In re TOD A. DITOMMASO

UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
SECURITIES ACT OF 1933 
Release No. 10215 / September 16, 2016 
ADMINISTRATIVE PROCEEDING 
File No. 3-17550 
 
In the Matter of 
 
TOD A. DITOMMASO, 
ESQ.,  
 
Respondent. 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT 
TO SECTION 8A OF THE 
SECURITIES ACT OF 1933 AND 
NOTICE OF HEARING 
I. 
The Securities and Exchange Commission (“Commission”) deems it appropriate 
that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of 
the Securities Act of 1933 (“Securities Act”) against Tod A. DiTommaso (“Respondent” or 
“DiTommaso”). 
II. 
After an investigation, the Division of Enforcement alleges that: 
Summary 
1. From approximately April 2011 to May 2014 (the “relevant period”), Fusion 
Pharm, Inc. (“FSPM”), through its chief executive officer (“CEO”), president and sole 
director Scott M. Dittman, and its undisclosed de facto officer and control person William J. 
Sears, engaged in an approximately $12.2 million fraudulent scheme in violation of the 
registration and antifraud provisions of the federal securities laws.  The scheme essentially 
involved four steps.   
2. First, utilizing backdated convertible notes and preferred FSPM stock, 
FSPM issued common stock to three entities controlled by Sears.  Second, Sears, through 
these entities, illegally sold the FSPM stock into the market.  Third, Sears transferred some 
of the proceeds from the illegal stock sales back to FSPM, where the money was 
fraudulently recognized and reported as revenue.  Fourth, FSPM issued press releases and 
financial reports claiming the false revenues, and failed to disclose Sears’ identity, role, and 

 
 
2 
background in FSPM’s quarterly and annual reports posted on the OTC Markets Group, 
Inc.’s website.   
3. Respondent DiTommaso is an attorney who issued at least ten attorney 
opinion letters between July 2012 and August 2013 that were prepared to allow entities and 
individuals to sell purportedly unrestricted FSPM stock into the market for over $1.2 
million in proceeds.  
Respondent 
4. Tod A. DiTommaso, Esq., age 52, is a resident of San Rafael, California.  
DiTommaso was licensed as an attorney by the California State Bar in 1987.  His license 
was suspended in 1997, and then reinstated in 2000.  
Other Relevant Entities and Individuals 
5. Fusion Pharm, Inc. (“FSPM”) is a Nevada corporation with its principal 
offices in Denver, Colorado.  The company is focused on the development, production and 
sales of the “patent pending PharmPods cultivation container system,” which are 
refurbished shipping containers used primarily to grow cannabis.  FSPM has never 
registered an offering of securities under the Securities Act or a class of securities under the 
Exchange Act.  Beginning on April 4, 2011, the company’s stock was quoted on OTC Link 
(previously “Pink Sheets”) operated by OTC Markets Group Inc. (“OTC Link”) under the 
symbol FSPM.  Following the Commission’s 10-business day trading suspension in May 
2014, FSPM is currently listed as a Caveat Emptor/Grey Market OTC stock. 
 
6. Scott M. Dittman, age 47, is a resident of Boyertown, Pennsylvania.  
During the relevant period, Dittman was a founder, FSPM’s CEO, president, and sole 
director.  Dittman signed and certified FSPM’s unaudited quarterly and annual financial 
statements posted on the OTC Markets Group Inc.’s website.  Dittman was licensed as a 
certified public accountant (“CPA”) in California in 1995.  His CPA license was cancelled 
in April 2002, five years after it expired in 1997. 
 
7. William J. Sears, age 50, is a resident of Thornton, Colorado.  During the 
relevant period, Sears was a founder, de facto executive officer and undisclosed control 
person of FSPM.  In 2007, Sears plead guilty to one count of conspiracy to commit 
securities fraud and commercial bribery and one count of securities fraud.  United States v. 
Sears, Case No. 04-cr-556-swk (S.D.N.Y.). 
 
8. Microcap Management LLC (“Microcap”) is a Nevada limited liability 
company, with its primary business address listed as Sears’ home address in Thornton, 
Colorado.  Sears controls Microcap and is listed as the Manager with the Nevada Secretary 
of State.   
 
9. Bayside Realty Holdings LLC (“Bayside”) is a Nevada limited liability 
company, with its primary business address listed as the home address of Sears’ mother in 
New Bern, North Carolina.  During the relevant period, Sears controlled Bayside.  

 
 
3 
 
10. Meadpoint Venture Partners, LLC (“Meadpoint”) is a Nevada limited 
liability company that shared a primary business address with FSPM’s prior warehouse in 
Denver, Colorado.  Meadpoint was purportedly FSPM’s exclusive distributor of 
PharmPods during the relevant period.  During the relevant period, Sears controlled 
Meadpoint, and he represented himself as its “Managing Member.”  Dittman was a 
shareholder and Internal Revenue Service Form 1099 employee of Meadpoint. 
Formation of FSPM and Sears’ Role in FSPM 
11. In late 2010, Dittman and Sears took over an existing public company, 
changing its name to FSPM in March 2011.  Dittman was listed as the CEO of the 
company, but Sears acted as an undisclosed executive officer.  Among other things, Sears 
worked at FSPM from its inception, appeared on non-public company documents as an 
officer, drew a paycheck, and handled many day-to-day responsibilities usually reserved 
for a company officer.  Although FSPM was ostensibly in the business of selling 
PharmPods, it had almost no revenue to fund its operations.  Instead, from 2011 through 
2013, FSPM was funded almost entirely through illegal sales of FSPM stock.  
Dittman and Sears Funnel Shares Into Microcap, Bayside and Meadpoint 
12. In 2009, Microcap received common shares from FSPM’s predecessor 
company for stock promotion work.  In 2010, Microcap received preferred shares as part of 
the transfer of the predecessor company to Sears and Dittman.  In 2011, Microcap 
purchased FSPM common shares from an individual FSPM shareholder.   
13. In June 2012, Sears and Dittman prepared fraudulent non-convertible 
promissory notes and credit lines between FSPM and Bayside and between FSPM and 
Meadpoint.  The Bayside non-convertible note and credit line agreement, with a credit limit 
of $275,000, was backdated to May 2, 2011.  The Meadpoint non-convertible promissory 
note and credit line agreement, with a credit limit of $200,000 was backdated to June 15, 
2011.   
14. In November/December 2012, the Bayside and Meadpoint notes were re-
drafted as fraudulent convertible notes.  The notes were changed from non-convertible to 
convertible in order to obtain more unrestricted FSPM stock to sell illegally into the market 
and to investors, and in turn to fund FSPM.  Without changing the notes to convertible 
notes, FSPM would not have been able to issue purportedly unrestricted shares to Sears’ 
entities.  The Bayside note, backdated to May 2, 2011, was a 10% Convertible Promissory 
Note and Line of Credit Agreement in the amount of $275,000, with a conversion rate of 
$0.01/share.  The Meadpoint convertible note, this time backdated to December 8, 2011, 
was a 10% Convertible Promissory Note in the amount of $88,000, with a conversion rate 
of $0.01/share. 

 
 
4 
Microcap, Bayside and Meadpoint Illegally Sell Shares Into The Market  
Based On DiTommaso’s Attorney Opinion Letters   
15. Between approximately April 2011 and December 2012, Microcap sold 
approximately 735,000 shares of unregistered FSPM stock.  Microcap’s sale of these 
unregistered shares was based on false statements to brokers and to FSPM’s stock transfer 
agent that Sears had no role at or control of FSPM, and therefore that Microcap was not an 
affiliate of FSPM.   
16. Between approximately February 2013 and April 2013, pursuant to the 
Bayside convertible note, Bayside converted debt into 140,000 FSPM common shares and 
sold them into the market.  In order to facilitate the sales, Sears and Dittman made false 
statements to brokers and the transfer agent about Bayside’s purported non-affiliate status.  
In addition to the consequences the fraudulent Bayside convertible promissory note had on 
Bayside’s ability to receive unrestricted shares, Bayside’s true affiliate status also meant 
that Bayside needed to abide by the volume restrictions of Securities Act Rule 144 [17 
C.F.R. § 230.144], which it failed to do.  Bayside sold the remainder of its note to an 
investment group for $250,000 and, based on more false statements from Dittman and 
Sears, the investors sold shares prior to the expiration of the one-year holding period 
required by Securities Act Rule 144 [17 C.F.R. § 230.144].   
17. Between approximately March 2013 and April 2014, pursuant to the 
Meadpoint convertible note, Meadpoint converted $42,450 of debt into 4.245 million 
FSPM common shares, and then sold into the market approximately 3.2 million of those 
shares.  In order to facilitate the sales, Sears and Dittman made false statements to brokers 
and the transfer agent about Meadpoint’s purported non-affiliate status.  In August 2013, 
Meadpoint also converted $15,000 of fake debt into 1.5 million shares and then sold them 
to three investors.  The investors received unrestricted shares on the basis of, again, 
Dittman’s and Sears’ false representations of Meadpoint’s non-affiliate status.   
18. In order to ensure that his entities could sell their FSPM shares without a 
restrictive legend, Sears needed attorney opinion letters opining that Microcap, Bayside and 
Meadpoint were not affiliates of FSPM, and consequently opining that the transactions 
were exempt from the registration requirements of Section 5 of the Securities Act [15 
U.S.C. § 77(e)] .  Between approximately July 2012 and August 2013, DiTommaso signed 
at least ten attorney opinion letters for FSPM shareholders, either directly for Microcap, 
Bayside and Meadpoint, or for shareholders who received their shares from Bayside and 
Meadpoint.   
19. Each of the opinion letters followed the same pattern.  Another attorney 
(who at the time had been barred by the OTC from providing attorney opinion letters)
1
 
emailed to DiTommaso an already drafted legal opinion and underlying documents relating 
                                                 
1
 This other attorney has since been barred by the Commission, without a right to reapply, 
from appearing or practicing before the Commission as an attorney, and is currently in 
the custody of New York State criminal authorities for a scheme regarding different, 
unrelated attorney opinion letters.     

 
 
5 
to the shares; DiTommaso put the legal opinion on his letterhead; he sent the letter back to 
the other attorney; and that attorney paid DiTommaso approximately $175 per legal 
opinion.  DiTommaso’s sole communication about the FSPM stock, and the transactions 
through which the shareholders received the stock, was through the other attorney. 
20. When DiTommaso wrote the opinion letters, he was in possession of 
information that it was, under the circumstances, unreasonable for him to rely upon without 
further inquiry.  At all relevant times, DiTommaso knew, or was reckless in not knowing 
and should have known, that Sears and his entities were FSPM affiliates.   
21. Prior to drafting any of the 10 opinion letters at issue, DiTommaso received:  
(1) FSPM stock certificates that Sears’ mother had signed as president of FSPM; and (2) an 
email from the other attorney copying Sears on his FSPM email—
[email protected].  Then, in support of the attorney opinion letters he issued, 
DiTommaso received: (1) attestations that Sears’ mother signed on behalf of Bayside 
stating that it was not an affiliate; (2) a share purchase agreement that Sears signed on 
behalf of Microcap; and (3) attestations that Sears signed on behalf of Meadpoint stating 
that it was not an affiliate.   
22. DiTommaso had documents in his possession showing that Sears had 
signed documents on behalf of Microcap and Meadpoint, and that Sears’ mother had signed 
documents on behalf of Bayside.  However, DiTommaso failed to follow-up on the 
inconsistencies suggested by these documents, including failing to make any additional 
inquiries as to the identity of the management or principal of these companies.   
23. DiTommaso’s false opinion that Microcap, Bayside and Meadpoint were 
not affiliates was based on the written statements from FSPM (Dittman) and Sears’ entities 
(Sears and his mother).  DiTommaso did not follow up on the attestations and other 
documents in light of the information he had about Sears’ and his mother’s roles in FSPM.  
DiTommaso conceded during his investigative testimony that these were “red flags” and 
that he “never paid attention” to the email showing Sears had a FSPM email address. 
24. The ten attorney opinion letters issued by DiTommaso that are the subject 
of this action are:  
 July 23, 2012 DiTommaso attorney opinion letter relating to 40,000 shares 
of FSPM stock that Microcap purportedly purchased from an individual 
shareholder. 
 January 4, 2013 DiTommaso attorney opinion letter relating to 140,000 
shares of FSPM stock that Bayside converted from $1,400 of debt under the 
Bayside convertible note. 
 March 13, 2013 DiTommaso attorney opinion letter relating to 12,500 
shares of FSPM stock that Investor #1 converted from the debt the five 
investors purchased from Bayside. 

 
 
6 
 March 13, 2013 DiTommaso attorney opinion letter relating to 137,500 
shares of FSPM stock that Investor #2 converted from the debt the five 
investors purchased from Bayside. 
 March 13, 2013 DiTommaso attorney opinion letter relating to 12,500 
shares of FSPM stock that Investor #3 converted from the debt the five 
investors purchased from Bayside. 
 March 13, 2013 DiTommaso attorney opinion letter relating to 25,500 
shares of FSPM stock that Investor #4 converted from the debt the five 
investors purchased from Bayside. 
 March 13, 2013 DiTommaso attorney opinion letter relating to 12,500 
shares of FSPM stock that Investor #5 converted from the debt the five 
investors purchased from Bayside. 
 March 31, 2013 DiTommaso attorney opinion letter relating to 475,000 
shares of FSPM stock that Meadpoint converted from $4,750 of debt under 
the Meadpoint convertible note. 
 August 13, 2013 DiTommaso attorney opinion letter relating to 500,000 
shares of FSPM stock that Meadpoint converted from $5,000 of debt under 
the Meadpoint convertible note. 
 August 26, 2013 DiTommaso attorney opinion letter relating to 500,000 
shares of FSPM stock for each of the three investors (1.5 million shares 
total) who purchased 500,000 shares each from Meadpoint after Meadpoint 
converted $15,000 of debt into 1.5 million shares under the Meadpoint 
convertible note. 
25. The proceeds from the illegal sales by these FSPM shareholders for whom 
DiTommaso issued attorney opinion letters totaled over $1.2 million.   
26. But for the opinion letters, FSPM’s transfer agent would not have issued the 
FSPM stock without a restrictive legend.  Thus, DiTommaso was a substantial factor and 
necessary participant in the unregistered sales of FSPM’s securities in violation of Section 
5 of the Securities Act.   
FSPM Falsely Reports Proceeds From Stock Sales As Revenue and Issues  
Additional False and Misleading Statements  
27. Almost all of the funds flowing into FSPM’s bank account in 2011, 2012, 
and 2013, either directly from Microcap, Bayside or Meadpoint or funneled through 
another Sears entity, are traced back to Microcap’s, Bayside’s and Meadpoint’s stock sales 
and sale of its debt, sales which would not have been possible without DiTommaso’s 
attorney opinion letters.  FSPM used proceeds from the sales of stock and debt to fund its 
operations.   

 
 
7 
28. FSPM, through Dittman and Sears, reported false revenues and made false 
statements about sales of PharmPods in press releases, which in turn maintained and/or 
increased FSPM’s stock price and volume, and allowed Sears to sell his FSPM stock into 
the market.  The false financial statements and revenue reported by FSPM were included in 
FSPM’s 2011, 2012 and 2013 annual reports (including its financial statements and notes 
to the financial statements), all signed by Dittman and posted on the OTC Markets Group 
Inc.’s website.  FSPM also claimed to have sold PharmPods to certain Sears’ entities, 
including to Meadpoint and another Sears entity, but failed to disclose these transactions, as 
well as the Bayside and Meadpoint notes, as related party transactions.   
Violations 
29. As a result of the conduct described above, Respondent violated Sections 
5(a) and 5(c) of the Securities Act.  Section 5(a) of the Securities Act prohibits the direct 
or indirect sale of securities through the mail or interstate commerce unless a registration 
statement is in effect.  Section 5(c) prohibits the direct or indirect offer for sale of 
securities through the mail or interstate commerce unless a registration statement has been 
filed.   
III. 
In view of the allegations made by the Division of Enforcement, the Commission 
deems it necessary and appropriate that cease-and-desist proceedings be instituted to 
determine: 
A.  Whether the allegations set forth in Section II hereof are true and, in 
connection therewith, to afford Respondent an opportunity to establish any defenses to such 
allegations; and 
B.  Whether, pursuant to Section 8A of the Securities Act, Respondent should be 
ordered to cease and desist from committing or causing violations of and any future 
violations of Sections 5(a) and 5(c) of the Securities Act, whether Respondent should be 
ordered to pay a civil penalty pursuant to Section 8A(g) of the Securities Act, and whether 
Respondent should be ordered to pay disgorgement pursuant to Section 8A(e) of the 
Securities Act. 
IV. 
NOTICE TO RESPONDENT: 
On July 13, 2016, the Commission voted to amend certain of its Rules of Practice 
related to administrative proceedings.  The amended rules will become effective on 
September 27, 2016 and shall apply to proceedings initiated on or after that date.  Some of 
the amendments will apply to proceedings initiated before that date, depending on the 
circumstances, as detailed in Exchange Act Release No. 34-78319, Amendments to the 
Commission’s Rules of Practice, at 75-76 [81 FR 50212, at 50229-30 (July 29, 2016)].  
Additionally, for proceedings instituted on or after July 13, 2016 but before September 27, 
2016, the parties may elect to have the amended rules (except for the amendments to Rule 

 
 
8 
141, regarding service of orders instituting proceedings) apply to such proceedings if, 
within 14 days of service of the Order Instituting Proceedings (OIP), every party to the 
proceeding, including the Division of Enforcement, submits a request in writing to the 
Office of the Secretary of the Commission that the proceedings be conducted under the 
amended rules.  Moreover, various other of the amended rules will apply in cases in which 
the initial prehearing conference pursuant to Rule 221 has not been held as of September 
27, 2016 or where the proceedings have been stayed as of September 27, 2016 (except for 
proceedings stayed pursuant to Rule 161(c)(2)(i)), See Exchange Act Release No. 34-
78319, Amendments to the Commission’s Rules of Practice, at 73-74, [81 FR 50212, at 
50228-29 ]. 
IT IS ORDERED that a public hearing for the purpose of taking evidence on the 
questions set forth in Section III hereof shall be convened not earlier than 30 days and not 
later than 60 days from service of this Order at a time and place to be fixed, and before an 
Administrative Law Judge to be designated by further order as provided by Rule 110 of the 
Commission's Rules of Practice, 17 C.F.R. § 201.110.   
IT IS FURTHER ORDERED that Respondent shall file an Answer to the allegations 
contained in this Order within twenty (20) days after service of this Order, as provided by 
Rule 220 of the Commission's Rules of Practice, 17 C.F.R. § 201.220.  
If Respondent fails to file the directed answer, or fails to appear at a hearing after 
being duly notified, the Respondent may be deemed in default and the proceedings may be 
determined against him upon consideration of this Order, the allegations of which may be 
deemed to be true as provided by Rules 155(a), 220(f), 221(f) and 310 of the Commission's 
Rules of Practice, 17 C.F.R. §§ 201.155(a), 201.220(f), 201.221(f) and 201.310. 
This Order shall be served forthwith upon Respondent as provided for in the 
Commission’s Rules of Practice.    
Initial Decision of Hearing Officer 
IT IS ORDERED that the Administrative Law Judge shall issue an initial decision 
no later than 300 days from the date of service of this Order, pursuant to Rule 360(a)(2) of 
the Commission’s Rules of Practice, in effect as of the date of this Order; unless one of the 
following conditions has been met:  
a)  If the parties have elected, pursuant to the procedures outlined in the above 
Notice, to have the amended Rules of Practice
2
 apply to these proceedings, then IT IS 
ORDERED that this matter will proceed on a 120-day timeline under amended Rule 
360(a)(2) and the timing of the initial decision is determined by that Rule; 
 
                                                 
2
 For purposes of this Order, amended rule(s) means the Rules of Practice in effect as of 
September 27, 2016.  See Exchange Act Release No. 34-78319, Amendments to the 
Commission’s Rules of Practice, [81 FR 50212 (July 29, 2016)]. 

 
 
9 
b)  If the initial prehearing conference pursuant to Rule 221 has not been held as of 
September 27, 2016, then IT IS ORDERED that this matter will proceed on a 120-day 
timeline under amended Rule 360(a)(2) and the timing of the initial decision is determined 
by that Rule; or 
 
c)  If the proceedings have been stayed as of September 27, 2016 (except for 
proceedings stayed pursuant to Rule 161(c)(2)(i)), then IT IS ORDERED that this matter 
will proceed on a 120-day timeline under amended Rule 360(a)(2) and the timing of the 
initial decision is determined by that Rule.  
In the absence of an appropriate waiver, no officer or employee of the Commission 
engaged in the performance of investigative or prosecuting functions in this or any factually 
related proceeding will be permitted to participate or advise in the decision of this matter, 
except as witness or counsel in proceedings held pursuant to notice.  Since this proceeding is 
not “rule making” within the meaning of Section 551 of the Administrative Procedure Act, it 
is not deemed subject to the provisions of Section 553 delaying the effective date of any 
final Commission action. 
 By the Commission. 
 
 
 
        Brent J. Fields 
        Secretary 
 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

SECURITIES ACT OF 1933 

Release No. 10215 / September 16, 2016 

ADMINISTRATIVE PROCEEDING 

File No. 3-17550 

 

In the Matter of 

 

TOD A. DITOMMASO, 

ESQ.,  

 

Respondent. 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT 

TO SECTION 8A OF THE 

SECURITIES ACT OF 1933 AND 

NOTICE OF HEARING 

I. 

The Securities and Exchange Commission (“Commission”) deems it appropriate 

that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of 

the Securities Act of 1933 (“Securities Act”) against Tod A. DiTommaso (“Respondent” or 

“DiTommaso”). 

II. 

After an investigation, the Division of Enforcement alleges that: 

Summary 

1. From approximately April 2011 to May 2014 (the “relevant period”), Fusion 

Pharm, Inc. (“FSPM”), through its chief executive officer (“CEO”), president and sole 

director Scott M. Dittman, and its undisclosed de facto officer and control person William J. 

Sears, engaged in an approximately $12.2 million fraudulent scheme in violation of the 

registration and antifraud provisions of the federal securities laws.  The scheme essentially 

involved four steps.   

2. First, utilizing backdated convertible notes and preferred FSPM stock, 

FSPM issued common stock to three entities controlled by Sears.  Second, Sears, through 

these entities, illegally sold the FSPM stock into the market.  Third, Sears transferred some 

of the proceeds from the illegal stock sales back to FSPM, where the money was 

fraudulently recognized and reported as revenue.  Fourth, FSPM issued press releases and 

financial reports claiming the false revenues, and failed to disclose Sears’ identity, role, and 



 

 

2 

background in FSPM’s quarterly and annual reports posted on the OTC Markets Group, 

Inc.’s website.   

3. Respondent DiTommaso is an attorney who issued at least ten attorney 

opinion letters between July 2012 and August 2013 that were prepared to allow entities and 

individuals to sell purportedly unrestricted FSPM stock into the market for over $1.2 

million in proceeds.  

Respondent 

4. Tod A. DiTommaso, Esq., age 52, is a resident of San Rafael, California.  

DiTommaso was licensed as an attorney by the California State Bar in 1987.  His license 

was suspended in 1997, and then reinstated in 2000.  

Other Relevant Entities and Individuals 

5. Fusion Pharm, Inc. (“FSPM”) is a Nevada corporation with its principal 

offices in Denver, Colorado.  The company is focused on the development, production and 

sales of the “patent pending PharmPods cultivation container system,” which are 

refurbished shipping containers used primarily to grow cannabis.  FSPM has never 

registered an offering of securities under the Securities Act or a class of securities under the 

Exchange Act.  Beginning on April 4, 2011, the company’s stock was quoted on OTC Link 

(previously “Pink Sheets”) operated by OTC Markets Group Inc. (“OTC Link”) under the 

symbol FSPM.  Following the Commission’s 10-business day trading suspension in May 

2014, FSPM is currently listed as a Caveat Emptor/Grey Market OTC stock. 

 

6. Scott M. Dittman, age 47, is a resident of Boyertown, Pennsylvania.  

During the relevant period, Dittman was a founder, FSPM’s CEO, president, and sole 

director.  Dittman signed and certified FSPM’s unaudited quarterly and annual financial 

statements posted on the OTC Markets Group Inc.’s website.  Dittman was licensed as a 

certified public accountant (“CPA”) in California in 1995.  His CPA license was cancelled 

in April 2002, five years after it expired in 1997. 

 

7. William J. Sears, age 50, is a resident of Thornton, Colorado.  During the 

relevant period, Sears was a founder, de facto executive officer and undisclosed control 

person of FSPM.  In 2007, Sears plead guilty to one count of conspiracy to commit 

securities fraud and commercial bribery and one count of securities fraud.  United States v. 

Sears, Case No. 04-cr-556-swk (S.D.N.Y.). 

 

8. Microcap Management LLC (“Microcap”) is a Nevada limited liability 

company, with its primary business address listed as Sears’ home address in Thornton, 

Colorado.  Sears controls Microcap and is listed as the Manager with the Nevada Secretary 

of State.   

 

9. Bayside Realty Holdings LLC (“Bayside”) is a Nevada limited liability 

company, with its primary business address listed as the home address of Sears’ mother in 

New Bern, North Carolina.  During the relevant period, Sears controlled Bayside.  



 

 

3 

 

10. Meadpoint Venture Partners, LLC (“Meadpoint”) is a Nevada limited 

liability company that shared a primary business address with FSPM’s prior warehouse in 

Denver, Colorado.  Meadpoint was purportedly FSPM’s exclusive distributor of 

PharmPods during the relevant period.  During the relevant period, Sears controlled 

Meadpoint, and he represented himself as its “Managing Member.”  Dittman was a 

shareholder and Internal Revenue Service Form 1099 employee of Meadpoint. 

Formation of FSPM and Sears’ Role in FSPM 

11. In late 2010, Dittman and Sears took over an existing public company, 

changing its name to FSPM in March 2011.  Dittman was listed as the CEO of the 

company, but Sears acted as an undisclosed executive officer.  Among other things, Sears 

worked at FSPM from its inception, appeared on non-public company documents as an 

officer, drew a paycheck, and handled many day-to-day responsibilities usually reserved 

for a company officer.  Although FSPM was ostensibly in the business of selling 

PharmPods, it had almost no revenue to fund its operations.  Instead, from 2011 through 

2013, FSPM was funded almost entirely through illegal sales of FSPM stock.  

Dittman and Sears Funnel Shares Into Microcap, Bayside and Meadpoint 

12. In 2009, Microcap received common shares from FSPM’s predecessor 

company for stock promotion work.  In 2010, Microcap received preferred shares as part of 

the transfer of the predecessor company to Sears and Dittman.  In 2011, Microcap 

purchased FSPM common shares from an individual FSPM shareholder.   

13. In June 2012, Sears and Dittman prepared fraudulent non-convertible 

promissory notes and credit lines between FSPM and Bayside and between FSPM and 

Meadpoint.  The Bayside non-convertible note and credit line agreement, with a credit limit 

of $275,000, was backdated to May 2, 2011.  The Meadpoint non-convertible promissory 

note and credit line agreement, with a credit limit of $200,000 was backdated to June 15, 

2011.   

14. In November/December 2012, the Bayside and Meadpoint notes were re-

drafted as fraudulent convertible notes.  The notes were changed from non-convertible to 

convertible in order to obtain more unrestricted FSPM stock to sell illegally into the market 

and to investors, and in turn to fund FSPM.  Without changing the notes to convertible 

notes, FSPM would not have been able to issue purportedly unrestricted shares to Sears’ 

entities.  The Bayside note, backdated to May 2, 2011, was a 10% Convertible Promissory 

Note and Line of Credit Agreement in the amount of $275,000, with a conversion rate of 

$0.01/share.  The Meadpoint convertible note, this time backdated to December 8, 2011, 

was a 10% Convertible Promissory Note in the amount of $88,000, with a conversion rate 

of $0.01/share. 



 

 

4 

Microcap, Bayside and Meadpoint Illegally Sell Shares Into The Market  

Based On DiTommaso’s Attorney Opinion Letters   

15. Between approximately April 2011 and December 2012, Microcap sold 

approximately 735,000 shares of unregistered FSPM stock.  Microcap’s sale of these 

unregistered shares was based on false statements to brokers and to FSPM’s stock transfer 

agent that Sears had no role at or control of FSPM, and therefore that Microcap was not an 

affiliate of FSPM.   

16. Between approximately February 2013 and April 2013, pursuant to the 

Bayside convertible note, Bayside converted debt into 140,000 FSPM common shares and 

sold them into the market.  In order to facilitate the sales, Sears and Dittman made false 

statements to brokers and the transfer agent about Bayside’s purported non-affiliate status.  

In addition to the consequences the fraudulent Bayside convertible promissory note had on 

Bayside’s ability to receive unrestricted shares, Bayside’s true affiliate status also meant 

that Bayside needed to abide by the volume restrictions of Securities Act Rule 144 [17 

C.F.R. § 230.144], which it failed to do.  Bayside sold the remainder of its note to an 

investment group for $250,000 and, based on more false statements from Dittman and 

Sears, the investors sold shares prior to the expiration of the one-year holding period 

required by Securities Act Rule 144 [17 C.F.R. § 230.144].   

17. Between approximately March 2013 and April 2014, pursuant to the 

Meadpoint convertible note, Meadpoint converted $42,450 of debt into 4.245 million 

FSPM common shares, and then sold into the market approximately 3.2 million of those 

shares.  In order to facilitate the sales, Sears and Dittman made false statements to brokers 

and the transfer agent about Meadpoint’s purported non-affiliate status.  In August 2013, 

Meadpoint also converted $15,000 of fake debt into 1.5 million shares and then sold them 

to three investors.  The investors received unrestricted shares on the basis of, again, 

Dittman’s and Sears’ false representations of Meadpoint’s non-affiliate status.   

18. In order to ensure that his entities could sell their FSPM shares without a 

restrictive legend, Sears needed attorney opinion letters opining that Microcap, Bayside and 

Meadpoint were not affiliates of FSPM, and consequently opining that the transactions 

were exempt from the registration requirements of Section 5 of the Securities Act [15 

U.S.C. § 77(e)] .  Between approximately July 2012 and August 2013, DiTommaso signed 

at least ten attorney opinion letters for FSPM shareholders, either directly for Microcap, 

Bayside and Meadpoint, or for shareholders who received their shares from Bayside and 

Meadpoint.   

19. Each of the opinion letters followed the same pattern.  Another attorney 

(who at the time had been barred by the OTC from providing attorney opinion letters)
1
 

emailed to DiTommaso an already drafted legal opinion and underlying documents relating 

                                                 
1
 This other attorney has since been barred by the Commission, without a right to reapply, 

from appearing or practicing before the Commission as an attorney, and is currently in 

the custody of New York State criminal authorities for a scheme regarding different, 

unrelated attorney opinion letters.     



 

 

5 

to the shares; DiTommaso put the legal opinion on his letterhead; he sent the letter back to 

the other attorney; and that attorney paid DiTommaso approximately $175 per legal 

opinion.  DiTommaso’s sole communication about the FSPM stock, and the transactions 

through which the shareholders received the stock, was through the other attorney. 

20. When DiTommaso wrote the opinion letters, he was in possession of 

information that it was, under the circumstances, unreasonable for him to rely upon without 

further inquiry.  At all relevant times, DiTommaso knew, or was reckless in not knowing 

and should have known, that Sears and his entities were FSPM affiliates.   

21. Prior to drafting any of the 10 opinion letters at issue, DiTommaso received:  

(1) FSPM stock certificates that Sears’ mother had signed as president of FSPM; and (2) an 

email from the other attorney copying Sears on his FSPM email—

[email protected].  Then, in support of the attorney opinion letters he issued, 

DiTommaso received: (1) attestations that Sears’ mother signed on behalf of Bayside 

stating that it was not an affiliate; (2) a share purchase agreement that Sears signed on 

behalf of Microcap; and (3) attestations that Sears signed on behalf of Meadpoint stating 

that it was not an affiliate.   

22. DiTommaso had documents in his possession showing that Sears had 

signed documents on behalf of Microcap and Meadpoint, and that Sears’ mother had signed 

documents on behalf of Bayside.  However, DiTommaso failed to follow-up on the 

inconsistencies suggested by these documents, including failing to make any additional 

inquiries as to the identity of the management or principal of these companies.   

23. DiTommaso’s false opinion that Microcap, Bayside and Meadpoint were 

not affiliates was based on the written statements from FSPM (Dittman) and Sears’ entities 

(Sears and his mother).  DiTommaso did not follow up on the attestations and other 

documents in light of the information he had about Sears’ and his mother’s roles in FSPM.  

DiTommaso conceded during his investigative testimony that these were “red flags” and 

that he “never paid attention” to the email showing Sears had a FSPM email address. 

24. The ten attorney opinion letters issued by DiTommaso that are the subject 

of this action are:  

 July 23, 2012 DiTommaso attorney opinion letter relating to 40,000 shares 

of FSPM stock that Microcap purportedly purchased from an individual 

shareholder. 

 January 4, 2013 DiTommaso attorney opinion letter relating to 140,000 

shares of FSPM stock that Bayside converted from $1,400 of debt under the 

Bayside convertible note. 

 March 13, 2013 DiTommaso attorney opinion letter relating to 12,500 

shares of FSPM stock that Investor #1 converted from the debt the five 

investors purchased from Bayside. 

mailto:email—[email protected]—and
mailto:email—[email protected]—and


 

 

6 

 March 13, 2013 DiTommaso attorney opinion letter relating to 137,500 

shares of FSPM stock that Investor #2 converted from the debt the five 

investors purchased from Bayside. 

 March 13, 2013 DiTommaso attorney opinion letter relating to 12,500 

shares of FSPM stock that Investor #3 converted from the debt the five 

investors purchased from Bayside. 

 March 13, 2013 DiTommaso attorney opinion letter relating to 25,500 

shares of FSPM stock that Investor #4 converted from the debt the five 

investors purchased from Bayside. 

 March 13, 2013 DiTommaso attorney opinion letter relating to 12,500 

shares of FSPM stock that Investor #5 converted from the debt the five 

investors purchased from Bayside. 

 March 31, 2013 DiTommaso attorney opinion letter relating to 475,000 

shares of FSPM stock that Meadpoint converted from $4,750 of debt under 

the Meadpoint convertible note. 

 August 13, 2013 DiTommaso attorney opinion letter relating to 500,000 

shares of FSPM stock that Meadpoint converted from $5,000 of debt under 

the Meadpoint convertible note. 

 August 26, 2013 DiTommaso attorney opinion letter relating to 500,000 

shares of FSPM stock for each of the three investors (1.5 million shares 

total) who purchased 500,000 shares each from Meadpoint after Meadpoint 

converted $15,000 of debt into 1.5 million shares under the Meadpoint 

convertible note. 

25. The proceeds from the illegal sales by these FSPM shareholders for whom 

DiTommaso issued attorney opinion letters totaled over $1.2 million.   

26. But for the opinion letters, FSPM’s transfer agent would not have issued the 

FSPM stock without a restrictive legend.  Thus, DiTommaso was a substantial factor and 

necessary participant in the unregistered sales of FSPM’s securities in violation of Section 

5 of the Securities Act.   

FSPM Falsely Reports Proceeds From Stock Sales As Revenue and Issues  

Additional False and Misleading Statements  

27. Almost all of the funds flowing into FSPM’s bank account in 2011, 2012, 

and 2013, either directly from Microcap, Bayside or Meadpoint or funneled through 

another Sears entity, are traced back to Microcap’s, Bayside’s and Meadpoint’s stock sales 

and sale of its debt, sales which would not have been possible without DiTommaso’s 

attorney opinion letters.  FSPM used proceeds from the sales of stock and debt to fund its 

operations.   



 

 

7 

28. FSPM, through Dittman and Sears, reported false revenues and made false 

statements about sales of PharmPods in press releases, which in turn maintained and/or 

increased FSPM’s stock price and volume, and allowed Sears to sell his FSPM stock into 

the market.  The false financial statements and revenue reported by FSPM were included in 

FSPM’s 2011, 2012 and 2013 annual reports (including its financial statements and notes 

to the financial statements), all signed by Dittman and posted on the OTC Markets Group 

Inc.’s website.  FSPM also claimed to have sold PharmPods to certain Sears’ entities, 

including to Meadpoint and another Sears entity, but failed to disclose these transactions, as 

well as the Bayside and Meadpoint notes, as related party transactions.   

Violations 

29. As a result of the conduct described above, Respondent violated Sections 

5(a) and 5(c) of the Securities Act.  Section 5(a) of the Securities Act prohibits the direct 

or indirect sale of securities through the mail or interstate commerce unless a registration 

statement is in effect.  Section 5(c) prohibits the direct or indirect offer for sale of 

securities through the mail or interstate commerce unless a registration statement has been 

filed.   

III. 

In view of the allegations made by the Division of Enforcement, the Commission 

deems it necessary and appropriate that cease-and-desist proceedings be instituted to 

determine: 

A.  Whether the allegations set forth in Section II hereof are true and, in 

connection therewith, to afford Respondent an opportunity to establish any defenses to such 

allegations; and 

B.  Whether, pursuant to Section 8A of the Securities Act, Respondent should be 

ordered to cease and desist from committing or causing violations of and any future 

violations of Sections 5(a) and 5(c) of the Securities Act, whether Respondent should be 

ordered to pay a civil penalty pursuant to Section 8A(g) of the Securities Act, and whether 

Respondent should be ordered to pay disgorgement pursuant to Section 8A(e) of the 

Securities Act. 

IV. 

NOTICE TO RESPONDENT: 

On July 13, 2016, the Commission voted to amend certain of its Rules of Practice 

related to administrative proceedings.  The amended rules will become effective on 

September 27, 2016 and shall apply to proceedings initiated on or after that date.  Some of 

the amendments will apply to proceedings initiated before that date, depending on the 

circumstances, as detailed in Exchange Act Release No. 34-78319, Amendments to the 

Commission’s Rules of Practice, at 75-76 [81 FR 50212, at 50229-30 (July 29, 2016)].  

Additionally, for proceedings instituted on or after July 13, 2016 but before September 27, 

2016, the parties may elect to have the amended rules (except for the amendments to Rule 



 

 

8 

141, regarding service of orders instituting proceedings) apply to such proceedings if, 

within 14 days of service of the Order Instituting Proceedings (OIP), every party to the 

proceeding, including the Division of Enforcement, submits a request in writing to the 

Office of the Secretary of the Commission that the proceedings be conducted under the 

amended rules.  Moreover, various other of the amended rules will apply in cases in which 

the initial prehearing conference pursuant to Rule 221 has not been held as of September 

27, 2016 or where the proceedings have been stayed as of September 27, 2016 (except for 

proceedings stayed pursuant to Rule 161(c)(2)(i)), See Exchange Act Release No. 34-

78319, Amendments to the Commission’s Rules of Practice, at 73-74, [81 FR 50212, at 

50228-29 ]. 

IT IS ORDERED that a public hearing for the purpose of taking evidence on the 

questions set forth in Section III hereof shall be convened not earlier than 30 days and not 

later than 60 days from service of this Order at a time and place to be fixed, and before an 

Administrative Law Judge to be designated by further order as provided by Rule 110 of the 

Commission's Rules of Practice, 17 C.F.R. § 201.110.   

IT IS FURTHER ORDERED that Respondent shall file an Answer to the allegations 

contained in this Order within twenty (20) days after service of this Order, as provided by 

Rule 220 of the Commission's Rules of Practice, 17 C.F.R. § 201.220.  

If Respondent fails to file the directed answer, or fails to appear at a hearing after 

being duly notified, the Respondent may be deemed in default and the proceedings may be 

determined against him upon consideration of this Order, the allegations of which may be 

deemed to be true as provided by Rules 155(a), 220(f), 221(f) and 310 of the Commission's 

Rules of Practice, 17 C.F.R. §§ 201.155(a), 201.220(f), 201.221(f) and 201.310. 

This Order shall be served forthwith upon Respondent as provided for in the 

Commission’s Rules of Practice.    

Initial Decision of Hearing Officer 

IT IS ORDERED that the Administrative Law Judge shall issue an initial decision 

no later than 300 days from the date of service of this Order, pursuant to Rule 360(a)(2) of 

the Commission’s Rules of Practice, in effect as of the date of this Order; unless one of the 

following conditions has been met:  

a)  If the parties have elected, pursuant to the procedures outlined in the above 

Notice, to have the amended Rules of Practice
2
 apply to these proceedings, then IT IS 

ORDERED that this matter will proceed on a 120-day timeline under amended Rule 

360(a)(2) and the timing of the initial decision is determined by that Rule; 

 

                                                 
2
 For purposes of this Order, amended rule(s) means the Rules of Practice in effect as of 

September 27, 2016.  See Exchange Act Release No. 34-78319, Amendments to the 

Commission’s Rules of Practice, [81 FR 50212 (July 29, 2016)]. 



 

 

9 

b)  If the initial prehearing conference pursuant to Rule 221 has not been held as of 

September 27, 2016, then IT IS ORDERED that this matter will proceed on a 120-day 

timeline under amended Rule 360(a)(2) and the timing of the initial decision is determined 

by that Rule; or 

 

c)  If the proceedings have been stayed as of September 27, 2016 (except for 

proceedings stayed pursuant to Rule 161(c)(2)(i)), then IT IS ORDERED that this matter 

will proceed on a 120-day timeline under amended Rule 360(a)(2) and the timing of the 

initial decision is determined by that Rule.  

In the absence of an appropriate waiver, no officer or employee of the Commission 

engaged in the performance of investigative or prosecuting functions in this or any factually 

related proceeding will be permitted to participate or advise in the decision of this matter, 

except as witness or counsel in proceedings held pursuant to notice.  Since this proceeding is 

not “rule making” within the meaning of Section 551 of the Administrative Procedure Act, it 

is not deemed subject to the provisions of Section 553 delaying the effective date of any 

final Commission action. 

 By the Commission. 

 

 

 

        Brent J. Fields 

        Secretary