudgment interest, resulting from the violations alleged herein; 

(d) Enter an Order requiring Vuuzle, Flynn, and Marchitto to pay civil money 

penalties pursuant to Section 20(d) of the Securities Act  [15 U.S.C. § 77t(d)] and Section 21A of 

the Exchange Act [15 U.S.C. § 78u-1]; and 

(e) Award such other and further relief as this Court may deem just and appropriate. 

JURY DEMAND 

Pursuant to Rule 39 of the Federal Rules of Civil Procedure, Plaintiff demands that this 

case by tried to a jury. 

Dated: January 27, 2021.  Respectfully submitted, 

/s/ Daniel J. Maher 
Daniel J. Maher 
Devon Staren 
Attorneys for Plaintiff 
U.S. Securities and Exchange Commission 
100 F Street NE 
Washington, DC 20549 
(202) 551-4737 (Maher) 
(202) 551-5346 (Staren) 
[email protected] 
[email protected] 

Of Counsel: 

Drew Isler Grossman 
U.S. Securities and Exchange Commission 
100 F. Street N.E. 
Washington DC 20549 

35 

mailto:[email protected]
mailto:[email protected]


 

 

 

 
 
 
  
 

 

 
 
 

    

 

 
  

 

Case 2:21-cv-01226 Document 1 Filed 01/27/21 Page 36 of 36 PageID: 36 

DESIGNATION OF AGENT FOR SERVICE UNDER LOCAL CIVIL RULE 101.1(f) 

In accordance with Local Civil Rule 101.1(f), the undersigned hereby makes the 

following designation for the receipt of service of all notices or papers in this action at the 

following address: 

United States Attorney's Office 
District of New Jersey 
Attention: J. Andrew Ruymann 
Assistant U.S. Attorney 
402 East State Street, Room 430 

 Trenton, NJ 08608. 

Dated: January 27, 2021 

      Respectfully submitted, 

/s/ Daniel J. Maher 
Daniel J. Maher 
Devon Staren 
Attorneys for Plaintiff 
U.S. Securities and Exchange Commission 
100 F Street NE 
Washington, DC 20549 
(202) 551-4737 (Maher) 
(202) 551-5346 (Staren) 
[email protected] 
[email protected] 

36 

mailto:[email protected]
mailto:[email protected]