In re MARC J. MIZE

 
 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 74624 / April 1, 2015 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 3647 / April 1, 2015 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-16469 
 
In the Matter of 
 
MARC J. MIZE, 
 
Respondent. 
 
 
 
 
ORDER INSTITUTING CEASE-AND-DESIST 
PROCEEDINGS, PURSUANT TO SECTION 
21C OF THE SECURITIES EXCHANGE ACT 
OF 1934, MAKING FINDINGS, AND 
IMPOSING A CEASE-AND-DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”) against Marc J. Mize (“Mize” or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over him and the subject matter of these 
proceedings, which are admitted, and except as provided herein in Section V, Respondent consents 
to the entry of this Order Instituting Cease-And-Desist Proceedings, Pursuant to Section 21C Of 
The Securities Exchange Act of 1934, Making Findings, And Imposing A Cease-And-Desist Order 
(“Order”), as set forth below.   
 

 
 
2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that  
Summary 
 
1. This case involves a fraudulent scheme by the owner (the “CEO”) of four private 
telecommunications companies (collectively, “TelWorx”) to inflate the value of assets that the 
companies sold to PCTEL, Inc. (“PCTEL”), a public company, and its wholly owned subsidiary 
PCTelWorx, Inc. (“PCTelWorx”).  The scheme had two main components:  first, to inflate the value 
of inventory and to prematurely recognize revenue prior to the sale in order to fraudulently inflate 
the sale price; and second, to conceal these facts from PCTEL by prematurely recognizing revenue 
after the asset purchase.  Mize, an employee of TelWorx who joined PCTelWorx after the 
acquisition, participated in one of the fraudulent transactions – premature revenue recognition to 
meet a target revenue forecast – that was part of the scheme.     
Respondent 
 
2. Marc J. Mize, age 43, is a resident of High Point, North Carolina.  From July 2012, 
until January 2013, he was the Senior Vice President of Sales and Tech Services of PCTelWorx.   
Other Relevant Entities And Individuals 
 
3. PCTEL, Inc. is a Delaware corporation with its principal place of business in 
Bloomingdale, Illinois.  The company provides products and services for wireless communication 
networks.  Its stock is traded on the NASDAQ (ticker symbol PCTI). 
4. PCTelWorx, Inc. was a wholly owned subsidiary of PCTEL.  PCTEL merged 
PCTelWorx into PCTEL on June 30, 2014.   
5. The CEO was the owner and CEO of one of the TelWorx companies.  After July 
2012, the CEO was the general manager of PCTelWorx, whose responsibilities included its day-to-
day operations and providing its quarterly revenue forecasts to PCTEL.   
Background 
 
6. In July of 2012, PCTEL and PCTelWorx acquired the assets of TelWorx.  After the 
acquisition, the CEO ran PCTelWorx.  Thereafter, PCTelWorx operated similarly to TelWorx.  
                                                 
1
  The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding.  
 

 
 
3 
7. Prior to the acquisition, Mize was a TelWorx employee.  After the acquisition, he 
became an employee of PCTelWorx.   
8. In the third and fourth quarter of 2012, PCTEL’s publicly filed, consolidated 
financial statements included PCTelWorx’s financial results.   
Revenue Forecasts 
9. Prior to the acquisition, the CEO provided PCTEL and PCTelWorx with TelWorx’s 
revenue forecasts for the second quarter of 2012.  Shortly before the acquisition, PCTEL learned 
that TelWorx did not meet the second quarter 2012 revenue forecast.  This revenue shortfall was 
due, in part, to a large order that a customer (“Customer A”) had postponed until the third quarter of 
2012.   
10. After the acquisition, PCTEL received PCTelWorx’s revenue forecasts from the 
CEO on a quarterly basis.  PCTelWorx employees, including Mize, knew that it was important to 
PCTEL’s business that PCTelWorx meet or exceed the quarterly revenue forecasts it provided to 
PCTEL.   
PCTelWorx Creates A False Order In The Third Quarter To Conceal Revenue Shortfall 
11. Towards the end of the third quarter of 2012, PCTelWorx still had not received the 
large order from Customer A that the CEO forecasted for the third quarter, and the CEO realized 
that PCTelWorx would not meet its quarterly revenue forecast.   
12. The CEO decided to improperly use an intermediate purchaser for Customer A’s 
anticipated order to conceal the revenue forecast shortfall.  The CEO proposed that the intermediate 
purchaser eventually would resell the products to Customer A at a profit.  The CEO planned to offer 
the intermediate purchaser extended payment terms so that it could collect the full purchase price 
from Customer A before having to pay PCTelWorx’s invoice.  The CEO identified a vendor that 
provided services to – but that had not previously purchased a large order from – PCTelWorx (the 
“Vendor”) as a potential intermediate purchaser.   
13. Mize knew that the purpose of this false transaction was to artificially meet 
PCTelWorx’s forecasted third quarter revenue.  At the CEO’s direction, Mize spoke to the Vendor 
about the CEO’s proposal and obtained a purchase order with the same terms as the order that 
PCTelWorx expected eventually to receive from Customer A.   
14. Using the purchase order obtained by Mize, the CEO instructed a PCTelWorx 
employee (“the Employee”) to record the Vendor’s order in PCTelWorx’s books and records and to 
indicate that the order had been shipped to the Vendor and that the Vendor had been invoiced.  
These actions resulted in improper, premature revenue recognition in PCTelWorx’s books and 
records during the third quarter.   

 
 
4 
15. However, PCTelWorx never shipped the products listed on the false order to the 
Vendor, nor did it send the invoice for the false order to the Vendor.  PCTelWorx’s books and 
records indicated that the Vendor’s payment for the products was due and unpaid. 
PCTelWorx Conceals Premature Revenue Recognition By Removing  
A Legitimate Customer Order From Its Books And Records In the Fourth Quarter 
16. Midway through the fourth quarter, Customer A still had not placed the order with 
PCTelWorx expected by the CEO.  In addition, the payment for the false order by the Vendor was 
overdue.  The CEO became concerned that PCTEL would attempt to collect on the overdue invoice 
to the Vendor, detect the false order in its books and records and determine that PCTelWorx had 
recognized revenue prematurely in the third quarter.    
17. The CEO decided to conceal from PCTEL the false third quarter order from Vendor 
B by reversing it from PCTelWorx’s books and records and recording a new false transaction that 
matched an actual purchase order from another PCTelWorx customer (“Customer B”).  According 
to the CEO’s plan, Customer B’s order would be cancelled on PCTelWorx’s books, but Customer B 
would pay for the order placed by Vendor B.     
18. At the CEO’s instruction, Mize contacted the Vendor and obtained a revised, false 
purchase order that was identical to the order that PCTelWorx had received from Customer B.  
Mize knew that the purpose of this transaction was to conceal from PCTEL the false third quarter 
transaction with the Vendor by removing the false transaction from the third quarter from 
PCTelWorx’s books and records and replacing it with a false transaction that would be paid for by 
Customer B in the fourth quarter.   
19. The CEO and Mize, at the CEO’s direction, then instructed the Employee to cancel 
Customer B’s order and to reverse Vendor A’s false order from the third quarter in PCTelWorx’s 
books and records.  The CEO and Mize, at the CEO’s direction, also instructed the Employee to 
enter the Vendor’s revised, false purchase order into PCTelWorx’s books and records.  Ultimately, 
the items supposedly ordered by the Vendor pursuant to the revised, false purchase order were 
shipped to – and paid for – by Customer B.   
20. PCTEL discovered the false entries in PCTelWorx’s books and records.  PCTEL 
issued a Form 8-K/A on March 13, 2013, disclosing these irregularities but did not restate any 
financial information it previously reported.   
Violations 
21. As a result of the conduct described above, Mize violated Section 13(b)(5) of the 
Securities Act which prohibits the knowing falsification of any book, record, or account or 
circumvention of internal controls. 
22. As a result of the conduct described above, Mize caused PCTEL’s violation of 
Section 13(b)(2)(A) of the Exchange Act, which requires Section 12 registrants to make and keep 

 
 
5 
books, records, and accounts that accurately and fairly reflect the transactions and dispositions of 
their assets.   
23. As a result of the conduct described above, Mize violated Rule 13b2-1 of the 
Exchange Act, which prohibits the direct or indirect falsification of any book, record or account 
subject to Section 13(b)(2)(A) of the Exchange Act. 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
A. Pursuant to Section 21C of the Exchange Act, Mize cease and desist from 
committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 13(b)(5) 
of the Exchange Act and Rule 13b2-1 promulgated thereunder.   
B. Mize shall pay civil penalties of $25,000 to the Securities and Exchange 
Commission for transfer to the general fund of the United States Treasury in accordance with 
Exchange Act Section 21F(g)(3).  Payment shall be made in $5,000 installments within 10, 90, 180, 
270, and 360 days of the entry of this order.  If any payment is not made by the date the payment is 
required by this Order, the entire outstanding balance of civil penalties, plus any additional interest 
accrued pursuant to 31 U.S.C. 3717, shall be due and payable immediately, without further 
application.  Payment must be made in one of the following ways:   
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Marc J. Mize as a Respondent in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to:  Paul Montoya, Assistant 

 
 
6 
Regional Director, Chicago Regional Office, Securities and Exchange Commission, 175 W. 
Jackson Blvd., Suite 900, Chicago, Illinois  60604.   
 
V. 
It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 
523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 
Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 
amounts due by Respondent under this Order or any other judgment, order, consent order, decree 
or settlement agreement entered in connection with this proceeding, is a debt for the violation by 
Respondent of the federal securities laws or any regulation or order issued under such laws, as set 
forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 
 
 By the Commission. 
 
 
 
       Brent J. Fields 
       Secretary 
 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 74624 / April 1, 2015 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 3647 / April 1, 2015 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-16469 

 

In the Matter of 

 

MARC J. MIZE, 

 

Respondent. 

 

 

 

 

ORDER INSTITUTING CEASE-AND-DESIST 

PROCEEDINGS, PURSUANT TO SECTION 

21C OF THE SECURITIES EXCHANGE ACT 

OF 1934, MAKING FINDINGS, AND 

IMPOSING A CEASE-AND-DESIST ORDER  

   

 

I. 
 

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

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”) against Marc J. Mize (“Mize” or “Respondent”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over him and the subject matter of these 

proceedings, which are admitted, and except as provided herein in Section V, Respondent consents 

to the entry of this Order Instituting Cease-And-Desist Proceedings, Pursuant to Section 21C Of 

The Securities Exchange Act of 1934, Making Findings, And Imposing A Cease-And-Desist Order 

(“Order”), as set forth below.   

 



 

 2 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that  

Summary 

 

1. This case involves a fraudulent scheme by the owner (the “CEO”) of four private 

telecommunications companies (collectively, “TelWorx”) to inflate the value of assets that the 

companies sold to PCTEL, Inc. (“PCTEL”), a public company, and its wholly owned subsidiary 

PCTelWorx, Inc. (“PCTelWorx”).  The scheme had two main components:  first, to inflate the value 

of inventory and to prematurely recognize revenue prior to the sale in order to fraudulently inflate 

the sale price; and second, to conceal these facts from PCTEL by prematurely recognizing revenue 

after the asset purchase.  Mize, an employee of TelWorx who joined PCTelWorx after the 

acquisition, participated in one of the fraudulent transactions – premature revenue recognition to 

meet a target revenue forecast – that was part of the scheme.     

Respondent 

 

2. Marc J. Mize, age 43, is a resident of High Point, North Carolina.  From July 2012, 

until January 2013, he was the Senior Vice President of Sales and Tech Services of PCTelWorx.   

Other Relevant Entities And Individuals 

 

3. PCTEL, Inc. is a Delaware corporation with its principal place of business in 

Bloomingdale, Illinois.  The company provides products and services for wireless communication 

networks.  Its stock is traded on the NASDAQ (ticker symbol PCTI). 

4. PCTelWorx, Inc. was a wholly owned subsidiary of PCTEL.  PCTEL merged 

PCTelWorx into PCTEL on June 30, 2014.   

5. The CEO was the owner and CEO of one of the TelWorx companies.  After July 

2012, the CEO was the general manager of PCTelWorx, whose responsibilities included its day-to-

day operations and providing its quarterly revenue forecasts to PCTEL.   

Background 

 

6. In July of 2012, PCTEL and PCTelWorx acquired the assets of TelWorx.  After the 

acquisition, the CEO ran PCTelWorx.  Thereafter, PCTelWorx operated similarly to TelWorx.  

                                                 
1
  The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding 

on any other person or entity in this or any other proceeding.  

 



 

 3 

7. Prior to the acquisition, Mize was a TelWorx employee.  After the acquisition, he 

became an employee of PCTelWorx.   

8. In the third and fourth quarter of 2012, PCTEL’s publicly filed, consolidated 

financial statements included PCTelWorx’s financial results.   

Revenue Forecasts 

9. Prior to the acquisition, the CEO provided PCTEL and PCTelWorx with TelWorx’s 

revenue forecasts for the second quarter of 2012.  Shortly before the acquisition, PCTEL learned 

that TelWorx did not meet the second quarter 2012 revenue forecast.  This revenue shortfall was 

due, in part, to a large order that a customer (“Customer A”) had postponed until the third quarter of 

2012.   

10. After the acquisition, PCTEL received PCTelWorx’s revenue forecasts from the 

CEO on a quarterly basis.  PCTelWorx employees, including Mize, knew that it was important to 

PCTEL’s business that PCTelWorx meet or exceed the quarterly revenue forecasts it provided to 

PCTEL.   

PCTelWorx Creates A False Order In The Third Quarter To Conceal Revenue Shortfall 

11. Towards the end of the third quarter of 2012, PCTelWorx still had not received the 

large order from Customer A that the CEO forecasted for the third quarter, and the CEO realized 

that PCTelWorx would not meet its quarterly revenue forecast.   

12. The CEO decided to improperly use an intermediate purchaser for Customer A’s 

anticipated order to conceal the revenue forecast shortfall.  The CEO proposed that the intermediate 

purchaser eventually would resell the products to Customer A at a profit.  The CEO planned to offer 

the intermediate purchaser extended payment terms so that it could collect the full purchase price 

from Customer A before having to pay PCTelWorx’s invoice.  The CEO identified a vendor that 

provided services to – but that had not previously purchased a large order from – PCTelWorx (the 

“Vendor”) as a potential intermediate purchaser.   

13. Mize knew that the purpose of this false transaction was to artificially meet 

PCTelWorx’s forecasted third quarter revenue.  At the CEO’s direction, Mize spoke to the Vendor 

about the CEO’s proposal and obtained a purchase order with the same terms as the order that 

PCTelWorx expected eventually to receive from Customer A.   

14. Using the purchase order obtained by Mize, the CEO instructed a PCTelWorx 

employee (“the Employee”) to record the Vendor’s order in PCTelWorx’s books and records and to 

indicate that the order had been shipped to the Vendor and that the Vendor had been invoiced.  

These actions resulted in improper, premature revenue recognition in PCTelWorx’s books and 

records during the third quarter.   



 

 4 

15. However, PCTelWorx never shipped the products listed on the false order to the 

Vendor, nor did it send the invoice for the false order to the Vendor.  PCTelWorx’s books and 

records indicated that the Vendor’s payment for the products was due and unpaid. 

PCTelWorx Conceals Premature Revenue Recognition By Removing  

A Legitimate Customer Order From Its Books And Records In the Fourth Quarter 

16. Midway through the fourth quarter, Customer A still had not placed the order with 

PCTelWorx expected by the CEO.  In addition, the payment for the false order by the Vendor was 

overdue.  The CEO became concerned that PCTEL would attempt to collect on the overdue invoice 

to the Vendor, detect the false order in its books and records and determine that PCTelWorx had 

recognized revenue prematurely in the third quarter.    

17. The CEO decided to conceal from PCTEL the false third quarter order from Vendor 

B by reversing it from PCTelWorx’s books and records and recording a new false transaction that 

matched an actual purchase order from another PCTelWorx customer (“Customer B”).  According 

to the CEO’s plan, Customer B’s order would be cancelled on PCTelWorx’s books, but Customer B 

would pay for the order placed by Vendor B.     

18. At the CEO’s instruction, Mize contacted the Vendor and obtained a revised, false 

purchase order that was identical to the order that PCTelWorx had received from Customer B.  

Mize knew that the purpose of this transaction was to conceal from PCTEL the false third quarter 

transaction with the Vendor by removing the false transaction from the third quarter from 

PCTelWorx’s books and records and replacing it with a false transaction that would be paid for by 

Customer B in the fourth quarter.   

19. The CEO and Mize, at the CEO’s direction, then instructed the Employee to cancel 

Customer B’s order and to reverse Vendor A’s false order from the third quarter in PCTelWorx’s 

books and records.  The CEO and Mize, at the CEO’s direction, also instructed the Employee to 

enter the Vendor’s revised, false purchase order into PCTelWorx’s books and records.  Ultimately, 

the items supposedly ordered by the Vendor pursuant to the revised, false purchase order were 

shipped to – and paid for – by Customer B.   

20. PCTEL discovered the false entries in PCTelWorx’s books and records.  PCTEL 

issued a Form 8-K/A on March 13, 2013, disclosing these irregularities but did not restate any 

financial information it previously reported.   

Violations 

21. As a result of the conduct described above, Mize violated Section 13(b)(5) of the 

Securities Act which prohibits the knowing falsification of any book, record, or account or 

circumvention of internal controls. 

22. As a result of the conduct described above, Mize caused PCTEL’s violation of 

Section 13(b)(2)(A) of the Exchange Act, which requires Section 12 registrants to make and keep 



 

 5 

books, records, and accounts that accurately and fairly reflect the transactions and dispositions of 

their assets.   

23. As a result of the conduct described above, Mize violated Rule 13b2-1 of the 

Exchange Act, which prohibits the direct or indirect falsification of any book, record or account 

subject to Section 13(b)(2)(A) of the Exchange Act. 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

A. Pursuant to Section 21C of the Exchange Act, Mize cease and desist from 

committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 13(b)(5) 

of the Exchange Act and Rule 13b2-1 promulgated thereunder.   

B. Mize shall pay civil penalties of $25,000 to the Securities and Exchange 

Commission for transfer to the general fund of the United States Treasury in accordance with 

Exchange Act Section 21F(g)(3).  Payment shall be made in $5,000 installments within 10, 90, 180, 

270, and 360 days of the entry of this order.  If any payment is not made by the date the payment is 

required by this Order, the entire outstanding balance of civil penalties, plus any additional interest 

accrued pursuant to 31 U.S.C. 3717, shall be due and payable immediately, without further 

application.  Payment must be made in one of the following ways:   

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Marc J. Mize as a Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to:  Paul Montoya, Assistant 



 

 6 

Regional Director, Chicago Regional Office, Securities and Exchange Commission, 175 W. 

Jackson Blvd., Suite 900, Chicago, Illinois  60604.   

 

V. 

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 

Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 

amounts due by Respondent under this Order or any other judgment, order, consent order, decree 

or settlement agreement entered in connection with this proceeding, is a debt for the violation by 

Respondent of the federal securities laws or any regulation or order issued under such laws, as set 

forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 

 

 By the Commission. 

 

 

 

       Brent J. Fields 

       Secretary