SEC v. Christopher Joseph Bongiorno; and Jason Allan Arthur, No. 1:20-cv-00469, Northern District of Ohio (Mar. 2, 2020) — Complaint

UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF OHIO 
EASTERN DIVISION 
SECURITIES AND EXCHANGE 
COMMISSION, 
Case No.: 1:20-cv-00469 
Plaintiff, 
vs. 
CHRISTOPHER JOSEPH BONGIORNO, 
an individual, and 
JASON ALLAN ARTHUR, an individual; 
Defendants. 
Plaintiff, Securities and Exchange Commission (the "Commission"), alleges as follows: 
SUMMARY OF THE ACTION 
1.
From at least September 2015 through at least November 2018 (the "Relevant
Period"), Christopher Joseph Bongiorno and Jason Allan Arthur (collectively, "Defendants") 
solicited numerous investors throughout the United States to purchase the securities of at least 
two microcap issuers, US Lighting Group, Inc ("USLG") and Petroteq Energy, Inc. ("PQEFF"). 
2.
In connection with their work as securities solicitors, Defendants engaged in fraud
by (1) lying to USLG and investors about their identities; (2) recruiting and paying other 
unregistered individuals to engage in securities solicitations; (3) in the case of Arthur, lying to an 
investor about his compensation; and, (4) in the case of Bongiorno, misappropriating investor 
funds. 
1 
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3. While engaged in this conduct, 
Defendants were 
neither 
registered with the
Commission 
as brokers or dealers nor associated with a broker or dealer registered with the
Commission.
4. 
Defendants received 
transaction
-based 
compensation or 
commissions for their
solicitation activities, which generally amounted to approximately 
40% to 50% 
of 
investment
p
roceeds 
from 
USLG and an average of 39%from PQEFF.
5. In total, Arthur 
received 
transaction
-based 
compensation or 
gross commissions of
at 
least $1,174,057.10 and Bongiorno received at least $2,356,358.91 from USLG 
and 
PQEFF
during the Relevant Period.
6. 
By 
engaging in this conduct, as further described herein, Defendants violated and,
u
nless restrained and enjoined by this Court, may continue to violate Section 17(a) of 
the
Securities Act of 1933 
("Securities Act") [15 U.S.C. § 77q(a)], Sections 
15(a)(1) 
and 10(b) of the
S
ecurities Exchange Act 
of 1934 
("Exchange Act") [15 U.S.C. §§ 78o(a)(1) and 78j(b)] and
E
xchange Act Rule lOb-5 [17 C.F.R. § 240.1Ob-5].
JURISDICTION AND VENUE
7. The Commission 
brings this 
action 
pursuant to Sections 20(b) and 20(d) of the
S
ecurities 
Act [15 
U.S.C. § 77t(b) and (g)] and Sections 21(d) and (e) of the Exchange Act [15
U
.S.C. § 78u(d) and (e)] to enjoin such acts, practices, and courses of business, and to obtain
disgorgement, prejudgment interest, civil money 
penalties, 
and such other and further 
relief as
this Court may deem just and 
appropriate.
8. Defendants were involved 
in 
the 
offer 
and sale of the common stock and/or
w
arrants 
of 
USLG and the common stock of PQEFF, which are each a "security" as 
that 
term 
is
2
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defined under Section 2(a)(1) of 
the Securities Act [15 U.S.C. § 77b(a)(1)] and Section 
3(a)(10)
of 
the Exchange Act [15 U.S.C. § 78c(a)(10)].
9. 
Defendants, directly or indirectly, made use of the 
mails 
or 
the means or
i
nstrumentalities of 
interstate commerce 
in 
connection with the conduct alleged in 
this
C
omplaint.
1
0. This Court has subject matter jurisdiction over 
this 
action 
pursuant to Section 22
o
f 
the Securities 
Act [15 U.S.C. § 
77v], 
Sections 21(d) and 27 of the 
Exchange 
Act 
[15 U.S.C.
§§ 
78u(d) 
and 78aa], and 28 U.S.C. § 1331.
11. 
Venue 
in 
this District is 
proper 
because Defendants are found, 
inhabit, 
and/or
transacted 
business in the Northern District of Ohio, and 
because one 
or 
more acts or transactions
c
onstituting the violations 
occurred 
in 
the 
Northern 
District 
of 
Ohio.
D
EFENDANTS
12. 
Christopher Joseph Bongiorno, born 
1978, is last 
known 
to reside 
in 
Shaker
H
eights, Ohio. Bongiorno asserted 
his 
Fifth Amendment 
privilege. against self-incrimination and
r
efused to testify in connection with 
the Commission's underlying investigation.
13. Jason Allan Arthur, born in 
1977, is last known to reside in Henderson, 
Nevada.
Arthur asserted 
his 
Fifth 
Amendment privilege against self-incrimination 
and refused to testify in
connection with 
the Commission's underlying investigation.
FACTS
A. Arthur 
and Bongiorno use fictitious names in seeking 
engagement from
USLG to sell 
its securities.
14. Beginning in or 
around 
September 
2015, Arthur became involved with 
USLG
after a mutual 
acquaintance introduced 
Arthur 
to USLG's CEO, Paul Spivak 
("Spivak")
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15. 
USLG is a Florida corporation with 
its primary place of business in 
Eastlake,
O
hio. At all relevant 
times, USLG's common stock was .traded on an 
over-the-counter exchange
using the ticker 
"USCG" (and previously 
traded 
under 
the symbol "LXRT")
16. Arthur 
had prior experience in investor 
solicitations, and USCG 
was 
seeking 
to
r
aise capital from new 
investors in both common stock and 
warrants.
1
7. WYien Arthur first 
met Spivak, he introduced himself using 
a fictitious name, Jim
Gates.
18. Arthur, using 
the fictitious name Jim Gates, led 
USCG, through Spivak, to believe
that Arthur had 
the necessary licenses to 
engage 
in 
investor solicitations.
1
9. Arthur 
encouraged 
Spivak 
to research Jim Gates 
online 
using 
the FINRA
B
rokerCheck application, which 
maintains a registry of 
individuals and entities who are licensed
to work in the 
securities industry.
2
0. Spivak did so and 
found records 
for 
someone named Jim 
Gates.
2
1. After doing 
so, USCG, through Spivak, engaged Arthur 
to solicit investors on its
b
ehalf.
22. On 
at least one occasion, Arthur 
also traveled to Ohio to meet with Spivak 
and to
tour 
USLG's 
factory.
2
3. Arthur recruited 
Bongiorno to engage in similar 
activities 
on 
USLG's behalf.
L
ike Arthur, 
Bongiorno introduced himself to USCG, through Spivak, using 
the 
fictitious 
name
John Powers in order 
to lead it to believe that 
Bongiorno was currently a 
licensed broker and
directing 
Spivak to research John 
Powers online using FINRA BrokerCheck.
L~
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B. 
Arthur and 
Bongiorno solicit 
investors to purchase 
USLG securities.
24. 
Using 
leads that 
theygenerated through a 
website, among other 
sources, Arthur
and 
Bongiorno began 
to cold call the 
leads 
to 
solicit prospective 
investors.
25. 
Arthur and 
Bongiorno 
introduced themselves to 
prospective investors using 
their
f
ictitious 
names 
(Jim 
Gates and John 
Powers) and 
pitched the 
prospective investors on the 
value
of 
investing in USLG.
26. 
Arthur and 
Bongiorno often 
promoted the value of an 
investment in 
USLG by
telling 
prospective 
investors that 
USLG made LED lighting 
that cost less to 
produce and/or 
used
l
ess electricity 
than standard 
light bulbs.
2
7. When 
prospective 
investors expressed an interest 
in purchasing 
USLG securities,
A
rt
hur 
or 
Bongiorno sent them subscription 
agreements and promotional 
materials such 
as recent
p
ress releases 
and instructed 
investors to send their 
subscription 
agreements and 
investment
funds directly 
to 
USLG.
2
8. Arthur or 
Bongiorno would then 
notify 
USLG to claim their 
respective
r
esponsibility for 
soliciting the 
investments for 
purposes of receiving 
transaction-based
compensation or 
commissions. 
For 
their role as investor 
solicitors, 
USLG paid Arthur 
and
B
ongiorno transaction
-based compensation or 
commissions averaging 
40% to 
50% 
of 
investor
p
roceeds.
29. For 
example, with 
respect to one investor fr
om Mosinee, 
Wisconsin, 
Bongiorno,
using the 
name John 
Powers, cold called the investor, 
told the investor 
about USLG, 
and said
t
hat the value of 
USLG shares was about to 
increase. Based on 
these and other 
representations,
t
he investor 
purchased a total of 
69,000 shares of USLG for 
a 
total 
investment of $23,500 made
between November 14, 
2016 and 
January 29, 2019.
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30. As another 
example, in the case of one 
Fort 
Worth, 
Texas investor, Arthur, using
the 
fictitious name Jim Gates, cold
-called the 
investor 
and told him 
that USLG manufactured
l
ong-lasting 
lightbulbs and that the company was going 
to expand.
31. Arthur 
also told the Fort Worth, Texas investor 
that USLG paid him 
a 
fl
at 
salary
and that 
he would not receive any 
commissions on the 
investor's investments.
32. 
Based on Arthur's 
representations, the Fort Worth, 
Texas 
investor 
purchased a
total of 
25,000 shares of 
USLG for $12,500 between 
two separate investments 
made 
in or 
around
September 
2016 and October 
2016.
33. In reality, 
Arthur was not paid salary 
but instead received transaction
-based
compensation for 
this investment. Through 
these means, Arthur 
obtained money 
fr
om at least
one investor 
by means of 
these misrepresentations and 
omissions, 
which 
he made knowingly or
with 
severe 
recklessness. 
A 
reasonable investor would 
have considered the 
misstatements and
omissions 
about Arthur's true compensation 
arrangements and use of investor 
funds in deciding
whether to 
invest.
C. 
Arthur and 
Bongiorno solicit investors to 
purchase PQEFF securities.
3
4. 
Arthur 
and Bongiorno were also hired by PQEFF 
to engage in similar investor
solicitation 
activities as part of a securities offering 
conducted by PQEFF.
35. 
PQEFF is a Canadian 
corporation headquartered in Sherman 
Oaks, California. At
all 
relevant times, 
PQEFF's 
common 
stock was traded on an 
over-the-counter exchange using
t
he ticker "PQEFF."
36. 
As with USLG, Arthur 
and Bongiorno, operating under their 
fictitious names,
engaged in 
cold-call 
solicitations 
of 
prospective PQEFF investors and 
pitched them on the value
of an 
investment in PQEFF.
C
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37. When 
solicited prospects decided to invest in PQEFF, Arthur 
and Bongiorno sent
them subscription 
agreements 
and instructed them 
as to how to make their PQEFF 
investments.
38. For 
example, Bongiorno told the Mosinee, Wisconsin, 
investor over the 
phone
t
hat PQEFF had 
developed acost-efficient process to extract oil from 
reclaimed oil sands, which
w
ould translate into a high 
rate 
of return on an 
investment. Based on 
these and other
r
epresentations, the investor purchased a total of 
$15,000 
in 
PQEFF stock in two 
separate
purchases made in or 
around January 2017 and November 2017.
3
9. Generally, the investors who Arthur 
and Bongiorno solicited sent their 
funds
directly 
to PQEFF; however, in 
at least two instances, Bongiorno 
directed investors to send their
i
nvestment 
funds to North Star Assets LLC, an entity 
that Bongiorno controls.
4
0. Specifically, in or around November 
28, 2017, pursuant to 
Bongiorno's direction,
t
he Mosinee, Wisconsin investor 
sent a check in the amount of $5,000 
to North Star Assets LLC.
41. In or 
around December 7, 2017, pursuant 
to Bongiorno's direction, an investor
from 
Oakley, California sent a check in the amount of 
$25,000 to North Star 
Assets LLC.
42. 
Financial 
records demonstrate no subsequent transfer of 
funds 
from 
North Star
A
ssets LLC to PQEFF, 
but instead show that the funds were then 
transferred elsewhere,
i
ncluding to 
Bongiorno's wife, to other entities Bongiorno 
controls, and to Arthur. Further,
PQEFF transfer 
agent records likewise do not reflect any 
issuance 
of 
PQEFF 
shares to 
either
investor 
at 
or 
around the time that North Star 
Assets LLC received the 
funds 
from 
those
i
nvestors.
43. 
Through these means, Bongiorno 
obtained money, at least $30,000 from
i
nvestors, by means of 
misrepresentations and omissions. Bongiorno failed 
to disclose that he
i
ntended to and did use investor 
funds 
for 
other things than investments in PQEFF. 
Bongiorno
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made these misrepresentations and omissions 
knowingly 
or with severe recklessness. A
reasonable investor 
would have considered Bongiorno's misstatements 
and 
omissions about the
use of investor funds important in deciding whether to invest.
44. 
For their role as investor solicitors, PQEFF paid Arthur and Bongiorno
transaction
-based compensation or commissions 
averaging 
39% 
of investor 
proceeds.
45. In total, 
by means 
of their investor solicitation 
activities 
on behalf of 
USLG and
PQEFF, 
Arthur and Bongiorno received transaction-based compensation or gross commissions
totaling at least 
$1,174,057.10 and 
$2,356,358.91, respectively.
4
6. By using fictitious names, Arthur and Bongiorno knowingly or with severe
r
ecklessness made material misrepresentations and omissions to USLG and investors. A
reasonable investor 
would have considered the misstatements and omissions about their true
i
dentities important in deciding whether to invest, particularly where, unlike their assumed
i
dentities, Arthur and Bongiorno were not licensed to engage in securities solicitations and were
neither registered with 
the 
Commission 
as brokers 
or 
dealers 
nor 
associated 
with 
a 
broker or
dealer 
registered 
with 
the 
Commission.
D. 
Arthur and Bongiorno hire others to work below them to solicit investors.
4
7. In addition to their own selling efforts, Arthur and Bongiorno also hired several
other individuals 
to 
work below them 
to solicit investors to 
purchase 
securities.
4
8. To find solicitors to hire, Bongiorno posted various Craigslist advertisements
including 
one example that, was posted on or around October 17, 2017, recruiting "seasoned
closers" with "experience in private 
equity, PPMs."
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49. As another example, Arthur posted a Craigslist advertisement on or around
January 3, 
2017, 
"looking 
for OPENERS" and 
touting 
that "[w]e provide 
an 
Online 
CRM1 FULL
of leads."
50. When applicable, Arthur and Bongiorno paid a portion of their transaction-based
compensation or 
commissions to the solicitors 
working 
below 
them 
via checks, wires, and/or
interbank transfers.
FIRST CLAIM FOR RELIEF
Violations of Section 15(a)(1) of the 
Exchange Act 
[15 
U.S.C. § 
78o(a)(1)]
(Against each Defendant)
51. 
The 
Commission 
re-alleges 
and 
incorporates by reference 
each 
and every
allegation in 
paragraphs 1-50, inclusive, as if they were fully set forth herein.
52. By engaging in the conduct described above, Defendants:
a. 
engaged 
in the 
business 
of effecting 
transactions 
in 
securities 
for 
the
account of 
others; and
b. directly or indirectly, made use of the mails or the means or
i
nstrumentalities of interstate commerce to effect transactions in, or to induce or attempt 
to
induce the purchase or sale of, 
securities 
without being 
registered as a 
broker or dealer with 
the
Commission or 
associated 
with 
a 
broker or dealer 
registered 
with 
the Commission.
53. By reason of the foregoing, Defendant violated and, unless enjoined, will continue
to violate Sections 15(a)(1) of the Exchange Act [15 
U.S.C. § 
78o(a)(1)].
The Commission understands CRM 
to 
be an acronym for "customer relationship management" and to be a
reference to software used to manage leads.
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SECOND CLAIM FOR RELIEF
Violations of Section 17(a) of the Securities Act [15 
U.S.C. § 77q(a)]
(Against each Defendant)
54. 
The Commission re-alleges and incorporates by reference each and every
allegation in 
paragraphs 1-50, inclusive, as 
if they 
were 
fully 
set 
forth herein.
55. By engaging in the conduct described above, 
Defendants, 
directly or indirectly,
individually or 
in concert with others, in the offer and sale of securities, by use of the means and
instruments of transportation 
and 
communication in 
interstate commerce or by use of the mails
h
as (a) employed devices, schemes, or artifices to defraud; (b) obtained money or property by
means of untrue 
statements 
of material fact or 
omissions to state 
material 
facts necessary in 
order
to make the 
statements made, in light 
of 
the circumstances under which they were made, not
m
isleading; and (c) engaged in transactions, practices, or courses of 
business 
which 
operated 
or
would operate as a 
fraud 
or 
deceit.
5
6. 
With 
respect to violations 
of 
Sections 17(a)(2) and 17(a)(3) of the Securities Act,
D
efendants were at least negligent in their conduct and in the untrue and misleading statements
alleged herein.
57. With respect 
to violations 
of Section 17(a)(1) of 
the Securities Act, Defendants
engaged in the above
-referenced conduct 
knowingly or 
with sever recklessness.
58. 
By 
reason of the foregoing, Defendants violated and, unless enjoined, will
continue to violate Section 17(aj of the Securities Act 
[15 U.S.C. § 77q(a)].
THIRD CLAIM FOR 
RELIEF
V
iolations of Section 10(b) of the Exchange Act [15 
U.S.C. § 78j(b)] 
and 
Exchange Act Rule
lOb-5 [17 
C.F.R. § 
240.1Ob-5]
(Against each 
Defendant)
59. The 
Commission re-alleges and incorporates by reference each and every
allegation in 
paragraphs 1-50, inclusive, as 
if 
they were fully set forth herein.
10
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60. By 
engaging in the conduct 
described above, Defendants, directly or indirectly,
i
ndividually or in 
concert 
with 
others, in connection with the 
purchase or sale of securities, by
use of 
the means and 
instrumentalities 
of 
interstate commerce or by 
use 
of 
the mails has (a)
employed 
devices, schemes, and 
artifices 
to 
defraud; (b) made untrue 
statements 
of material 
facts
o
r 
omitted to 
state material facts necessary in order 
to make the statements made, in light of the
c
ircumstances under which 
they were made, not misleading; and (c) 
engaged in acts, practices,
and 
course of business which 
operated as a 
fr
aud and deceit upon 
purchasers, prospective
purchasers, and other 
persons.
61. 
Defendants engaged in the 
above-referenced conduct and made the 
above-
referenced untrue and misleading 
statements knowingly or with severe 
recklessness.
62. By reason 
of the foregoing, Defendants 
violated and, unless enjoined, will
continue 
to violate Section 10(b) of the Exchange 
Act [15 U.S.C. § 78j(b)] 
and Exchange Act
R
ule lOb-5 [17 C.F.R. § 
240.1Ob-5].
PRAYER FOR RELIEF
WHEREFORE, 
the Commission respectfully 
requests that this Court enter a final
j
udgment:
I.
P
ermanently restraining 
and 
enjoining 
Defendants 
from, directly or 
indirectly, engaging
i
n conduct in violation of 
Section 17(a) of the 
Securities Act [15 U.S.C. § 77q(a)], 
Sections 10(b)
and 15(a)(1) of 
the Exchange Act 
[15 
U.S.C. §§ 
78j(b), 78o(a)(1)], and 
Exchange Act Rule lOb-
5 
[17 C.F.R. § 240.1Ob-5];
11
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II.
Permanently 
restraining and enjoining 
Defendants 
from 
directly or indirectly, including,
b
ut 
not limited to, through any 
entity owned or controlled any of 
them, soliciting any person or
entity 
to purchase or sell any security;
III.
Ordering 
Defendants to disgorge all ill-gotten 
gains 
or 
unjust enrichment derived from
t
he activities set forth in 
this Complaint, together with prejudgment 
interest 
thereon;
IV.
Ordering 
Defendants to pay a civil penalty pursuant to Section 
21(d)(3) 
of 
the Exchange
Act [15 
U.S.C. § 78u(d)(3)] and Section 20(d) of the 
Securities Act [15 U.S.C. § 77t(d)];
V.
R
etaining jurisdiction of 
this action in accordance with the 
principles 
of 
equity and the
F
ederal Rules of Civil 
Procedure in order to implement and carry 
out the terms of all orders and
d
ecrees that 
may 
be entered, or to entertain any 
suitable application or motion for additional
relief within 
the jurisdiction. of this Court; 
and,
VI.
Granting such other 
and further relief as this 
Court may 
deem 
just, equitable, or necessary
in connection with 
the enforcement of the federal 
securities laws and for the protection of
i
nvestors.
12
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Dated: February 28, 2020.
Respectfully 
submitted,
S
ECURITIES 
AND 
EXCHANGE COMMISSION
~~LUd~
David D. Whipple tah State Bar No. 
17347)
[email protected]
Amy 
J. 
Oliver (Utah 
State Bar No. 8785)
[email protected]
COUNSEL FOR PLAINTIFF
Securities and Exchange Commission
351 South West 
Temple, Suite 6.100
Salt Lake City, UT 84101-1950
Tel.: (.801) 
524-5796
Fax: (801) 
524-3558
1
3
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UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF OHIO 

EASTERN DIVISION 

SECURITIES AND EXCHANGE 

COMMISSION, 

Case No.: 1:20-cv-00469 

Plaintiff, 
vs. 

CHRISTOPHER JOSEPH BONGIORNO, 

an individual, and 
JASON ALLAN ARTHUR, an individual; 

Defendants. 

Plaintiff, Securities and Exchange Commission (the "Commission"), alleges as follows: 

SUMMARY OF THE ACTION 

1. From at least September 2015 through at least November 2018 (the "Relevant

Period"), Christopher Joseph Bongiorno and Jason Allan Arthur (collectively, "Defendants") 

solicited numerous investors throughout the United States to purchase the securities of at least 

two microcap issuers, US Lighting Group, Inc ("USLG") and Petroteq Energy, Inc. ("PQEFF"). 

2. In connection with their work as securities solicitors, Defendants engaged in fraud

by (1) lying to USLG and investors about their identities; (2) recruiting and paying other 

unregistered individuals to engage in securities solicitations; (3) in the case of Arthur, lying to an 

investor about his compensation; and, (4) in the case of Bongiorno, misappropriating investor 

funds. 

1 

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3. While engaged in this conduct, Defendants were neither registered with the

Commission as brokers or dealers nor associated with a broker or dealer registered with the

Commission.

4. Defendants received transaction-based compensation or commissions for their

solicitation activities, which generally amounted to approximately 40% to 50% of investment

proceeds from USLG and an average of 39%from PQEFF.

5. In total, Arthur received transaction-based compensation or gross commissions of

at least $1,174,057.10 and Bongiorno received at least $2,356,358.91 from USLG and PQEFF

during the Relevant Period.

6. By engaging in this conduct, as further described herein, Defendants violated and,

unless restrained and enjoined by this Court, may continue to violate Section 17(a) of the

Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77q(a)], Sections 15(a)(1) and 10(b) of the

Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78o(a)(1) and 78j(b)] and

Exchange Act Rule lOb-5 [17 C.F.R. § 240.1Ob-5].

JURISDICTION AND VENUE

7. The Commission brings this action pursuant to Sections 20(b) and 20(d) of the

Securities Act [15 U.S.C. § 77t(b) and (g)] and Sections 21(d) and (e) of the Exchange Act [15

U.S.C. § 78u(d) and (e)] to enjoin such acts, practices, and courses of business, and to obtain

disgorgement, prejudgment interest, civil money penalties, and such other and further relief as

this Court may deem just and appropriate.

8. Defendants were involved in the offer and sale of the common stock and/or

warrants of USLG and the common stock of PQEFF, which are each a "security" as that term is

2

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defined under Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)] and Section 3(a)(10)

of the Exchange Act [15 U.S.C. § 78c(a)(10)].

9. Defendants, directly or indirectly, made use of the mails or the means or

instrumentalities of interstate commerce in connection with the conduct alleged in this

Complaint.

10. This Court has subject matter jurisdiction over this action pursuant to Section 22

of the Securities Act [15 U.S.C. § 77v], Sections 21(d) and 27 of the Exchange Act [15 U.S.C.

§§ 78u(d) and 78aa], and 28 U.S.C. § 1331.

11. Venue in this District is proper because Defendants are found, inhabit, and/or

transacted business in the Northern District of Ohio, and because one or more acts or transactions

constituting the violations occurred in the Northern District of Ohio.

DEFENDANTS

12. Christopher Joseph Bongiorno, born 1978, is last known to reside in Shaker

Heights, Ohio. Bongiorno asserted his Fifth Amendment privilege. against self-incrimination and

refused to testify in connection with the Commission's underlying investigation.

13. Jason Allan Arthur, born in 1977, is last known to reside in Henderson, Nevada.

Arthur asserted his Fifth Amendment privilege against self-incrimination and refused to testify in

connection with the Commission's underlying investigation.

FACTS

A. Arthur and Bongiorno use fictitious names in seeking engagement from
USLG to sell its securities.

14. Beginning in or around September 2015, Arthur became involved with USLG

after a mutual acquaintance introduced Arthur to USLG's CEO, Paul Spivak ("Spivak")

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15. USLG is a Florida corporation with its primary place of business in Eastlake,

Ohio. At all relevant times, USLG's common stock was .traded on an over-the-counter exchange

using the ticker "USCG" (and previously traded under the symbol "LXRT")

16. Arthur had prior experience in investor solicitations, and USCG was seeking to

raise capital from new investors in both common stock and warrants.

17. WYien Arthur first met Spivak, he introduced himself using a fictitious name, Jim

Gates.

18. Arthur, using the fictitious name Jim Gates, led USCG, through Spivak, to believe

that Arthur had the necessary licenses to engage in investor solicitations.

19. Arthur encouraged Spivak to research Jim Gates online using the FINRA

BrokerCheck application, which maintains a registry of individuals and entities who are licensed

to work in the securities industry.

20. Spivak did so and found records for someone named Jim Gates.

21. After doing so, USCG, through Spivak, engaged Arthur to solicit investors on its

behalf.

22. On at least one occasion, Arthur also traveled to Ohio to meet with Spivak and to

tour USLG's factory.

23. Arthur recruited Bongiorno to engage in similar activities on USLG's behalf.

Like Arthur, Bongiorno introduced himself to USCG, through Spivak, using the fictitious name

John Powers in order to lead it to believe that Bongiorno was currently a licensed broker and

directing Spivak to research John Powers online using FINRA BrokerCheck.

L~

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B. Arthur and Bongiorno solicit investors to purchase USLG securities.

24. Using leads that theygenerated through a website, among other sources, Arthur

and Bongiorno began to cold call the leads to solicit prospective investors.

25. Arthur and Bongiorno introduced themselves to prospective investors using their

fictitious names (Jim Gates and John Powers) and pitched the prospective investors on the value

of investing in USLG.

26. Arthur and Bongiorno often promoted the value of an investment in USLG by

telling prospective investors that USLG made LED lighting that cost less to produce and/or used

less electricity than standard light bulbs.

27. When prospective investors expressed an interest in purchasing USLG securities,

Arthur or Bongiorno sent them subscription agreements and promotional materials such as recent

press releases and instructed investors to send their subscription agreements and investment

funds directly to USLG.

28. Arthur or Bongiorno would then notify USLG to claim their respective

responsibility for soliciting the investments for purposes of receiving transaction-based

compensation or commissions. For their role as investor solicitors, USLG paid Arthur and

Bongiorno transaction-based compensation or commissions averaging 40% to 50% of investor

proceeds.

29. For example, with respect to one investor from Mosinee, Wisconsin, Bongiorno,

using the name John Powers, cold called the investor, told the investor about USLG, and said

that the value of USLG shares was about to increase. Based on these and other representations,

the investor purchased a total of 69,000 shares of USLG for a total investment of $23,500 made

between November 14, 2016 and January 29, 2019.

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30. As another example, in the case of one Fort Worth, Texas investor, Arthur, using

the fictitious name Jim Gates, cold-called the investor and told him that USLG manufactured

long-lasting lightbulbs and that the company was going to expand.

31. Arthur also told the Fort Worth, Texas investor that USLG paid him a flat salary

and that he would not receive any commissions on the investor's investments.

32. Based on Arthur's representations, the Fort Worth, Texas investor purchased a

total of 25,000 shares of USLG for $12,500 between two separate investments made in or around

September 2016 and October 2016.

33. In reality, Arthur was not paid salary but instead received transaction-based

compensation for this investment. Through these means, Arthur obtained money from at least

one investor by means of these misrepresentations and omissions, which he made knowingly or

with severe recklessness. A reasonable investor would have considered the misstatements and

omissions about Arthur's true compensation arrangements and use of investor funds in deciding

whether to invest.

C. Arthur and Bongiorno solicit investors to purchase PQEFF securities.

34. Arthur and Bongiorno were also hired by PQEFF to engage in similar investor

solicitation activities as part of a securities offering conducted by PQEFF.

35. PQEFF is a Canadian corporation headquartered in Sherman Oaks, California. At

all relevant times, PQEFF's common stock was traded on an over-the-counter exchange using

the ticker "PQEFF."

36. As with USLG, Arthur and Bongiorno, operating under their fictitious names,

engaged in cold-call solicitations of prospective PQEFF investors and pitched them on the value

of an investment in PQEFF.

C

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37. When solicited prospects decided to invest in PQEFF, Arthur and Bongiorno sent

them subscription agreements and instructed them as to how to make their PQEFF investments.

38. For example, Bongiorno told the Mosinee, Wisconsin, investor over the phone

that PQEFF had developed acost-efficient process to extract oil from reclaimed oil sands, which

would translate into a high rate of return on an investment. Based on these and other

representations, the investor purchased a total of $15,000 in PQEFF stock in two separate

purchases made in or around January 2017 and November 2017.

39. Generally, the investors who Arthur and Bongiorno solicited sent their funds

directly to PQEFF; however, in at least two instances, Bongiorno directed investors to send their

investment funds to North Star Assets LLC, an entity that Bongiorno controls.

40. Specifically, in or around November 28, 2017, pursuant to Bongiorno's direction,

the Mosinee, Wisconsin investor sent a check in the amount of $5,000 to North Star Assets LLC.

41. In or around December 7, 2017, pursuant to Bongiorno's direction, an investor

from Oakley, California sent a check in the amount of $25,000 to North Star Assets LLC.

42. Financial records demonstrate no subsequent transfer of funds from North Star

Assets LLC to PQEFF, but instead show that the funds were then transferred elsewhere,

including to Bongiorno's wife, to other entities Bongiorno controls, and to Arthur. Further,

PQEFF transfer agent records likewise do not reflect any issuance of PQEFF shares to either

investor at or around the time that North Star Assets LLC received the funds from those

investors.

43. Through these means, Bongiorno obtained money, at least $30,000 from

investors, by means of misrepresentations and omissions. Bongiorno failed to disclose that he

intended to and did use investor funds for other things than investments in PQEFF. Bongiorno

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made these misrepresentations and omissions knowingly or with severe recklessness. A

reasonable investor would have considered Bongiorno's misstatements and omissions about the

use of investor funds important in deciding whether to invest.

44. For their role as investor solicitors, PQEFF paid Arthur and Bongiorno

transaction-based compensation or commissions averaging 39% of investor proceeds.

45. In total, by means of their investor solicitation activities on behalf of USLG and

PQEFF, Arthur and Bongiorno received transaction-based compensation or gross commissions

totaling at least $1,174,057.10 and $2,356,358.91, respectively.

46. By using fictitious names, Arthur and Bongiorno knowingly or with severe

recklessness made material misrepresentations and omissions to USLG and investors. A

reasonable investor would have considered the misstatements and omissions about their true

identities important in deciding whether to invest, particularly where, unlike their assumed

identities, Arthur and Bongiorno were not licensed to engage in securities solicitations and were

neither registered with the Commission as brokers or dealers nor associated with a broker or

dealer registered with the Commission.

D. Arthur and Bongiorno hire others to work below them to solicit investors.

47. In addition to their own selling efforts, Arthur and Bongiorno also hired several

other individuals to work below them to solicit investors to purchase securities.

48. To find solicitors to hire, Bongiorno posted various Craigslist advertisements

including one example that, was posted on or around October 17, 2017, recruiting "seasoned

closers" with "experience in private equity, PPMs."

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49. As another example, Arthur posted a Craigslist advertisement on or around

January 3, 2017, "looking for OPENERS" and touting that "[w]e provide an Online CRM1 FULL

of leads."

50. When applicable, Arthur and Bongiorno paid a portion of their transaction-based

compensation or commissions to the solicitors working below them via checks, wires, and/or

interbank transfers.

FIRST CLAIM FOR RELIEF
Violations of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]

(Against each Defendant)

51. The Commission re-alleges and incorporates by reference each and every

allegation in paragraphs 1-50, inclusive, as if they were fully set forth herein.

52. By engaging in the conduct described above, Defendants:

a. engaged in the business of effecting transactions in securities for the

account of others; and

b. directly or indirectly, made use of the mails or the means or

instrumentalities of interstate commerce to effect transactions in, or to induce or attempt to

induce the purchase or sale of, securities without being registered as a broker or dealer with the

Commission or associated with a broker or dealer registered with the Commission.

53. By reason of the foregoing, Defendant violated and, unless enjoined, will continue

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

The Commission understands CRM to be an acronym for "customer relationship management" and to be a
reference to software used to manage leads.

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SECOND CLAIM FOR RELIEF
Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]

(Against each Defendant)

54. The Commission re-alleges and incorporates by reference each and every

allegation in paragraphs 1-50, inclusive, as if they were fully set forth herein.

55. By engaging in the conduct described above, Defendants, directly or indirectly,

individually or in concert with others, in the offer and sale of securities, by use of the means and

instruments of transportation and communication in interstate commerce or by use of the mails

has (a) employed devices, schemes, or artifices to defraud; (b) obtained money or property by

means of untrue statements of material fact or omissions to state material facts necessary in order

to make the statements made, in light of the circumstances under which they were made, not

misleading; and (c) engaged in transactions, practices, or courses of business which operated or

would operate as a fraud or deceit.

56. With respect to violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act,

Defendants were at least negligent in their conduct and in the untrue and misleading statements

alleged herein.

57. With respect to violations of Section 17(a)(1) of the Securities Act, Defendants

engaged in the above-referenced conduct knowingly or with sever recklessness.

58. By reason of the foregoing, Defendants violated and, unless enjoined, will

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

THIRD CLAIM FOR RELIEF
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Exchange Act Rule

lOb-5 [17 C.F.R. § 240.1Ob-5]
(Against each Defendant)

59. The Commission re-alleges and incorporates by reference each and every

allegation in paragraphs 1-50, inclusive, as if they were fully set forth herein.

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60. By engaging in the conduct described above, Defendants, directly or indirectly,

individually or in concert with others, in connection with the purchase or sale of securities, by

use of the means and instrumentalities of interstate commerce or by use of the mails has (a)

employed devices, schemes, and 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 under which they were made, not misleading; and (c) engaged in acts, practices,

and course of business which operated as a fraud and deceit upon purchasers, prospective

purchasers, and other persons.

61. Defendants engaged in the above-referenced conduct and made the above-

referenced untrue and misleading statements knowingly or with severe recklessness.

62. By reason of the foregoing, Defendants violated and, unless enjoined, will

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

Rule lOb-5 [17 C.F.R. § 240.1Ob-5].

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that this Court enter a final

judgment:

I.

Permanently restraining and enjoining Defendants from, directly or indirectly, engaging

in conduct in violation of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], Sections 10(b)

and 15(a)(1) of the Exchange Act [15 U.S.C. §§ 78j(b), 78o(a)(1)], and Exchange Act Rule lOb-

5 [17 C.F.R. § 240.1Ob-5];

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II.

Permanently restraining and enjoining Defendants from directly or indirectly, including,

but not limited to, through any entity owned or controlled any of them, soliciting any person or

entity to purchase or sell any security;

III.

Ordering Defendants to disgorge all ill-gotten gains or unjust enrichment derived from

the activities set forth in this Complaint, together with prejudgment interest thereon;

IV.

Ordering Defendants to pay a civil penalty pursuant to Section 21(d)(3) of the Exchange

Act [15 U.S.C. § 78u(d)(3)] and Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)];

V.

Retaining jurisdiction of this action in accordance with the principles of equity and the

Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and

decrees that may be entered, or to entertain any suitable application or motion for additional

relief within the jurisdiction. of this Court; and,

VI.

Granting such other and further relief as this Court may deem just, equitable, or necessary

in connection with the enforcement of the federal securities laws and for the protection of

investors.

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Dated: February 28, 2020.

Respectfully submitted,

SECURITIES AND EXCHANGE COMMISSION

~~LUd~
David D. Whipple tah State Bar No. 17347)
[email protected]
Amy J. Oliver (Utah State Bar No. 8785)
[email protected]

COUNSEL FOR PLAINTIFF
Securities and Exchange Commission
351 South West Temple, Suite 6.100
Salt Lake City, UT 84101-1950
Tel.: (.801) 524-5796
Fax: (801) 524-3558

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