SEC v. NANOTECH ENGINEERING, INC.; MICHAEL JAMES SWEANEY; DAVID SWEANEY; JEFFERY GANGE; NANOTECH FINANCE LLC; OM1VI GOLF, LLC, et al., No. 1:19-cv-03633, District of Columbia (Dec. 11, 2019) — Complaint

Counsel
of
Record
G
regory
Bockin
C
hristopher
Bruckmann
P
ei
Chung
E
lizabeth
Doisy
U
.S.
Securities
and
Exchange
Commission
1
00
F
Street,
N.E.
W
ashington,
DC
20549
T
:
202-551-5984
UNITED
STATES
DISTRICT
COURT
F
OR
THE
DISTRICT
OF
COLUMBIA
U
NITED
STATES
SECURITIES
A
ND
EXCHANGE
COMMISSION,
1
00
F
Street,
N.E.
W
ashington,
DC
20549
P
laintiff,
v
.
N
ANOTECH
ENGINEERING,
INC.,
2
601
Main
Street,
Suite
370
I
rvine,
CA
92614
M
ICHAEL
JAMES
SWEANEY
(also
k
nown
as
Michael
Hatton),
2
555
Main
Street,
Apt.
3050
I
rvine,
CA
92614
D
AVID
SWEANEY,
2
649
Bison
Road
F
ort
Collins,
CO
80525
a
nd
JEFFERY
GANGE,
3
3
Elizabeth
Lane
I
rvine,
CA
92602
D
efendants,
a
nd
N
ANOTECH
FINANCE
LLC,
3
3
Elizabeth
Lane
Case
No.

Irvine,
CA
92602
O
M1VI
GOLF,
LLC,
33
Elizabeth
Lane
I
rvine,
CA
92602
a
nd
3
DRAGONS
LLC,
2
649
Bison
Road
F
ort
Collins,
CO
80525
R
elief
Defendants.
COMPLAINT
P
laintiff
United
States
Securities
and
Exchange
Commission
("SEC")
alleges
a
s
follows:
SUMMARY
1
.
This
is
an
emergency
action
seeking
to,
inter
alia,
freeze
funds
held
by
t
he
Defendants
and
Relief
Defendants
so
that
the
Defendants,
who
are
presently
p
erpetrating
an
ongoing
securities
fraud,
cannot
abscond
with,
transfer,
convert,
or
f
urther
dissipate
assets
received
from,
and
rightfully
belonging
to,
more
than
one
h
undred
investor
-victims.
2
.
As
set
forth
below,
convicted
securities
fraudster
Michael
James
S
weaney
("Michael
Sweaney")
and
the
other
Defendants
are
engaged
in
an
ongoing
f
raudulent
offering
of
the
securities
of
Nanotech
Engineering,
Inc.
("Nanotech")
O
ver
the
last
two
,y
ears,
the
Defendants
and
others
have
solicited
more
than
$9.4
m
illion
in
investments
from
more
than
one
hundred
people
through
deceptive
acts,
i
ncluding
misrepresenting
and
omitting
material
facts
in
filings
with
the
SEC
and
i
n
private
placement
memoranda
("PPM(s)").
The
Defendants'
deceptive
conduct
h
as
concealed
from
investors
not
only
Michael
Sweaney's
prior
criminal
conviction,

but
also
the
misappropriation
of
more
than
$2.4
million
in
investor
funds
by
the
D
efendants
—including
the
Defendants'
purchases
of
a
yacht,
several
sports
cars,
a
nd
cosmetic
surgery.
3
.
Starting
on
approximately
September
15,
2017
and
continuing
through
t
he
present,
Defendant
Michael
Sweaney,
masquerading
under
the
pseudonym
"
Michael
Hatton,"
served
as
Chief
Financial
Officer
of
Nanotech,
while
his
nephew,
D
efendant
David
Sweaney,
served
as
Chief
Executive
Officer,
and
Defendant
J
effery
Gange
("Gange")
served
as
Chief
Operations
Officer.
During
this
time,
N
anotech
employees
were
pressured
to,
and
did,
cold
-call
potential
investors
from
A
laska
to
Florida,
many
of
whom
purchased
Nanotech
shares.
4
.
Nanotech
filed
three
separate
Forms
D
with
the
SEC
asserting
that
t
his
offering
of
shares
was
exempt
from
the
registration
requirements
of
the
S
ecurities
Act
of
1933
("Securities
Act").
Those
Forms
D
contained
multiple
m
isrepresentations
and
omissions
of
material
facts,
including:
(a)
the
failure
to
d
isclose
Michael
Sweaney's
role
with
the
company
and
thereby
omitting
the
fact
t
hat
he
had
previously
been
convicted
of
felony
securities
fr
aud,
(b)
the
false
s
tatements
that
Nanotech's
executive
officers,
including
the
Defendants,
would
r
eceive
only
$15
of
investor
funds
when
the
Defendants
had,
in
fact,
directly
and
i
ndirectly,
received
more
than
$900,000
by
the
time
the
most
recent
Form
D
was
f
iled,
and
(c)
misrepresentations
regarding
amount
of
investor
money
that
would
be
u
sed
to
pay
commissions
to
Nanotech
employees
for
convincing
victims
to
invest.
3

5.
Nanotech,
a
Delaware
Corporation
with
operations
in
Colorado
and
C
alifornia,
employed
numerous
"sales
agents"
(actually
unlicensed
stockbrokers
b
eing
paid
on
a
commission
basis)
in
a
"boiler
-room"
-type
environment.
These
sales
a
gents
cold
-called
potential
investors
across
the
country.
Investors
were
convinced
t
o
invest
by
dubious
claims
of
apatent-pending
invention
that
would
change
the
w
orld:
the
allegedly
revolutionary
"Nanopanel"
solar
panel.
As
stated
in
Nanotech's
P
PM:
Solar
panels
need
no
longer
be
large,
heavy,
fragile,
expensive
to
m
anufacture
and
install,
with
only
20%
efficiency.
Nanotech
E
ngineering
has
invented
what
we
believe
to
be
the
last
generation
S
olar
Panel,
thin,
lightweight,
stronger
than
steel,
yet
fl
exible
and
t
hree
to
four
times
more
efficient
..
.Also,
our
panels
will
allow
the
use
o
f
solar
in
parts
of
the
world
that
would
otherwise
not
use
solar
due
to
a
lack
of
sunny
weather.
Even
if
a
customer
is
only
getting
40%
e
fficiency
in
a
non
-sunny
part
of
the
world,
that
is
still
double
that
of
t
raditional
panels.
6
.
Potential
investors
were
provided
with
a
PPM,
and
if
they
decided
to
i
nvest,
a
subscription
agreement,
which
outlined
the
terms
of
the
investment.
7
.
Nanotech's
website,
www.nanotechengineeringinc.com,
has
this
PPM
a
vailable
for
potential
investors
to
download.
The
PPM
on
Nanotech's
website
also
c
ontains
multiple
material
misrepresentations
and
omissions,
including
(a)
falsely
i
dentifying
Nanotech's
CFO
(Michael
Sweaney)
as
"Michael
Hatton,"
(b)
misleading
i
nvestors
about
the
fact
that
investor
money
would
be
diverted
to
other
entities
in
w
hich
the
Defendants
and/or other
Nanotech
employees
had
an
interest,
and
(c)
m
isleading
investors
about
the
fact
that
Michael
Sweaney,
David
Sweaney,
and
G
ange
were
misappropriating
investor
money
from
Nanotech
for
their
personal
use.

8.
As
of
December
4,
2019,
Nanotech's
website
continues
to
operate
and
N
anotech
continues
to
solicit
additional
investor
funds.
9
.
By
knowingly
or
recklessly
engaging
in
the
conduct
described
in
this
C
omplaint,
the
Defendants
violated,
and
unless
enjoined
will
continue
to
violate,
S
ection
17(a)
of
the
Securities,
and
Section
10(b)
of
the
Securities
Exchange
Act
of
1
934
("Exchange
Act")
and
Rule
lOb-5
thereunder.
1
0.
Contemporaneously
with
the
filing
of
this
Complaint,
the
SEC
seeks
a
t
emporary
restraining
order:
a
.
freezing
the
assets
held
by
the
Defendants
and
Relief
D
efendants;
b.
requiring
an
accounting;
c
.
preserving
all
existing
documents
related
to
this
action;
d
.
providing
for
expedited
discovery,
particularly
with
respect
to
t
he
location
of
additional
investor
funds;
and
e
.
requiring
the
Defendants
to
show
cause
why
the
Court
should
n
ot
issue
a
Preliminary
Injunction
imposing
the
requested
relief
during
the
p
endency
of
this
action.
1
1.
Through
this
action,
the
SEC
also
seeks:
a
.
entry
of
a
permanent
injunction
prohibiting
the
Defendants
f
rom
further
violations
of
the
federal
securities
laws;
b
.
orders
prohibiting
the
individual
defendants
from
serving
as
o
fficers
or
directors
of
a
public
company;
5

c.
disgorgement
of
the
Defendants'
ill-gotten
gains,
together
with
p
rejudgment
interest;
d
.
disgorgement
from
the
Relief
Defendants
of
all
unjust
e
nrichment
and/or
ill-gotten
gains
received
from
the
Defendants,
together
with
p
rejudgment
interest;
and
e
.
orders
imposing
civil
penalties
as
to
each
Defendant.
~
TURISDICTION
AND
VENUE
1
1.
The
SEC
brings
this
action
pursuant
to
Sections
20(b)
and
20(d)
of
the
S
ecurities
Act,
[15
U.S.C.
§§
77t(b)
and
77t(d)]
and
Section
21(d)
of
the
Exchange
A
ct
[15
U.S.C.
§§
78u(d)]
to
enjoin
such
transactions,
acts,
practices,
and
courses
of
b
usiness,
and
to
obtain
disgorgement,
prejudgment
interest,
civil
money
penalties,
a
nd
such
other
and
further
relief
as
the
Court
may
deem
just
and
appropriate.
1
2.
This
Court
has
jurisdiction
over
this
action
pursuant
to
Section
22(a)
of
t
he
Securities
Act
[15
U.S.C.
§
77v(a)]
and
Sections
21(d),
21(e),
and
27
of
the
E
xchange
Act
[15
U.S.C.
§§
78u(d),
78u(e),
and
78aa].
1
3.
Venue
in
this
District
is
proper
pursuant
to
Section
22(a)
of
the
S
ecurities
Act
[15
U.S.C.
§
77v(a)]
and
Section
27
of
the
Exchange
Act
[15
U.S.C.
§
7
8aa].
Defendant
Nanotech
filed
with
the
SEC
in
this
judicial
district
three
m
aterially
false
and
misleading
Forms
D
signed
by
Defendant
Gange.
Investor
v
ictims
are
located
across
the
country,
with
addresses
in
at
least
25
states,
i
ncluding
Alaska,
Washington
State,
Missouri,
Maryland,
Florida,
and
Texas.

14.
Additionally,
certain
of
the
transactions,
acts,
practices,
and
courses
of
b
usiness
constituting
the
violations
alleged
herein
were
effected,
directly
or
i
ndirectly,
by
making
use
of
the
means
or
instruments
or
instrumentalities
of
t
ransportation
or
communication
in
interstate
commerce,
or
of
the
mails.
D
EFENDANTS
1
5.
Nanotech
Engineering,
Inc.
("Nanotech")
is
a
Delaware
c
orporation
formed
on
August
14,
2017.
Nanotech
maintains
its
principal
place
of
b
usiness
at
2601
Main
Street,
Suite
370,
Irvine,
California,
and
also
has
a
facility
l
ocated
at
140
2nd
St.
SW,
Loveland,
Colorado.
Neither
Nanotech
nor
its
securities
h
ave
ever
been
registered
with
the
SEC.
Nanotech
purports
to
be
in
the
business
of
d
eveloping
revolutionary
solar
panels.
From
August
14,
2017
to
the
present,
N
anotech
has
had
no
discernable
source
of
income
or
revenue
—virtually
all
of
its
f
unds
appear
to
be
investor
funds.
1
6.
Michael
James
Sweaney,
a.k.a
Michael
Hatton,
age
56,
is
a
r
esident
of
Irvine,
California.
Michael
Sweaney,
operating
under
the
alias
"Michael
H
atton,"
serves
as
the
Chief
Financial
Officer
of
Nanotech.
In
February
1998,
M
ichael
Sweaney
pleaded
guilty
to
one
count
of
felony
securities
fraud
in
Nevada
s
tate
court,
was
ordered
to
pay
restitution
to
ten
investors,
and
was
sentenced
to
a
1
2
-to
-32
-month
suspended
prison
sentence,
suspended
in
favor
of
two
years
of
p
robation.
Despite
efforts
to
hide
his
true
identity
from
Nanotech
investors,
M
ichael
Sweaney
has
listed
his
legal
name
on
multiple
Nanotech
bank
forms.

During
the
fraud,
as
detailed
below,
Michael
Sweaney
diverted
at
least
$550,000
in
i
nvestor
funds
for
his
personal
use.
1
7.
David
Sweaney,
age
40,
is
a
resident
of
Fort
Collins,
Colorado.
David
S
weaney
serves
as
the
Chief
Executive
Officer
of
Nanotech
and
is
Michael
S
weeney's
nephew.
David
Sweaney
diverted
at
least
$240,000
in
investor
funds
for
h
is
personal
use.
1
8.
Jeffery
Gange
("Gange"),
age
57,
is
a
resident
of
Irvine,
California.
G
ange
serves
as
Nanotech's
Chief
Operations
Officer.
Gange
signed
each
of
the
t
hree
materially
false
and
misleading
Forms
D
that
Nanotech
filed
with
the
SEC.
G
ange
diverted
at
least
$160,000
in
investor
funds
for
his
personal
use.
R
ELIEF
DEFENDANTS
1
9.
Nanotech
Finance
LLC
("Nanotech
Finance")
is
a
Delaware
l
imited
liability
corporation,
with
its
principal
place
of
business
in
Irvine,
C
alifornia.
Its
single
member
and
manager
is
Defendant
Gange.
Nanotech
Finance
r
eceived
at
least
$650,000
in
ill-gotten
gains
during
the
scheme.
2
0.
Omni
Golf,
LLC
("Omni
Golf')
is
a
California
limited
liability
c
orporation,
with
its
principal
place
of
business
in
Irvine,
California.
Omni
Golf's
r
egistered
address
is
the
same
address
as
Nanotech's
address
in
its
May
17,
2018
a
nd
June
14,
2018
Forms
D,
and
its
sole
registered
member
is
Defendant
Gange.
O
mni
Golf
received
at
least
$400,000
in
ill-gotten
gains
during
the
scheme.
2
1.
3
Dragons
LLC
("3
Dragons")
is
a
Colorado
limited
liability
c
orporation,
with
its
principal
place
of
business
in
Avon,
Colorado.
3
Dragons
was
c
,

originally
formed
by
a
person
who
appears
to
be
a
relative
of
David
Sweaney,
and
D
avid
Sweaney
is
listed
as
an
LLC
member.
3
Dragons
received
at
least
$480,000
i
n
ill-gotten
gains
via
checks
during
the
scheme.
T
HE
NANOTECH
FRAUD
N
anotech's
Purported
"Revolutionary"Business
2
2.
Nanotech
purports
to
be
developing
the
"Nanopanel,"
an
innovative
s
olar
panel.
As
described
on
the
Nanotech
website,
the
Nanopanel
is
"a
lightweight,
s
tronger
than
steel
yet
fl
exible
Solar
Panel
that
is
more
than
three
times
more
e
fficient
than
traditional
solar."
Nanotech
claims
that
its
solar
products
"[s]urpass~
a
ny
substance
other
than
reactor
-grade
uranium
regarding
energy
produced
per
p
ound
of
material."
In
Nanotech's
own
words,
its
Nanopanels
are
nothing
short
of
r
evolutionary:
O
ur
Nano
Solar
Panels
now
give
consumers
a
positive
return
on
i
nvestment,
making
them
the
ideal
choice,
and
demand
for
our
panels
s
hall
be
enormous
and
immediate.
A
t
Nanotech
Engineering
Inc.
we
are
developing
Solar
Panels
the
size
o
f
a
FedEx
Envelope.
By
layering
sheets
of
Graphene
as
a
s
ubstructure,
we
put
a
Carbon
Nanotube
Forest
over
the
top,
with
our
p
roprietary
mineral
solution.
As
the
Sun's
rays
hit
the
array,
electrons
a
re
generated
through
the
forest
much
faster
than
Silicon.
C
learly
in
less
than
ideal
weather
this
number
drops,
however
the
P
anels
are
still
more
efficient
than
traditional
solar
panels
in
cloudy
w
eather,
remember
photons
still
move
through
clouds,
so
that
we
will
s
ee
panels
in
places
previously
unthinkable
in
the
past.
O
ur
solar
panels
are
combined
using
Graphene
sheets
into
a
single
s
tructure,
from
there
a
Graphene
Forest
is
applied
on
the
surface
with
o
ur
proprietary
minerals,
creating
a
lightweight
panel
that
is
stronger
t
han
steel
yet
has
pushed
the
upper
limits
of
the
energy
that
can
be
r
eceived
and
used
by
the
Sun.
In
short
this
is
by
far
the
most
efficient
D

Solar
Panel
ever
created.
Every
photon
that
hits
graphene
creates
t
hree
electrons.
O
ur
main
market
is
replacing
the
old
Solar
Panels
and
applications
for
t
hose
that
otherwise
wouldn't
use
solar.
We
also
are
anticipating
a
pplications
in
parts
of
the
world
that
have
less
than
ideal
weather,
if
o
ur
panel
can
for
example
only
get
40%
in
New
York,
or
20%
in
D
enmark,
it
will
be
used,
achieving
the
dream
of
a
solar
world!
T
he
Commencement
of
Nanotech's
Fraudulent
Securities
Offering
2
3.
Beginning
in
approximately
September
2017,
Nanotech
began
selling
s
ecurities
—shares
of
Nanotech
—
through
a
private
placement
memorandum.
These
s
ecurities
were
not
registered
with
the
SEC.
The
shares
were
priced
at
$2.80
per
s
hare,
and
the
company
stated
that
it
planned
to
se1124
million
shares
—
a
capital
r
aise
of
$67.2
million
—which,
allegedly,
represented
25%
of
the
equity
of
Nanotech.
T
hus,
the
Defendants
indicated
that,
if
the
capital
raise
was
successful,
Nanotech
w
ould
have
a
valuation
of
approximately
$268
million.
The
stated
minimum
i
nvestment
amount
was
$28,000,
though
Nanotech
sometimes
accepted
investments
o
f
smaller
amounts.
2
4.
Broadly
speaking,
Section
5
of
the
Securities
Act
[15
U.S.C.
§
77e]
m
akes
it
unlawful
to
offer
or
sell
a
security
in
interstate
commerce
unless
there
is
a
r
egistration
statement
in
effect
for
the
security,
or
unless
certain
exemptions
apply.
2
5.
Regulation
D
[17
C.F.R.
§
230.501,
et
seq.]
provides
for
multiple
e
xemptions
to
Section
5's
registration
requirement.
2
6.
The
Defendants
asserted
that
their
offering
of
unregistered
Nanotech
s
ecurities
was
exempt
from
Section
5's
registration
requirement
pursuant
to
R
egulation
D,
Section
506(c)
[17
C.F.R.
§
230.506].
1
0

27.
If
a
company
is
offering
and
selling
securities
in
reliance
on
certain
p
rovisions
of
Regulation
D,
including
Section
506(c),
it
is
required
to
file
a
Form
D
w
ith
the
SEC
within
15
days
of
the
first
sale
of
security,
and
Form
D
sets
forth
a
l
ist
of
information
that
the
Company
is
required
to
provide,
including:.
•
A
list
of
related
persons
—defined
to
include:
"Each
executive
o
fficer
and
director
of
the
issuer
and
person
performing
similar
f
unctions
.
.
."
(Item
3);
•
The
name
and
address
"for
each
person
that
has
been
paid
or
w
ill
be
paid
directly
or
indirectly
any
commission
or
other
s
imilar
compensation
in
cash
or
other
consideration
in
c
onnection
with
the
sales
of
securities
in
the
offering
..
."
(Item
1
2);
•
The
amount
of
sales
commissions
paid,
or
estimated
to
be
paid
(
Item
15);
and
•
The
"amount
of
the
gross
proceeds
of
the
offering
that
has
been
o
r
is
proposed
to
be
used
for
payments
to
any
of
the
persons
r
equired
to
be
named
as
executive
officers,
directors
or
p
romotors
in
response
to
Item
3"
(Item
16).
2
8.
17
C.F.R.
§
239.500
requires,
inter
alia,
that
any
entity
that
has
filed
a
F
orm
D
must
amend
that
Form
D,
as
soon
as
practicable,
(a)
to
correct
any
material
m
istake
of
fact,
or
(b)
when
there
is
increase
of
more
than
10%
in
the
amount
of
1
1

commissions,
finders'
fees
or
use
of
proceeds
for
payments
to
executive
officers,
d
irectors
or
promoters.
2
9.
The
Nanotech
shares
that
were
offered
and
sold
are
securities
under
t
he
federal
securities
law.
Not
only
are
equity
shares
sold
for
investment
purposes
a
c
lassic
example
of
a
security,
but
also
Nanotech's
private
placement
memorandum
r
efers
to
the
shares
as
a
"Regulation
`D',
506C
Covered
Security."
Additionally,
each
o
f
the
three
Forms
D
that
Nanotech
filed
with
the
SEC
is
entitled
"Notice
of
Exempt
O
ffering
of
Securities"
and
specifies
the
type
of
securities
being
offered
as
"Equity."
3
0.
Nanotech
employs
a
team
of
"telephone
sales
agents"
to
cold
-call
p
otential
investors.
These
"sales
agents"
have,
at
least
at
times,
been
paid
on
a
c
ommission
basis,
meaning
that
they
are
actually
securities
"brokers"
within
the
m
eaning
of
Section
15(a)(1)
of
the
Exchange
Act
[15
U.S.C.
§
78o(a)(1)],
because
r
eceiving
transaction
-based
commissions
is
one
of
the
hallmarks
of
a
broker.
3
1.
When
sales
agents
call
potential
investors,
they
try
to
get
them
to
view
a
web
-share
presentation
and,
ultimately,
to
invest.
Potential
investors
are
then
p
rovided
with
Nanotech's
banking
information
so
that
they
can
transfer
/wire
funds
t
o
Nanotech.
Potential
investors
are
also
provided
with
copies
of
a
private
p
lacement
memorandum,
which
allegedly
provides
information
about
Nanotech.
3
2.
In
total,
starting
in
September
2017
and
continuing
to
at
least
October
2
2,
2019,
Nanotech's
bank
records
reflect
that
it
has
raised
at
least
$9.4
million
f
rom
investors.
One
investor
alone
appears
to
have
sent
$2,000,000
to
Nanotech.
1
2

33.
Bank
and
shipping
records
indicate
that
Nanotech's
investors
live
a
cross
the
country
in
at
least
25
states.
N
anotech
Filed
Its
First
Misleading
Form
D
in
May
2018
3
4.
On
May
17,
2018,
more
than
seven
months
after
Regulation
D's
15
-day
d
eadline
had
passed,
Nanotech
filed
its
first
Form
D
with
the
SEC
regarding
this
o
ffering.
In
that
Form
D,
Nanotech
proposed
offering
$30
million
worth
of
equity
s
hares
and
indicated
that
$1.2
million
had
already
been
sold
to
41
investors.
3
5.
This
May
2018
Form
D
had
multiple
misstatements
and
omissions
of
m
aterial
facts
that
were
never
corrected
by
Nanotech.
3
6.
In
Item
3,
(Related
Persons)
of
its
May
2018
Form
D,
Nanotech
listed
o
nly
David
Sweaney.
3
7.
In
reality,
multiple
other
persons
served
as
Nanotech's
executive
o
fficers,
including,
at
least,
Michael
Sweaney
and
Gange.
3
8.
The
failure
to
list
Michael
Sweaney
and
Gange
was
not
only
m
isleading,
but
materially
so;
it
was
part
of
a
scheme
to
hide
the
role
of
convicted
f
elon
Michael
Sweaney.
3
9.
In
Item
12
(name
and
address
of
persons
to
be
paid
commission)
of
its
M
ay
2018
Form
D
Nanotech,
again,
listed
only
David
Sweaney.
4
0.
In
reality,
Nanotech
paid
sales
commissions
to
numerous
other
people.
4
1.
The
failure
to
list
other
persons
being
paid
sales
commissions
was
not
o
nly
misleading,
but
materially
so
as
it
concealed
the
boiler
-room
operation
N
anotech
ran
to
sell
its
shares.
13

42.
And
again,
in
Item
16
(amount
of
proceeds
to
related
persons)
of
its
M
ay
2018
Form
D,
Nanotech
disclosed
that
David
Sweaney
would
receive
only
$15.
T
his
was
false
and
misleading
for
multiple
reasons.
4
3.
First,
in
reality,
by
May
17,
2018
when
Nanotech
filed
this
Form
D,
D
avid
Sweaney
had
already
received
$129,500
of
funds
raised
through
this
offering.
4
4.
Second,
by
May
17,
2018,
3
Dragons
had
already
received
$11,000
of
f
unds
raised
through
this
offering,
and
David
Sweaney
is
a
one
of
the
three
m
embers
of
3
Dragons.
4
5.
Third,
Item
16
not
only
requires
the
issuer
to
list
proceeds
that
have
b
een
or
are
proposed
to
be
given
to
people
who
are
listed
in
Item
3,
but
to
"any
of
t
he
persons
required
to
be
named
as
executive
officers,
directors,
or
promoters
in
r
esponse
to
Item
3
above."
Thus,
Nanotech
was
required
to
(but
did
not)
disclose
the
p
roceeds
given
to
Michael
Sweaney
and
Gange.
4
6.
By
May
17,
2018,
Michael
Sweaney
had
received
$82,500
in
proceeds
f
rom
this
offering.
And,
by
May
17,
2018,
Gange
had
received
$11,375
in
proceeds
f
rom
this
offering.
4
7.
Gange
signed
this
Form
D
on
behalf
of
Nanotech,
which
was
e
lectronically
filed
with
the
SEC
in
this
judicial
district.
The
Form
D
was
and
is
a
vailable
to
the
public
through
the
SEC's
EDGAR
system.
N
anotech
Filed
Its
Second
Misleading
Form
D
in
June
2018
4
8.
On
June
14,
2018,
Nanotech
filed
a
second,
amended
Form
D,
which
w
as
incorrectly
marked
as
a
new
notice.
In
the
June
2018
Form
D,
Nanotech
1
4

proposed
to
raise
$67.2
million
from
selling
equity
shares,
and
indicated
that
$1.3
m
illion
had
already
been
sold
to
41
investors.
4
9.
This
June
2018
Form
D
repeated
the
same
material
m
isrepresentations
and
omissions
as
the
May
2018
Form
D,
although
by
then
the
D
efendants
had
diverted
to
themselves
far
more
investor
money:
David
Sweaney
h
ad
received
$129,500,
3
Dragons
had
received
$61,000,
Michael
Sweaney
had
r
eceived
$97,500,
and
Gange
had
taken
$14,375.
5
0.
Again,
Gange
signed
the
Form
D
on
behalf
of
Nanotech
and
e
lectronically
filed
it
with
the
SEC.
This
second,
false
Form
D
was
and
is
available
t
o
the
public
through
the
SEC's
EDGAR
system.
N
anotech
Filed
Its
Third
Misleading
Form
D
in
February
2019
5
1.
On
February
11,
2019,
Nanotech
filed
a
third
Form
D,
which
was
again
i
ncorrectly
marked
as
a
new
notice,
rather
than
as
an
amendment
to
the
previous
F
orm
D.
In
the
February
2019
Form
D,
Nanotech
still
proposed
to
raise
$67.2
m
illion
by
selling
equity
shares,
but
now
falsely
indicated
that
$3.6
million
in
s
ecurities
had
already
been
sold
to
140
investors.
An
analysis
of
Nanotech's
bank
r
ecords
shows
that,
in
fact,
more
than
$4.8
million
had
been
raised
from
investors
b
y
that
point.
5
2.
This
February
2019
Form
D
also
repeated
the
same
material
m
isrepresentations
and
omissions
as
Nanotech's
prior
two
Forms
D,
although
by
t
hen
the
Defendants
had
diverted
to
themselves
even
more
investor
money:
David
S
weaney
had
received
$129,500,
3
Dragons
had
received
$478,129,
Michael
1
5

Sweaney
had
received
$234,050,
Gange
had
received
$35,815,
and
Omni
Golf
had
r
eceived
$72,000.
5
3.
Additionally,
in
Item
15
(amount
of
commissions),
Nanotech
stated
t
hat
the
amount
of
commissions
was
or
would
be
only
$100.
Notably,
this
was
a
d
ecrease
from
the
May
and
June
2018
Forms
D,
which
indicated
commission
p
ayments
in
excess
of
$100,000.
5
4.
In
reality,
by
February
11,
2019,
when
Nanotech
had
filed
its
third
F
orm
D,
Nanotech
had
already
paid
at
least
$103,012
in
commissions.
5
5.
The
amount
of
commissions
Nanotech
listed
is
not
only
false,
but
m
aterially
so,
as
any
reasonable
investor
would
want
to
know
how
much
of
their
i
nvestment
was
going
to
pay
commissions
on
sales
of
Nanotech
securities
instead
of
a
ctually
being
invested
in
the
company.
5
6.
As
with
the
prior
false
Forms
D,
Gange
signed
the
filing
on
behalf
of
N
anotech
and
electronically
filed
with
the
SEC.
Again,
the
Form
D
was
and
is
a
vailable
to
the
public
through
the
SEC's
EDGAR
system.
N
anotech
Used
a
Misleading
Private
Placement
Memorandum
5
7.
When
issuers
sell
securities
pursuant
to
one
of
the
Regulation
D
e
xemptions,
they
often
provide
investors,
and
prospective
investors,
with
a
private
p
lacement
memorandum,
which
contains
key
information
about
the
issuer.
5
8.
Nanotech's
website
has
their
current
PPM
available
for
download
by
i
nvestors
Nanotech
sales
agents
have
contacted.
E
~:

59.
The
PPM
has
multiple
misstatements
and
omissions
of
material
facts,
i
ncluding
(a)
falsely
stating
that
the
CFO's
name
was
Michael
Hatton,
(b)
falsely
s
tating
that
investor
money
would
be
used
only
for
overhead
expenses
and
the
m
anufacture
of
Nanopanels,
when
executives
in
fact
used
a
significant
portion
of
i
nvestor
money
to
support
their
lavish
lifestyle,
and
(c)
failing
to
disclose
that
i
nvestor
money
was
being
transferred
to
other
entities
owned
or
controlled
by
N
anotech
executives.
6
0.
Specifically,
page
18
of
the
PPM
identifies
one
of
Nanotech's
"[k]ey
p
ersonnel"
as
"Michael
Hatton,
Chief
Financial
Officer."
Again,
this
was
false;
N
anotech's
CFO
was,
in
fact,
Michael
Sweaney.
6
1.
Misrepresenting
the
CFO's
name
in
the
PPM
was
part
of
a
scheme
to
c
onceal
Michael
Sweaney's
true
identity
and
prior
conviction
for
felony
securities
f
raud.
That
the
CFO
of
a
company
engaged
in
an
unregistered
offering
of
securities
w
as
previously
convicted
of
felony
securities
fraud
is
a
fact
that
any
reasonable
i
nvestor
would
want
to
know
before
deciding
whether
to
invest.
6
2.
The
PPM,
at
page
29,
also
states
that:
"Nanotech
Engineering
and
its
m
anagers
have
no
lawsuits
pending,
no
legal
actions
pending,
or
judgments
entered
a
gainst
Nanotech
Engineering
or
its
managers
and,
to
the
best
knowledge
of
N
anotech
Engineering,
no
legal
actions
are
contemplated
against
Nanotech
E
ngineering
and
its
managers."
6
3.
In
reality,
however,
Michael
Sweaney
has
multiple
civil
judgments
a
gainst
him,
including
a
$46,020
state
tax
judgment
from
2008
that
remains
1
7

outstanding,
as
well
as,
again,
the
judgment
of
conviction
relating
to
his
prior
felony
s
ecurities
fraud.
6
4.
Importantly,
the
PPM
also
contains
numerous
representations
about
t
he
use
of
investor
funds,
including:
a
.
"Nanotech
Engineering
will
use
the
proceeds
of
this
offering
to
c
omplete
our
solar
panel
(the
NanopanelTM
),
based
on
Nanotechnology,
a
nd
bring
the
NanopanelTM
to
market.
b
.
A
chart
listing
that
of
the
$67,200,000
to
be
raised
in
the
offering,
$
11,088,000
will
be
used
for
"Operations/syndication
cost"
and
the
"
Balance
of
capitol
for
NanopanelTM
production
will
be
$56,112,000."
6
5.
The
PPM
does
not
disclose
in
any
fashion
that
investor
funds
would
be
u
sed
by
executives
for
personal
expenses,
but
rather
indicates
that
all
funds
would
b
e
used
for
"Operations/syndication
cost"
and
Nanopanel
production.
6
6.
A
reasonable
investor
would
want
to
know
that
the
funds
that
N
anotech
had
promised
would
be
used
for
corporate
overhead
and/or
manufacture
o
f
the
Nanopanel
were,
instead,
being
used
by
executives
for
personal
purchases.
6
7.
Similarly,
the
PPM
does
not
disclose
in
any
fashion
that
investor
funds
w
ould
be
transferred
to
executives.
6
8.
In
truth
and
fact,
however,
a
material
percentage
of
all
investor
funds
w
ere
transferred
to
Michael
Sweaney,
David
Sweaney
and
Gange.
6
9.
A
reasonable
investor
would
want
to
know
about
these
transfers.

70.
The
PPM
does
not
disclose
in
any
fashion
that
investor
funds
would
be
t
ransferred
to
entities
in
which
executives
had
a
beneficial
interest.
7
1.
In
truth
and
fact,
a
material
percentage
of
all
investor
funds
were
t
ransferred
to
entities
in
which
Michael
Sweaney,
David
Sweaney
and
Gange
o
wned
or
controlled.
7
2.
The
PPM
contains
only
one
disclosure
about
only
one
of
the
Relief
D
efendants,
and
even
that
disclosure
is
misleading:
W
e
have
li
censed
our
Graphene
Golf
Shafts
to
Omni
Golf
I
nc.,
a
new
golf
club
manufacturer
that
will
be
breaking
i
nto
the
market
with
shafts
that
are
more
powerful,
and
w
hip
back
into
place
faster
since
the
graphene
corrects
i
tself
quicker
than
graphite
or
steel.
7
3.
Even
assuming
that
Nanotech
has,
in
fact,
developed
"Graphene
Golf
S
hafts"
and
executed
such
a
licensing
agreement,
this
disclosure
still
fails
to
d
isclose
that
(a)
Omni
Golf
is
controlled
by
one
of
Nanotech's
executives,
Gange,
(b)
O
mni
Golf
has
not
paid
any
money
to
Nanotech
for
this
license,
and
(c)
that,
in
fact,
N
anotech
sent
money
to
Omni
Golf,
which
is
the
opposite
of
the
situation
suggested
b
y
the
disclosure.
7
4.
Again,
a
reasonable
investor
would
want
to
know
that
their
funds
were
t
ransferred
to
entities
owned
and
controlled
by
Nanotech's
executives.
T
HE
DEFENDANTS'
MISAPPROPRIATION
OF
INVESTOR
FUNDS
7
5.
The
charts
and
paragraphs
76-114
below
identify
spending
and
direct
t
ransfers
of
funds
the
SEC
has
traced
to
Defendants
and
Relief
Defendants
so
far,
t
hough
further
investigation
may
reveal
more.
1
9

76.
Nanotech
has
received
little
to
no
revenue
during
the
course
of
the
s
cheme,
a
fact
which
Nanotech
confirmed
in
its
Forms
D
when
Nanotech
indicated
t
hat
it
had
"no
revenues."
7
7.
An
analysis
of
Nanotech's
bank
accounts
corroborates
Nanotech's
s
tatement
in
this
regard.
Nanotech's
various
bank
accounts
received
a
total
of
$10.6
m
illion
in
incoming
funds,
but
more
than
$1
million
of
that
was
simply
transfers
f
rom
one
Nanotech
account
to
another,
resulting
in
a
net
of
$9.6
million
in
incoming
f
unds.
Of
that,
at
least
$9.51
million
are
demonstrably
investor
funds.
Thus,
non
-
investor
funds,
if
any,
are
limited
to
approximately
$90,000,
and
more
likely
less
t
han
that
(if
any).
Yet,
as
the
chart
below
shows,
the
three
individual
Defendants
h
ave,
either
directly
to
themselves
or
through
the
Relief
Defendants,
diverted
to
t
hemselves
far
in
excess
of
that
amount,
at
least
$2,494,029.
F
unds
misappropriated
through
the
Defendants'
At
least
$458,962.13
n
on
-business
spending
F
unds
misappropriated
through
transfers
to
the
At
least
$498,791.77
i
ndividual
Defendants
F
unds
misappropriated
through
transfers
to
the
At
least
$1,536,275.11
R
elief
Defendants
TOTAL:
At
least
$2,494,029.01
7
8.
Because
Nanotech
has
virtually
no
source
of
funds
other
than
i
nvestors,
the
moneys
diverted
to
the
Defendants
from
Nanotech
are
entirely
or
a
lmost
entirely
investor
funds.
20

The
Defendants
Are
Using
Investor
Funds
to
Pay
for
a
Yacht
a
nd
Other
Personal
Expenses
7
9.
In
total,
Defendants
Michael
Sweaney,
David
Sweaney,
and
Gange
h
ave
transferred
hundreds
of
thousands
of
dollars
of
investor
money
to
themselves,
a
nd
used
hundreds
of
thousands
more
for
personal
purchases.
M
ichael
Sweaney's
misappropriation
of
funds
8
0.
On
May
14
and
21,
2019,
Nanotech
transferred
a
total
of
$208,500
to
a
y
acht
company
in
Dana
Point,
California.
8
1.
Records
from
the
yacht
company
show
that
this
$208,500
was
for
the
p
urchase
of
a
forty-six
foot
Sea
Ray
yacht
named
the
"Bella
Vita."
The
named
p
urchaser
of
the
yacht
was
"Michael
Hatton,"
the
alias
used
by
Michael
Sweaney.
8
2.
Nowhere
in
any
of
Nanotech's
private
placement
memoranda
or
filings
w
ith
the
SEC
has
Nanotech
indicated
that
its
CFO
would
use
investor
funds
to
p
urchase
a
yacht.
8
3.
Michael
Sweaney
also
received
$301,550
in
direct
transfers
of
funds
f
rom
Nanotech.
8
4.
The
chart
below
shows
the
total
spending
and
direct
transfers
of
funds
t
he
SEC
has
traced
directly
to
Michael
Sweaney.
The
below
figures
do
not
include
a
mounts
diverted
to
Defendant
Michael
Sweeney
through
the
Relief
Defendants.
F
unds
Transferred
to
or
Used
b
Michael
Sweane
Hatton)
D
irect
Transfers
$301,550.00
Y
acht
$208,500.00
C
osmetic/Dermatolo
$39,549.17
D
ental
$3,440.00
O
ther
(MedicallFitness/Fertilit
/O
tometr
$605.00
T
OTAL
$553,644.17
2
1

David
Sweaney's
misappropriation
of
funds
8
5.
Similarly,
David
Sweaney
received
$133,926.19
in
direct
transfers
of
f
unds
from
Nanotech.
8
6.
David
Sweaney
also
used
Nanotech
funds
for
non
-business
expenses,
i
ncluding
spending
at
least
$18,643.50
on
luxury
fashion
goods
(e.g.,
Gucci,
Louis
V
uitton,
etc.).
8
7.
The
chart
below
shows
the
total
spending
and
direct
transfers
of
funds
t
he
SEC
has
traced
to
Michael
Sweaney.
The
below
figures
do
not
include
amounts
d
iverted
to
Defendant
David
Sweeney
through
the
Relief
Defendants.
F
unds
Transferred
to
or
Used
b
David
Sweane
D
irect
Transfers
$133,926.19
Y
acht
Related
Ex
enses
$6,166.90
C
osmetic/Dermatolo
$9,754.00
D
ental
$37,557.00
B
eaut
/S
a
$1,218.10
O
ther
(MedicaUFitness/Fertilit
/O
tometr)
$7,968.68
L
uxur
Fashions
$18,643.50
J
ewelr
$25,391.26
T
OTAL
$240,625.63
G
ange's
misappropriation
of
funds
8
8.
In
October
2018
and
February/March
2019
Gange
spent
over
$100,000
i
n
Nanotech
funds
to
purchase
two
Maserati
sport
cars.
8
9.
Gange
also
received
$63,315.58
in
direct
transfers
from
Nanotech.
A
dditional
Misappropriation
of
Funds
9
0.
In
addition
to
the
amounts
specified
above,
more
than
$100,000
of
i
nvestor
funds
were
spent
by
the
Defendants
on
obviously
non
-business
items
such
2
2

as
vaping
products.
At
present,
the
SEC
is
not
able
to
determine
which
individual
s
pent
these
funds,
but
regardless,
investor
funds
were
misappropriated
for
the
p
ersonal
use
of
one
or
more
of
the
principals
of
Nanotech.
The
chart
below
s
ummarizes
the
additional
spending
identified
to
date:
O
ther
Company
Misappropriations
(Not
Yet
Attributed
to
a
Specific
I
ndividual
Defendant
Y
acht
Related
Ex
enses
$57,308.33
C
osmetic/Dermatolo
$24,870.00
V
a
in
/Tobacco
$7,275.27
B
eaut
/S
a
$10,406.00
O
ther
edicaUFitness/Fertilit
/O
tometr
$2,682.00
C
ash
withdrawals
$66,838.98
T
OTAL
$169,380.58
T
he
Defendants
Are
Improperly
Transferring
Investor
Funds
t
o
the
Relief
Defendants,
Which
They
Own
and
Control.
9
1.
Nanotech
transferred
a
total
of
at
least
$1,536,275
to
entities
in
which
t
he
Defendants
had
a
beneficial
interest.
T
ransfers
to
Nanotech
Finance
9
2.
Nanotech
transferred
a
total
of
at
least
$650,000
to
Nanotech
Finance
v
ia
checks,
as
summarized
in
the
chart
below.
P
a
ments
to
Nanotech
Finance
B
ank
and
artial
account
#
Date
T
e
of
a
ment
Amount
1
st
Bank
6364
3/28/2019
COUNTER
CHECK
$110,000.00
l
st
Bank
6364
4/29/2019
Check
Paid
$92,474.00
1
st
Bank
6364
5/7/2019
Check
Paid
$17,950.00
1
st
Bank
6364
6/13/2019
Check
Paid
$150,000.00
1
st
Bank
6364
7/3/2019
Check
Paid
$128,000.00
1
st
Bank
6364
7/31/2019
Check
Paid
$1,112.00
1
st
Bank
6364
8/16/2019
Check
Paid
$127,525.00
l
st
Bank
6364
10/15/2019
Check
Paid
$25,000.00
T
OTAL
$652,061.00
2
3

93.
Nanotech
Finance
only
received
$300
in
incoming
funds
from
sources
o
ther
than
Nanotech.
9
4.
Nanotech
Finance
is
owned
and
controlled
by
Gange.
9
5.
Nanotech
Finance's
most
recent
bank
records
reflect
that
is
a
single
m
ember
LLC,
and
that
the
sole
signer
on
the
account
is
Gange.
Gange
also
signed
d
ocuments
submitted
to
the
bank
that
identified
Gange
as
the
"Secretary
/Member
/
Manager"
of
Nanotech
Finance.
9
6.
Nanotech
Finance's
bank
records
indicate
that
after
Nanotech
Finance
r
eceived
investor
funds
from
Nanotech,
$5,000
was
transferred
to
Michael
Sweaney,
$
10,500
was
transferred
to
Gange,
and
$12,000
was
withdrawn
as
cash.
9
7.
Additionally,
a
$457,394.75
check
issued
from
a
Nanotech
Finance
a
ccount
on
July
23,
2019
remains
outstanding
and
uncashed.
Its
whereabouts
are
n
ot
known
to
the
SEC.
T
ransfers
to
Omni
Golf
9
8.
Nanotech
transferred
total
of
at
least
$400,000
to
Omni
Golf
via
checks
a
s
shown
by
the
chart
below.
P
a
ments
to
Omni
Golf
B
ank
and
artial
account
#
Date
T
e
Amount
1
st
Bank
8930
9/24/2018
Check
Paid
$15,000.00
l
st
Bank
8930
9/25/2018
Check
Paid
$1,000.00
l
st
Bank
8930
11/16/2018
Check
Paid
$20,000.00
1
st
Bank
8930
12/17/2018
Check
Paid
$30,000.00
1
st
Bank
8930
1/30/2019
Check
Paid
$6,000.00
1
st
Bank
8930
2/22/2019
Check
Paid
$23,000.00
1
st
Bank
6364
3/20/2019
Check
Paid
$25,000.00
1
st
Bank
6364
3/21/2019
Check
Paid
$25,000.00
1
st
Bank
6364
3/22/2019
Check
Paid
$25,000.00
2
4

Pa
ments
to
Omni
Golf
B
ank
and
artial
account
#
Date
T
e
Amount
1
st
Bank
6364
4/18/2019
Check
Paid
$40,000.00
1
st
Bank
6364
5/13/2019
Check
Paid
$25,000.00
1
st
Bank
6364
5/24/2019
Check
Paid
$25,000.00
1
st
Bank
6364
6/4/2019
Check
Paid
$20,000.00
1
st
Bank
6364
6/14/2019
Check
Paid
$20,000.00
1
st
Bank
6364
6/25/2019
Check
Paid
$20,000.00
1
st
Bank
6364
7/11/2019
Check
Paid
$20,000.00
1
st
Bank
6364
7/31/2019
Check
Paid
$17,882.00
1
st
Bank
6364
8/15/2019
Check
Paid
$12,860.00
1
st
Bank
6364
8/26/2019
Check
Paid
$14,951.00
1
st
Bank
6364
9/26/2019
Check
Paid
$15,870.00
T
otal
$401,563.00
9
9.
Omni
Golf
only
received
$89,216
from
sources
other
than
Nanotech.
1
00.
Omni
Golf
is
controlled
by
Gange.
1
01.
A
Statement
of
Information
for
Omni
Golf
filed
with
the
California
S
ecretary
of
State
on
February
28,
20181ists
Gange
as
the
sole
member/manager
of
O
mni
Gol£
Gange
signed
this
Statement
of
Information.
1
02.
An
Articles
of
Organization
for
Omni
Golf
fi
led
with
the
California
S
ecretary
of
State
on
February
6,
2018
was
also
signed
by
Gange
as
the
"Organizer"
o
f
Omni
Golf.
1
03.
In
connection
with
opening
a
bank
account
for
Omni
Golf
on
S
eptember
21,
2018,
Gange
signed
multiple
documents
on
behalf
of
Omni
Golf,
i
ncluding
a
certification
that
he
was
the
CEO
of
Omni
Golf
and
authorized
to
act
on
b
ehalf
of
Omni
Golf.
1
04.
Once
funds
were
transferred
from
Nanotech
to
Omni
Golf,
at
least
$
18,000
was
transferred
to
Gange,
and
other
funds
were
used
to
purchase
at
least
2
5

$112,000
in
golf
equipment,
and
at
least
$146,000
was
used
for
"payroll"
to
u
nknown
persons.
T
ransfers
to
3
Dragons
1
05.
Nanotech
transferred
$480,000
to
3
Dragons
via
checks
and
one
cash
t
ransfer,
as
shown
by
the
chart
below.
P
a
ments
to
3
Dra
ons
LLC
B
ank
and
Partial
Account
#
Date
T
e
Amount
1
st
Bank
8930
4/27/2018
Check
Paid
$11,000.00
1
st
Bank
8930
5/23/2018
Check
Paid
$50,000.00
1
st
Bank
8930
7/6/2018
Check
Paid
$2,500.00
1
st
Bank
8930
7/25/2018
Check
Paid
$3,729.00
1
st
Bank
8930
8/7/2018
Check
Paid
$2,500.00
1
st
Bank
8930
8/13/2018
Check
Paid
$30,000.00
1
st
Bank
8930
8/31/2018
Check
Paid
$2,500.00
1
st
Bank
8930
8/31/2018
Check
Paid
$7,500.00
1
st
Bank
8930
8/31/2018
Check
Paid
$7,500.00
1
st
Bank
8930
9/6/2018
Cash
Withdrawal
$3,800.00
1
st
Bank
8930
9/21/2018
Check
Paid
$49,600.00
1
st
Bank
8930
10/1/2018
Check
Paid
$2,500.00
1
st
Bank
8930
10/26/2018
Check
Paid
$305,000.00
1
st
Bank
8930
2/26/2019
Check
Paid
$3,218.69
1
st
Bank
6364
5/28/2019
Check
Paid
$1,303.42
T
otal
$482,651.11
1
06.
3
Dragons
is
controlled
by
David
Sweaney
and
two
other
individuals.
1
07.
3
Dragons
only
received
$264,687
from
sources
other
than
Nanotech.
1
08.
3
Dragons'
Articles
of
Organization
were
filed
with
the
Colorado
S
ecretary
of
State
on
September
18,
2015.
The
documents
list
a
woman
with
the
l
ast
name
"Sweaney"
as
3
Dragons'
Organizer,
and
lists
two
additional3
Dragons'
m
embers,
including
David
Sweaney.
David
Sweaney
is
listed
as
having
the
same
h
ome
address
as
the
Organizer.
26

109.
Documents
from
3
Dragons'
bank
account
list
David
Sweaney
as
the
s
ole
signatory
on
the
account.
1
10.
Once
funds
were
transferred
from
Nanotech
to
3
Dragons,
funds
were
t
hen
transferred
back
to
David
Sweaney
($32,410)
and
Michael
Sweaney
($189,904),
p
lus
additional
transfers
to
other
persons
with
the
last
name
Sweaney.
T
he
Fraud
Is
Ongoing
1
11.
Nanotech
continues
to
solicit
and
receive
investor
funds,
including
the
r
ecent
transactions
listed
below
(all
of
which
are
in
addition
to
the
amounts
d
escribed
above):
•
An
October
28,
2019
incoming
wire
for
$112,000
(equal
to
the
p
urchase
price
of
40,000
shares);
•
A
November
15,
2019
check
for
$28,000
deposited
(with
the
n
otation
"10,000
shares");
•
A
November
15,
2019
deposit
for
$28,000
(equal
to
the
purchase
p
rice
of
10,000
shares);
and
•
A
November
22,
2019
incoming
wire
for
$27,980
(potentially
for
the
p
urchase
of
10,000
shares
minus
a
wire
transaction
fee).
1
12.
The
Defendants
also
continue
to
divert
funds,
including
the
recent
t
ransactions
listed
below
(all
of
which
are
in
addition
to
the
amounts
described
a
bove):
•
Spending
$3,160
on
dermatology
on
October
25,
2019;
2
7

•
Wiring
over
$15,000
to
two
entities
with
the
same
address
as
David
S
weaney
on
November
6,
2019;
and
•
Spending
$6,849.38
at
Ferrari
and
Maserati
of
Newport
Beach
on
N
ovember
14,
2019.
1
13.
During
the
course
of
the
scheme,
the
Defendants
and
Relief
D
efendants
have
engaged
in
a
practice
of
opening
and
closing
different
bank
a
ccounts.
If
the
emergency
relief
sought
in
this
Complaint
is
not
granted,
investor
f
unds
may
be
dissipated
or
transferred
to
unknown
accounts,
and
investors
may
not
b
e
able
to
recover
their
investments
from
the
Defendants.
1
14.
For
example,
the
cashier's
check
for
$457,394.75
of
investor
money
i
mproperly
transferred
to
Nanotech
Finance
remains
outstanding
and
uncashed.
Its
w
hereabouts
are
presently
unknown.
C
LAIMS
FOR
RELIEF
C
OUNT
I
V
iolations
of
Section
17(a)
of
the
Securities
Act
(
All
Defendants)
1
15.
The
SEC
realleges
and
incorporates
by
reference
each
allegation
in
p
aragraphs
1
through
114,
inclusive,
as
if
they
were
fully
set
forth
herein.
1
16.
By
engaging
in
the
conduct
that
is
described
above,
the
Defendants
k
nowingly,
recklessly,
or
negligently
in
connection
with
the
offer
or
sale
of
s
ecurities,
by
the
use
of
the
means
or
instruments
of
transportation,
or
c
ommunication
in
interstate
commerce
or
by
use
of
the
mails,
directly
or
indirectly:
c
.
employed
devices,
schemes,
or
artifices
to
defraud;

d.
obtained
money
or
property
by
means
of
untrue
statements
of
material
f
acts,
or
omissions
to
state
material
facts
necessary
in
order
to
make
t
he
statements
made,
in
light
of
the
circumstances
under
which
they
w
ere
made,
not
misleading;
and/or
e
.
engaged
in
transactions,
practices,
or
courses
of
business
which
o
perated
or
would
operate
as
a
fraud
or
deceit
upon
the
purchaser.
1
17.
By
engaging
in
the
foregoing
conduct,
the
Defendants
violated,
and
u
nless
enjoined
will
continue
to
violate,
Securities
Act
Section
17(a)
[15
U.S.C.
§
7
7q(a)]-
CouNT
II
V
iolations
of
Section
10(b)
of
the
Exchange
Act
and
Rule
lOb-5
Thereunder
(
All
Defendants)
1
18.
The
SEC
realleges
and
incorporates
by
reference
each
allegation
in
p
aragraphs
1
through
114,
inclusive,
as
if
they
were
fully
set
forth
herein.
1
19.
By
engaging
in
the
conduct
described
above,
the
Defendant
knowingly
o
r
recklessly,
in
connection
with
the
purchase
or
sale
of
securities,
directly
or
i
ndirectly,
by
use
the
means
or
instrumentalities
of
interstate
commerce,
or
the
m
ails,
or
the
facilities
of
a
national
securities
exchange:
(
a)
employed
devices,
schemes
or
artifices
to
defraud;
and
(
b)
made
untrue
statements
of
material
facts
or
omitted
to
state
m
aterial
facts
necessary
in
order
to
make
the
statements
made,
i
n
light
of
the
circumstances
under
which
they
were
made,
not
m
isleading;
and/or
29

(c)
engaged
in
acts,
practices,
or
courses
of
business
which
operated
o
r
would
operate
as
a
fr
aud
or
deceit
upon
any
person
in
c
onnection
with
the
purchase
or
sale
of
any
security.
1
20.
By
engaging
in
the
foregoing
conduct
the
Defendant
violated,
and
u
nless
enjoined
will
continue
to
violate,
Section
10(b)
of
the
Exchange
Act
[15
U
.S.C.
§
78j(b)]
and
Rule
lOb-5
[17
C.F.R.
§
240.10b-5],
thereunder.
C
ourrT
III
A
iding
and
Abetting
Violations
of
Section
17(a)
of
the
Securities
Act
(
Defendants
Michael
James
Sweaney,
David
Sweaney
and
Jeffery
Gange)
1
21.
The
SEC
realleges
and
incorporates
by
reference
each
allegation
in
p
aragraphs
1
through
114,
inclusive,
as
if
they
were
fully
set
forth
herein.
1
22.
As
alleged
above,
Defendant
Nanotech
and
others
violated
Section
1
7(a)
of
the
Exchange
Act
[15
U.S.C.
§
77q(a)].
1
23.
Through
their
deceptive
conduct,
misstatements,
misappropriation
of
f
unds
and
other
means
alleged
above,
Defendants
Michael
Sweaney,
David
S
weaney
and
Gange
knowingly
provided
substantial
assistance
to,
and
thereby
a
ided
and
abetted,
Defendant
Nanotech's
violations
of
the
securities
laws.
1
24.
By
engaging
the
in
the
foregoing
conduct,
pursuant
to
Securities
Act
S
ection
15(b)
[15
U.S.C.
§
77o(b)],
Defendants
Michael
Sweaney,
David
Sweaney
a
nd
Gange
violated,
and
unless
enjoined
will
continue
to
violate
violated
Section
1
7(a)
of
the
Securities
Act
[15
U.S.C.
§
77q(a)].
X
317

COUNTIV
A
iding
and
Abetting
Violations
of
Section
10(b)
of
the
Exchange
Act
and
R
ule
lOb-5
Thereunder
(
Defendants
Michael
James
Sweaney,
David
Sweaney
and
Jeffery
Gange)
1
25.
The
SEC
realleges
and
incorporates
by
reference
each
allegation
in
p
aragraphs
1
through
114,
inclusive,
as
if
they
were
fully
set
forth
herein.
1
26.
As
alleged
above,
Defendant
Nanotech
and
others
violated
Section
1
0(b)
of
the
Exchange
Act
[15
U.S.C.
§
78j(b)]
and
Rule
lOb-5
[17
C.F.R.
§
240.10b-
5],
thereunder.
1
27.
Through
their
deceptive
conduct,
misstatements,
misappropriation
of
f
unds
and
other
means
alleged
above,
Defendants
Michael
Sweaney,
David
S
weaney
and
Gange
knowingly
provided
substantial
assistance
to,
and
thereby
a
ided
and
abetted,
Defendant
Nanotech's
violations
of
the
securities
laws.
1
28.
By
engaging
the
in
the
foregoing
conduct,
pursuant
to
Exchange
Act
S
ection
20(e)
[15
U.S.C.
§
78t],
Defendants
Michael
Sweaney,
David
Sweaney
and
G
ange
violated,
and
unless
enjoined
will
continue
to
violate
violated
Section
10(b)
of
t
he
Exchange
Act
[15
U.S.C.
§
78j(b)]
and
Rule
lOb-5
[17
C.F.R.
§
240.1Ob-5],
t
hereunder.
COUNT
V
U
njust
Enrichment
Liability
(
Relief
Defendants)
1
29.
The
SEC
realleges
and
incorporates
by
reference
each
allegation
in
p
aragraphs
1
through
114,
inclusive,
as
if
they
were
fully
set
forth
herein.
3
1

130.
Relief
Defendants
Nanotech
Finance,
Omni
Golf,
and
3
Dragons
have
o
btained
funds
as
part,
and
in
furtherance,
of
the
securities
law
violations
alleged
a
bove,
and
under
circumstances
in
which
it
is
not
just,
equitable,
or
conscionable
for
t
hese
entities
to
retain
the
funds.
As
a
result,
these
Relief
Defendants
have
been
u
njustly
enriched.
PRAYER
FOR
RELIEF
W
HEREFORE,
the
SEC
respectfully
requests
that
the
Court
enter
an
e
mergency,
temporary,
and
preliminary
order
against
the
Defendants:
i
.
temporarily
freezing
the
Defendants'
and
Relief
Defendants'
assets;
i
i.
ordering
the
Defendants
and
Relief
Defendants
to
show
cause
why
a
p
reliminary
injunction
freezing
such
assets
should
not
be
entered;
i
ii.
requiring
the
Defendants
and
Relief
Defendants
to
provide
a
verified
a
ccounting
identifying:
a
.
the
location
and
disposition
of
all
funds
received
from
investors;
b
.
the
location
and
disposition
of
all
accounts
controlled
by
the
D
efendants
or
held
for
their
benefit;
and
c
.
the
location
and
value
of
all
investor
assets,
as
well
as
personal
or
o
ther
assets
currently
held
by
the
Defendants,
or
under
their
control
or
o
ver
which
they
may
exercise
actual
or
apparent
authority.
i
v.
prohibiting
the
Defendants
from
destroying,
altering,
or
concealing
records
of
a
ny
kind;
and
v
.
ordering
expedited
discovery.

Further,
the
SEC
respectfully
requests
that
the
Court
enter
a
final
judgment:
I
.
P
ermanently
restraining
and
enjoining
all
Defendants
from,
directly
or
i
ndirectly,
violating
Section
17(a)
of
the
Securities
Act
[15
U.S.C.
§
77q(a),
and
S
ection
10(b)
of
the
Exchange
Act
[15
U.S.C.
§
78j(b)]
and
Rule
lOb-5
thereunder
[
17
C.F.R.
§
240.1Ob-5];
II.
O
rdering
all
Defendants
and
all
Relief
Defendants
to
disgorge
all
ill-gotten
g
ains
or
unjust
enrichment
derived
from
the
activities
set
forth
in
this
Complaint,
t
ogether
with
prejudgment
interest
thereon;
I
II.
E
nter
an
order
requiring
the
Defendants
to
pay
civil
penalties
pursuant
to
S
ection
20(d)
of
the
Securities
Act
[15
U.S.C.
§
77t(d)]
and
Section
21(d)
of
the
E
xchange
Act
[15
U.S.C.
§
78u(d)].
IV.
E
nter
an
Order
barring
Michael
Sweaney,
David
Sweaney,
and
Jeffery
Gange
f
rom
serving
as
an
officer
or
director
of
a
public
company
pursuant
to
Section
2
1(d)(2)
of
the
Exchange
Act
[15
U.S.C.
§
78u(d)(2)].
V
.
G
ranting
such
other
and
further
relief
as
this
Court
may
deem
just,
e
quitable,
or
necessary
in
connection
with
the
enforcement
of
the
federal
securities
l
aws
and
for
the
protection
of
investors.
33

VI.
R
etaining
jurisdiction
of
this
action
for
purposes
of
enforcing
any
final
j
udgments
and
orders.
rTURY
DEMAND
P
ursuant
to
Rule
39
of
the
Federal
Rules
of
Civil
Procedure,
Plaintiff
d
emands
that
this
case
be
tried
to
a
jury.
R
espectfully
submitted,
G
regory
o
kin
(D.C.
Bar
No.
450885)
C
hristop
Bruckmann
(D.C.
Bar
No.
4
91136)
P
ei
Chung
(Local
Rule
83.2(e)
certification
p
ending)
E
lizabeth
Doisy
U
.S.
SECURITIES
AND
E
XCHANGE
COMMISSION
D
ivision
of
Enforcement
1
00
F
Street,
N.E.
W
ashington,
DC
20549
(
202)
551-5684
(Bockin)
(
202)
772-9292
(facsimile)
B
ockinG(~SEC.gov
C
ounsel
for
Plaintiff
U
.S.
Securities
and
Exchange
Commission
D
ated:
December
5,
2019

rc~rrr~r~~r~T~i
CIVIL
COVER
SHEET
I
.
(a)
PLAINTIFFS
DEFENDANTS
U
NITED
STATES
SECURITIES
AND
EXCHANGE
NANOTECH
ENGINEERING,
INC.,
MICHAEL
JAMES
C
OMMISSION
SWEANEY
(also
known
as
Michael
Hatton),
DAVID
S
WEANEY,
and
JEFFREY
GANGE
(
b)
COUNTY
OF
RESIDENCE
OF
FIRST
LISTED
PLAINTIFF
COUNTY
OF
RESIDENCE
OF
FIRST
LISTED
DEFENDANT
ORAN
G
E
(
EXCEPT
IN
U.S.
PLAINTIFF
CASES)
NOTE:
IN
LAND
CONDEIvIIJATION
c
pesAu
e
T
rt~
ocnnON
OF
O
THE
TRACT
OF
LAND
INVOLVED
(
c)
ATTORNEYS
(FIRM
NAME,
ADDRESS,
AND
TELEPHONE
NUMBER)
ATTORNEYS
(IF
KNOWN)
G
REGORY
BOCKIN
U
.S.
SECURITIES
AND
EXCHANGE
COMMISSION
1
00
F
STREET,
NE,
WASHINGTON,
DC
20549
(
202)
551-5684
I
I.
BASIS
OF
JURISDICTION
III.
CITIZENSHIP
OF
PRINCIPAL
PARTIES
(rLnCE
arr
X
trr
orrE
aox
Fox
(
PLACE
AN
x
IN
ONE
BOX
ONLl~
PLAINTIFF
AND
ONE
BOX
FOR
DEFENDANT)
FOR
DIVERSITY
CASES
ONLY!
O
1
U.S.
Government
O
3
Federal
Question
PTF
DFT
PTF
~
1
~
1
~
4
DFT
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P
laintiff
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Government
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Party)
Citizen
of
th
is
State
Incorporated
or
Principal
Place
o
f
Business
in
This
State
O
2
U.S.
Government
Q
4
Diversity
Citizen
of
Another
State
Q
2
~
2
Incorporated
and
Principal
Place
0
5
Q
5
D
efendant
(Indicate
Citizenship
of
of
Business
in
Another
State
P
arties
in
item
III)
Citizen
or
Subject
of
a
3
3
Q
6
4
~
6
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oreign
Country
Foreign
Nation
I
V.
CASE
ASSIGNMENT
AND
NATURE
OF
SUIT
(
Place
an
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in
one
category.
A
-N.
that
best
represents
your
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and
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a
corresoondine
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Antitrust
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Personal
Injury/
~
C.
Administrative
Agency
~
D.
Temporary
Restraining
M
alpractice
Review
Order/Preliminary
Q
410
Antitrust
Q
310
Airplane
Q
151
Medicare
Act
Injunction
Q
315
Airplane
Product
Liability
Any
nature
of
suit
from
any
category
Q
320
Assault
Libel
&Slander
Social
Securiri
Q
861
HIA
(1395f~
may
be
selected
for
this
category
of
Q
330
Federal
Employers
Liability
~
g62
Black
Lung
(923)
case
assignment.
Q
340
Marine
Q
345
Marine
Product
Liability
0
863
DIWC/DIWW
(405(g))
*(IfAntitrust,
then
A
governs)*
Q
350
Motor
Vehicle
0
864
SSID
Title
XVI
Q
355
Motor
Vehicle
Product
Liability
0
865
RSI
(405(g))
Q
360
Other
Personal
Injury
Other
Statutes
Q
891
Agricultural
Acts
Q
362
Medical
Malpractice
Q
893
Environmental
Matters
Q
365
Product
Liability
Q
367
Health
Care/Pharmaceutical
0
g90
Other
Statutory
Actions
(If
P
ersonal
Injury
Product
Liability
Administrative
Agency
is
Q
368
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Q
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OR
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Pro
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General
Civil
R
eal
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Bankruatcv
Federal
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Suits
Q
462
Naturalization
0
210
Land
Condemnation
Q
422
Appeal
27
USC
158
0
870
Taxes
(US
plaintif7or
Application
Q
220
Foreclosure
Q
423
Withdrawal
28
USC
157
defendant)
0
465
Other
Immigration
Q
230
Rent,
Lease
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Q
871
IRS
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Party
26
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Actions
Q
240
Torts
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Land
Prisoner
Petitions
5
35
Death
Penalty
7609
~
470
Racketeer
Influenced
Q
245
Tort
Product
Liability
Q
290
All
Other
Real
Property
~
540
Mandamus
&Other
Forfeiture/Penalty
&Corrupt
Organization
0
480
Consumer
Credit
5
50
Civil
Rights
Q
625
Drug
Related
Seizure
of
0
490
Cable/Satellite
TV
P
ersonal
Proaerty
~
555
Prison
Conditions
~
Pro
er
21
USC
881
P
Ty
Q
690
Other
0
g50
Securities/Commodities/
Q
370
Other
Fraud
560
Civil
Detainee
—Conditions
Exchange
Q
371
Truth
in
Lending
of
Confinement
Other
Statutes
Q
896
Arbitration
Q
380
Other
Personal
Property
Q
375
False
Claims
Act
Q
899
Administrative
Procedure
D
amage
Q
385
Property
Damage
Pro
er
Ri
hts
8
20
Copyrights
Q
376
Qui
Tam
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or
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roduct
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0
830
Patent
Q
835
Patent—
Abbreviated
New
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0
400
State
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Q
950
Constitutionality
of
State
D
rug
Application
Q
430
Banks
&Banking
Statutes
Q
840
Trademark
Q
450
Commerce/ICC
Q
890
Other
Statutory
Actions
R
ates/etc.
(if
not
administrative
agency
Q
460
Deportation
review
or
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Act)

~
G.
Habeas
Corpus/
O
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~
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~
J.
Student
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2
255
Discrimination
Q
530
Habeas
Corpus
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Q
510
MotionNacate
Sentence
Q
463
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Corpus
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D
etainee
Q
K.
Labor/ERISA
(
non
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Q
710
Fair
Labor
Standards
Act
Q
720
Labor/Mgmt.
Relations
Q
740
Labor
Railway
Act
Q
751
Family
and
Medical
L
eave
Act
0
790
Other
Labor
Litigatlon
Q
791
Empl.
Ret.
Inc.
Security
Act
V
.
ORIGIN
Q
442
Civil
Rights
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(
criteria:
race,
gender/sex,
n
ational
origin,
d
iscrimination,
disability,
age,
r
eligion,
retaliation)
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If
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select
this
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L
.
Other
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(
non
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Q
441
Voting
(if
not
Voting
Rights
A
ct)
4
43
Housing/Accommodations
Q
440
Other
Civil
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Q
445
Americans
w/Disabilities—
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0
446
Americans
w/Disabilities
—
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4
48
Education
Q
895
Freedom
of
Information
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~
152
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of
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Q
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Statutory
Actions
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Counsel of Record
Gregory Bockin
Christopher Bruckmann
Pei Chung
Elizabeth Doisy
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
T: 202-551-5984

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,

100 F Street, N.E.
Washington, DC 20549

Plaintiff,

v.

NANOTECH ENGINEERING, INC.,
2601 Main Street, Suite 370
Irvine, CA 92614

MICHAEL JAMES SWEANEY (also
known as Michael Hatton),

2555 Main Street, Apt. 3050
Irvine, CA 92614

DAVID SWEANEY,
2649 Bison Road
Fort Collins, CO 80525

and JEFFERY GANGE,
33 Elizabeth Lane
Irvine, CA 92602

Defendants,

and

NANOTECH FINANCE LLC,
33 Elizabeth Lane

Case No.

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 1 of 34 



Irvine, CA 92602
OM1VI GOLF, LLC,

33 Elizabeth Lane
Irvine, CA 92602

and 3 DRAGONS LLC,
2649 Bison Road
Fort Collins, CO 80525

Relief Defendants.

COMPLAINT

Plaintiff United States Securities and Exchange Commission ("SEC") alleges

as follows:

SUMMARY

1. This is an emergency action seeking to, inter alia, freeze funds held by

the Defendants and Relief Defendants so that the Defendants, who are presently

perpetrating an ongoing securities fraud, cannot abscond with, transfer, convert, or

further dissipate assets received from, and rightfully belonging to, more than one

hundred investor-victims.

2. As set forth below, convicted securities fraudster Michael James

Sweaney ("Michael Sweaney") and the other Defendants are engaged in an ongoing

fraudulent offering of the securities of Nanotech Engineering, Inc. ("Nanotech")

Over the last two ,years, the Defendants and others have solicited more than $9.4

million in investments from more than one hundred people through deceptive acts,

including misrepresenting and omitting material facts in filings with the SEC and

in private placement memoranda ("PPM(s)"). The Defendants' deceptive conduct

has concealed from investors not only Michael Sweaney's prior criminal conviction,

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 2 of 34 



but also the misappropriation of more than $2.4 million in investor funds by the

Defendants —including the Defendants' purchases of a yacht, several sports cars,

and cosmetic surgery.

3. Starting on approximately September 15, 2017 and continuing through

the present, Defendant Michael Sweaney, masquerading under the pseudonym

"Michael Hatton," served as Chief Financial Officer of Nanotech, while his nephew,

Defendant David Sweaney, served as Chief Executive Officer, and Defendant

Jeffery Gange ("Gange") served as Chief Operations Officer. During this time,

Nanotech employees were pressured to, and did, cold-call potential investors from

Alaska to Florida, many of whom purchased Nanotech shares.

4. Nanotech filed three separate Forms D with the SEC asserting that

this offering of shares was exempt from the registration requirements of the

Securities Act of 1933 ("Securities Act"). Those Forms D contained multiple

misrepresentations and omissions of material facts, including: (a) the failure to

disclose Michael Sweaney's role with the company and thereby omitting the fact

that he had previously been convicted of felony securities fraud, (b) the false

statements that Nanotech's executive officers, including the Defendants, would

receive only $15 of investor funds when the Defendants had, in fact, directly and

indirectly, received more than $900,000 by the time the most recent Form D was

filed, and (c) misrepresentations regarding amount of investor money that would be

used to pay commissions to Nanotech employees for convincing victims to invest.

3

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 3 of 34 



 

5. Nanotech, a Delaware Corporation with operations in Colorado and

California, employed numerous "sales agents" (actually unlicensed stockbrokers

being paid on a commission basis) in a "boiler-room"-type environment. These sales

agents cold-called potential investors across the country. Investors were convinced

to invest by dubious claims of apatent-pending invention that would change the

world: the allegedly revolutionary "Nanopanel" solar panel. As stated in Nanotech's

PPM:

Solar panels need no longer be large, heavy, fragile, expensive to

manufacture and install, with only 20% efficiency. Nanotech
Engineering has invented what we believe to be the last generation

Solar Panel, thin, lightweight, stronger than steel, yet flexible and

three to four times more efficient ...Also, our panels will allow the use

of solar in parts of the world that would otherwise not use solar due to

a lack of sunny weather. Even if a customer is only getting 40%

efficiency in a non-sunny part of the world, that is still double that of

traditional panels.

6. Potential investors were provided with a PPM, and if they decided to

invest, a subscription agreement, which outlined the terms of the investment.

7. Nanotech's website, www.nanotechengineeringinc.com, has this PPM

available for potential investors to download. The PPM on Nanotech's website also

contains multiple material misrepresentations and omissions, including (a) falsely

identifying Nanotech's CFO (Michael Sweaney) as "Michael Hatton," (b) misleading

investors about the fact that investor money would be diverted to other entities in

which the Defendants and/or other Nanotech employees had an interest, and (c)

misleading investors about the fact that Michael Sweaney, David Sweaney, and

Gange were misappropriating investor money from Nanotech for their personal use.

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 4 of 34 



8. As of December 4, 2019, Nanotech's website continues to operate and

Nanotech continues to solicit additional investor funds.

9. By knowingly or recklessly engaging in the conduct described in this

Complaint, the Defendants violated, and unless enjoined will continue to violate,

Section 17(a) of the Securities, and Section 10(b) of the Securities Exchange Act of

1934 ("Exchange Act") and Rule lOb-5 thereunder.

10. Contemporaneously with the filing of this Complaint, the SEC seeks a

temporary restraining order:

a. freezing the assets held by the Defendants and Relief

Defendants;

b. requiring an accounting;

c. preserving all existing documents related to this action;

d. providing for expedited discovery, particularly with respect to

the location of additional investor funds; and

e. requiring the Defendants to show cause why the Court should

not issue a Preliminary Injunction imposing the requested relief during the

pendency of this action.

11. Through this action, the SEC also seeks:

a. entry of a permanent injunction prohibiting the Defendants

from further violations of the federal securities laws;

b. orders prohibiting the individual defendants from serving as

officers or directors of a public company;

5

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 5 of 34 



c. disgorgement of the Defendants' ill-gotten gains, together with

prejudgment interest;

d. disgorgement from the Relief Defendants of all unjust

enrichment and/or ill-gotten gains received from the Defendants, together with

prejudgment interest; and

e. orders imposing civil penalties as to each Defendant.

~TURISDICTION AND VENUE

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

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

Act [15 U.S.C. §§ 78u(d)] to enjoin such transactions, acts, practices, and courses of

business, and to obtain disgorgement, prejudgment interest, civil money penalties,

and such other and further relief as the Court may deem just and appropriate.

12. This Court has jurisdiction over this action pursuant to Section 22(a) of

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

Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

13. Venue in this District is proper pursuant to Section 22(a) of the

Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §

78aa]. Defendant Nanotech filed with the SEC in this judicial district three

materially false and misleading Forms D signed by Defendant Gange. Investor

victims are located across the country, with addresses in at least 25 states,

including Alaska, Washington State, Missouri, Maryland, Florida, and Texas.

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 6 of 34 



14. Additionally, certain of the transactions, acts, practices, and courses of

business constituting the violations alleged herein were effected, directly or

indirectly, by making use of the means or instruments or instrumentalities of

transportation or communication in interstate commerce, or of the mails.

DEFENDANTS

15. Nanotech Engineering, Inc. ("Nanotech") is a Delaware

corporation formed on August 14, 2017. Nanotech maintains its principal place of

business at 2601 Main Street, Suite 370, Irvine, California, and also has a facility

located at 140 2nd St. SW, Loveland, Colorado. Neither Nanotech nor its securities

have ever been registered with the SEC. Nanotech purports to be in the business of

developing revolutionary solar panels. From August 14, 2017 to the present,

Nanotech has had no discernable source of income or revenue —virtually all of its

funds appear to be investor funds.

16. Michael James Sweaney, a.k.a Michael Hatton, age 56, is a

resident of Irvine, California. Michael Sweaney, operating under the alias "Michael

Hatton," serves as the Chief Financial Officer of Nanotech. In February 1998,

Michael Sweaney pleaded guilty to one count of felony securities fraud in Nevada

state court, was ordered to pay restitution to ten investors, and was sentenced to a

12-to-32-month suspended prison sentence, suspended in favor of two years of

probation. Despite efforts to hide his true identity from Nanotech investors,

Michael Sweaney has listed his legal name on multiple Nanotech bank forms.

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 7 of 34 



During the fraud, as detailed below, Michael Sweaney diverted at least $550,000 in

investor funds for his personal use.

17. David Sweaney, age 40, is a resident of Fort Collins, Colorado. David

Sweaney serves as the Chief Executive Officer of Nanotech and is Michael

Sweeney's nephew. David Sweaney diverted at least $240,000 in investor funds for

his personal use.

18. Jeffery Gange ("Gange"), age 57, is a resident of Irvine, California.

Gange serves as Nanotech's Chief Operations Officer. Gange signed each of the

three materially false and misleading Forms D that Nanotech filed with the SEC.

Gange diverted at least $160,000 in investor funds for his personal use.

RELIEF DEFENDANTS

19. Nanotech Finance LLC ("Nanotech Finance") is a Delaware

limited liability corporation, with its principal place of business in Irvine,

California. Its single member and manager is Defendant Gange. Nanotech Finance

received at least $650,000 in ill-gotten gains during the scheme.

20. Omni Golf, LLC ("Omni Golf') is a California limited liability

corporation, with its principal place of business in Irvine, California. Omni Golf's

registered address is the same address as Nanotech's address in its May 17, 2018

and June 14, 2018 Forms D, and its sole registered member is Defendant Gange.

Omni Golf received at least $400,000 in ill-gotten gains during the scheme.

21. 3 Dragons LLC ("3 Dragons") is a Colorado limited liability

corporation, with its principal place of business in Avon, Colorado. 3 Dragons was

c,

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 8 of 34 



originally formed by a person who appears to be a relative of David Sweaney, and

David Sweaney is listed as an LLC member. 3 Dragons received at least $480,000

in ill-gotten gains via checks during the scheme.

THE NANOTECH FRAUD

Nanotech's Purported "Revolutionary"Business

22. Nanotech purports to be developing the "Nanopanel," an innovative

solar panel. As described on the Nanotech website, the Nanopanel is "a lightweight,

stronger than steel yet flexible Solar Panel that is more than three times more

efficient than traditional solar." Nanotech claims that its solar products "[s]urpass~

any substance other than reactor-grade uranium regarding energy produced per

pound of material." In Nanotech's own words, its Nanopanels are nothing short of

revolutionary:

Our Nano Solar Panels now give consumers a positive return on
investment, making them the ideal choice, and demand for our panels
shall be enormous and immediate.

At Nanotech Engineering Inc. we are developing Solar Panels the size

of a FedEx Envelope. By layering sheets of Graphene as a
substructure, we put a Carbon Nanotube Forest over the top, with our
proprietary mineral solution. As the Sun's rays hit the array, electrons
are generated through the forest much faster than Silicon.

Clearly in less than ideal weather this number drops, however the
Panels are still more efficient than traditional solar panels in cloudy
weather, remember photons still move through clouds, so that we will

see panels in places previously unthinkable in the past.

Our solar panels are combined using Graphene sheets into a single

structure, from there a Graphene Forest is applied on the surface with

our proprietary minerals, creating a lightweight panel that is stronger

than steel yet has pushed the upper limits of the energy that can be
received and used by the Sun. In short this is by far the most efficient

D

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 9 of 34 



Solar Panel ever created. Every photon that hits graphene creates

three electrons.

Our main market is replacing the old Solar Panels and applications for

those that otherwise wouldn't use solar. We also are anticipating

applications in parts of the world that have less than ideal weather, if

our panel can for example only get 40% in New York, or 20% in

Denmark, it will be used, achieving the dream of a solar world!

The Commencement of Nanotech's Fraudulent Securities Offering

23. Beginning in approximately September 2017, Nanotech began selling

securities —shares of Nanotech — through a private placement memorandum. These

securities were not registered with the SEC. The shares were priced at $2.80 per

share, and the company stated that it planned to se1124 million shares — a capital

raise of $67.2 million —which, allegedly, represented 25% of the equity of Nanotech.

Thus, the Defendants indicated that, if the capital raise was successful, Nanotech

would have a valuation of approximately $268 million. The stated minimum

investment amount was $28,000, though Nanotech sometimes accepted investments

of smaller amounts.

24. Broadly speaking, Section 5 of the Securities Act [15 U.S.C. § 77e]

makes it unlawful to offer or sell a security in interstate commerce unless there is a

registration statement in effect for the security, or unless certain exemptions apply.

25. Regulation D [17 C.F.R. § 230.501, et seq.] provides for multiple

exemptions to Section 5's registration requirement.

26. The Defendants asserted that their offering of unregistered Nanotech

securities was exempt from Section 5's registration requirement pursuant to

Regulation D, Section 506(c) [17 C.F.R. § 230.506].

10

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 10 of 34 



 

 

 

 

27. If a company is offering and selling securities in reliance on certain

provisions of Regulation D, including Section 506(c), it is required to file a Form D

with the SEC within 15 days of the first sale of security, and Form D sets forth a

list of information that the Company is required to provide, including:.

• A list of related persons —defined to include: "Each executive

officer and director of the issuer and person performing similar

functions ..." (Item 3);

• The name and address "for each person that has been paid or

will be paid directly or indirectly any commission or other

similar compensation in cash or other consideration in

connection with the sales of securities in the offering ..." (Item

12);

• The amount of sales commissions paid, or estimated to be paid

(Item 15); and

• The "amount of the gross proceeds of the offering that has been

or is proposed to be used for payments to any of the persons

required to be named as executive officers, directors or

promotors in response to Item 3" (Item 16).

28. 17 C.F.R. § 239.500 requires, inter alia, that any entity that has filed a

Form D must amend that Form D, as soon as practicable, (a) to correct any material

mistake of fact, or (b) when there is increase of more than 10% in the amount of

11

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 11 of 34 



 

commissions, finders' fees or use of proceeds for payments to executive officers,

directors or promoters.

29. The Nanotech shares that were offered and sold are securities under

the federal securities law. Not only are equity shares sold for investment purposes a

classic example of a security, but also Nanotech's private placement memorandum

refers to the shares as a "Regulation ̀D', 506C Covered Security." Additionally, each

of the three Forms D that Nanotech filed with the SEC is entitled "Notice of Exempt

Offering of Securities" and specifies the type of securities being offered as "Equity."

30. Nanotech employs a team of "telephone sales agents" to cold-call

potential investors. These "sales agents" have, at least at times, been paid on a

commission basis, meaning that they are actually securities "brokers" within the

meaning of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)], because

receiving transaction-based commissions is one of the hallmarks of a broker.

31. When sales agents call potential investors, they try to get them to view

a web-share presentation and, ultimately, to invest. Potential investors are then

provided with Nanotech's banking information so that they can transfer /wire funds

to Nanotech. Potential investors are also provided with copies of a private

placement memorandum, which allegedly provides information about Nanotech.

32. In total, starting in September 2017 and continuing to at least October

22, 2019, Nanotech's bank records reflect that it has raised at least $9.4 million

from investors. One investor alone appears to have sent $2,000,000 to Nanotech.

12

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 12 of 34 



33. Bank and shipping records indicate that Nanotech's investors live

across the country in at least 25 states.

Nanotech Filed Its First Misleading Form D in May 2018

34. On May 17, 2018, more than seven months after Regulation D's 15-day

deadline had passed, Nanotech filed its first Form D with the SEC regarding this

offering. In that Form D, Nanotech proposed offering $30 million worth of equity

shares and indicated that $1.2 million had already been sold to 41 investors.

35. This May 2018 Form D had multiple misstatements and omissions of

material facts that were never corrected by Nanotech.

36. In Item 3, (Related Persons) of its May 2018 Form D, Nanotech listed

only David Sweaney.

37. In reality, multiple other persons served as Nanotech's executive

officers, including, at least, Michael Sweaney and Gange.

38. The failure to list Michael Sweaney and Gange was not only

misleading, but materially so; it was part of a scheme to hide the role of convicted

felon Michael Sweaney.

39. In Item 12 (name and address of persons to be paid commission) of its

May 2018 Form D Nanotech, again, listed only David Sweaney.

40. In reality, Nanotech paid sales commissions to numerous other people.

41. The failure to list other persons being paid sales commissions was not

only misleading, but materially so as it concealed the boiler-room operation

Nanotech ran to sell its shares.

13

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 13 of 34 



42. And again, in Item 16 (amount of proceeds to related persons) of its

May 2018 Form D, Nanotech disclosed that David Sweaney would receive only $15.

This was false and misleading for multiple reasons.

43. First, in reality, by May 17, 2018 when Nanotech filed this Form D,

David Sweaney had already received $129,500 of funds raised through this offering.

44. Second, by May 17, 2018, 3 Dragons had already received $11,000 of

funds raised through this offering, and David Sweaney is a one of the three

members of 3 Dragons.

45. Third, Item 16 not only requires the issuer to list proceeds that have

been or are proposed to be given to people who are listed in Item 3, but to "any of

the persons required to be named as executive officers, directors, or promoters in

response to Item 3 above." Thus, Nanotech was required to (but did not) disclose the

proceeds given to Michael Sweaney and Gange.

46. By May 17, 2018, Michael Sweaney had received $82,500 in proceeds

from this offering. And, by May 17, 2018, Gange had received $11,375 in proceeds

from this offering.

47. Gange signed this Form D on behalf of Nanotech, which was

electronically filed with the SEC in this judicial district. The Form D was and is

available to the public through the SEC's EDGAR system.

Nanotech Filed Its Second Misleading Form D in June 2018

48. On June 14, 2018, Nanotech filed a second, amended Form D, which

was incorrectly marked as a new notice. In the June 2018 Form D, Nanotech

14

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 14 of 34 



proposed to raise $67.2 million from selling equity shares, and indicated that $1.3

million had already been sold to 41 investors.

49. This June 2018 Form D repeated the same material

misrepresentations and omissions as the May 2018 Form D, although by then the

Defendants had diverted to themselves far more investor money: David Sweaney

had received $129,500, 3 Dragons had received $61,000, Michael Sweaney had

received $97,500, and Gange had taken $14,375.

50. Again, Gange signed the Form D on behalf of Nanotech and

electronically filed it with the SEC. This second, false Form D was and is available

to the public through the SEC's EDGAR system.

Nanotech Filed Its Third Misleading Form D in February 2019

51. On February 11, 2019, Nanotech filed a third Form D, which was again

incorrectly marked as a new notice, rather than as an amendment to the previous

Form D. In the February 2019 Form D, Nanotech still proposed to raise $67.2

million by selling equity shares, but now falsely indicated that $3.6 million in

securities had already been sold to 140 investors. An analysis of Nanotech's bank

records shows that, in fact, more than $4.8 million had been raised from investors

by that point.

52. This February 2019 Form D also repeated the same material

misrepresentations and omissions as Nanotech's prior two Forms D, although by

then the Defendants had diverted to themselves even more investor money: David

Sweaney had received $129,500, 3 Dragons had received $478,129, Michael

15

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 15 of 34 



Sweaney had received $234,050, Gange had received $35,815, and Omni Golf had

received $72,000.

53. Additionally, in Item 15 (amount of commissions), Nanotech stated

that the amount of commissions was or would be only $100. Notably, this was a

decrease from the May and June 2018 Forms D, which indicated commission

payments in excess of $100,000.

54. In reality, by February 11, 2019, when Nanotech had filed its third

Form D, Nanotech had already paid at least $103,012 in commissions.

55. The amount of commissions Nanotech listed is not only false, but

materially so, as any reasonable investor would want to know how much of their

investment was going to pay commissions on sales of Nanotech securities instead of

actually being invested in the company.

56. As with the prior false Forms D, Gange signed the filing on behalf of

Nanotech and electronically filed with the SEC. Again, the Form D was and is

available to the public through the SEC's EDGAR system.

Nanotech Used a Misleading Private Placement Memorandum

57. When issuers sell securities pursuant to one of the Regulation D

exemptions, they often provide investors, and prospective investors, with a private

placement memorandum, which contains key information about the issuer.

58. Nanotech's website has their current PPM available for download by

investors Nanotech sales agents have contacted.

E~:

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 16 of 34 



59. The PPM has multiple misstatements and omissions of material facts,

including (a) falsely stating that the CFO's name was Michael Hatton, (b) falsely

stating that investor money would be used only for overhead expenses and the

manufacture of Nanopanels, when executives in fact used a significant portion of

investor money to support their lavish lifestyle, and (c) failing to disclose that

investor money was being transferred to other entities owned or controlled by

Nanotech executives.

60. Specifically, page 18 of the PPM identifies one of Nanotech's "[k]ey

personnel" as "Michael Hatton, Chief Financial Officer." Again, this was false;

Nanotech's CFO was, in fact, Michael Sweaney.

61. Misrepresenting the CFO's name in the PPM was part of a scheme to

conceal Michael Sweaney's true identity and prior conviction for felony securities

fraud. That the CFO of a company engaged in an unregistered offering of securities

was previously convicted of felony securities fraud is a fact that any reasonable

investor would want to know before deciding whether to invest.

62. The PPM, at page 29, also states that: "Nanotech Engineering and its

managers have no lawsuits pending, no legal actions pending, or judgments entered

against Nanotech Engineering or its managers and, to the best knowledge of

Nanotech Engineering, no legal actions are contemplated against Nanotech

Engineering and its managers."

63. In reality, however, Michael Sweaney has multiple civil judgments

against him, including a $46,020 state tax judgment from 2008 that remains

17

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 17 of 34 



outstanding, as well as, again, the judgment of conviction relating to his prior felony

securities fraud.

64. Importantly, the PPM also contains numerous representations about

the use of investor funds, including:

a. "Nanotech Engineering will use the proceeds of this offering to

complete our solar panel (the NanopanelTM ), based on Nanotechnology,

and bring the NanopanelTM to market.

b. A chart listing that of the $67,200,000 to be raised in the offering,

$11,088,000 will be used for "Operations/syndication cost" and the

"Balance of capitol for NanopanelTM production will be $56,112,000."

65. The PPM does not disclose in any fashion that investor funds would be

used by executives for personal expenses, but rather indicates that all funds would

be used for "Operations/syndication cost" and Nanopanel production.

66. A reasonable investor would want to know that the funds that

Nanotech had promised would be used for corporate overhead and/or manufacture

of the Nanopanel were, instead, being used by executives for personal purchases.

67. Similarly, the PPM does not disclose in any fashion that investor funds

would be transferred to executives.

68. In truth and fact, however, a material percentage of all investor funds

were transferred to Michael Sweaney, David Sweaney and Gange.

69. A reasonable investor would want to know about these transfers.

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 18 of 34 



70. The PPM does not disclose in any fashion that investor funds would be

transferred to entities in which executives had a beneficial interest.

71. In truth and fact, a material percentage of all investor funds were

transferred to entities in which Michael Sweaney, David Sweaney and Gange

owned or controlled.

72. The PPM contains only one disclosure about only one of the Relief

Defendants, and even that disclosure is misleading:

We have licensed our Graphene Golf Shafts to Omni Golf

Inc., a new golf club manufacturer that will be breaking

into the market with shafts that are more powerful, and

whip back into place faster since the graphene corrects
itself quicker than graphite or steel.

73. Even assuming that Nanotech has, in fact, developed "Graphene Golf

Shafts" and executed such a licensing agreement, this disclosure still fails to

disclose that (a) Omni Golf is controlled by one of Nanotech's executives, Gange, (b)

Omni Golf has not paid any money to Nanotech for this license, and (c) that, in fact,

Nanotech sent money to Omni Golf, which is the opposite of the situation suggested

by the disclosure.

74. Again, a reasonable investor would want to know that their funds were

transferred to entities owned and controlled by Nanotech's executives.

THE DEFENDANTS' MISAPPROPRIATION OF INVESTOR FUNDS

75. The charts and paragraphs 76-114 below identify spending and direct

transfers of funds the SEC has traced to Defendants and Relief Defendants so far,

though further investigation may reveal more.

19

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 19 of 34 



76. Nanotech has received little to no revenue during the course of the

scheme, a fact which Nanotech confirmed in its Forms D when Nanotech indicated

that it had "no revenues."

77. An analysis of Nanotech's bank accounts corroborates Nanotech's

statement in this regard. Nanotech's various bank accounts received a total of $10.6

million in incoming funds, but more than $1 million of that was simply transfers

from one Nanotech account to another, resulting in a net of $9.6 million in incoming

funds. Of that, at least $9.51 million are demonstrably investor funds. Thus, non-

investor funds, if any, are limited to approximately $90,000, and more likely less

than that (if any). Yet, as the chart below shows, the three individual Defendants

have, either directly to themselves or through the Relief Defendants, diverted to

themselves far in excess of that amount, at least $2,494,029.

Funds misappropriated through the Defendants' At least $458,962.13

non-business spending

Funds misappropriated through transfers to the At least $498,791.77

individual Defendants

Funds misappropriated through transfers to the At least $1,536,275.11

Relief Defendants

TOTAL: At least $2,494,029.01

78. Because Nanotech has virtually no source of funds other than

investors, the moneys diverted to the Defendants from Nanotech are entirely or

almost entirely investor funds.

20

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 20 of 34The Defendants Are Using Investor Funds to Pay for a Yacht
and Other Personal Expenses

79. In total, Defendants Michael Sweaney, David Sweaney, and Gange

have transferred hundreds of thousands of dollars of investor money to themselves,

and used hundreds of thousands more for personal purchases.

Michael Sweaney's misappropriation of funds

80. On May 14 and 21, 2019, Nanotech transferred a total of $208,500 to a

yacht company in Dana Point, California.

81. Records from the yacht company show that this $208,500 was for the

purchase of a forty-six foot Sea Ray yacht named the "Bella Vita." The named

purchaser of the yacht was "Michael Hatton," the alias used by Michael Sweaney.

82. Nowhere in any of Nanotech's private placement memoranda or filings

with the SEC has Nanotech indicated that its CFO would use investor funds to

purchase a yacht.

83. Michael Sweaney also received $301,550 in direct transfers of funds

from Nanotech.

84. The chart below shows the total spending and direct transfers of funds

the SEC has traced directly to Michael Sweaney. The below figures do not include

amounts diverted to Defendant Michael Sweeney through the Relief Defendants.

Funds Transferred to or Used b Michael Sweane Hatton)

Direct Transfers $301,550.00

Yacht $208,500.00

Cosmetic/Dermatolo $39,549.17

Dental $3,440.00

Other (MedicallFitness/Fertilit /O tometr $605.00

TOTAL $553,644.17

21

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 21 of 34 



David Sweaney's misappropriation of funds

85. Similarly, David Sweaney received $133,926.19 in direct transfers of

funds from Nanotech.

86. David Sweaney also used Nanotech funds for non-business expenses,

including spending at least $18,643.50 on luxury fashion goods (e.g., Gucci, Louis

Vuitton, etc.).

87. The chart below shows the total spending and direct transfers of funds

the SEC has traced to Michael Sweaney. The below figures do not include amounts

diverted to Defendant David Sweeney through the Relief Defendants.

Funds Transferred to or Used b David Sweane

Direct Transfers $133,926.19

Yacht Related Ex enses $6,166.90

Cosmetic/Dermatolo $9,754.00

Dental $37,557.00

Beaut /S a $1,218.10

Other (MedicaUFitness/Fertilit /O tometr) $7,968.68

Luxur Fashions $18,643.50

Jewelr $25,391.26

TOTAL $240,625.63

Gange's misappropriation of funds

88. In October 2018 and February/March 2019 Gange spent over $100,000

in Nanotech funds to purchase two Maserati sport cars.

89. Gange also received $63,315.58 in direct transfers from Nanotech.

Additional Misappropriation of Funds

90. In addition to the amounts specified above, more than $100,000 of

investor funds were spent by the Defendants on obviously non-business items such

22

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 22 of 34 



as vaping products. At present, the SEC is not able to determine which individual

spent these funds, but regardless, investor funds were misappropriated for the

personal use of one or more of the principals of Nanotech. The chart below

summarizes the additional spending identified to date:

Other Company Misappropriations (Not Yet Attributed to a Specific
Individual Defendant

Yacht Related Ex enses $57,308.33

Cosmetic/Dermatolo $24,870.00

Va in /Tobacco $7,275.27

Beaut /S a $10,406.00

Other edicaUFitness/Fertilit /O tometr $2,682.00

Cash withdrawals $66,838.98

TOTAL $169,380.58

The Defendants Are Improperly Transferring Investor Funds

to the Relief Defendants, Which They Own and Control.

91. Nanotech transferred a total of at least $1,536,275 to entities in which

the Defendants had a beneficial interest.

Transfers to Nanotech Finance

92. Nanotech transferred a total of at least $650,000 to Nanotech Finance

via checks, as summarized in the chart below.

Pa ments to Nanotech Finance

Bank and artial account # Date T e of a ment Amount

1st Bank 6364 3/28/2019 COUNTER CHECK $110,000.00

lst Bank 6364 4/29/2019 Check Paid $92,474.00

1st Bank 6364 5/7/2019 Check Paid $17,950.00

1st Bank 6364 6/13/2019 Check Paid $150,000.00

1st Bank 6364 7/3/2019 Check Paid $128,000.00

1st Bank 6364 7/31/2019 Check Paid $1,112.00

1st Bank 6364 8/16/2019 Check Paid $127,525.00

lst Bank 6364 10/15/2019 Check Paid $25,000.00

TOTAL $652,061.00

23

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 23 of 34 



 

93. Nanotech Finance only received $300 in incoming funds from sources

other than Nanotech.

94. Nanotech Finance is owned and controlled by Gange.

95. Nanotech Finance's most recent bank records reflect that is a single

member LLC, and that the sole signer on the account is Gange. Gange also signed

documents submitted to the bank that identified Gange as the "Secretary /Member

/Manager" of Nanotech Finance.

96. Nanotech Finance's bank records indicate that after Nanotech Finance

received investor funds from Nanotech, $5,000 was transferred to Michael Sweaney,

$10,500 was transferred to Gange, and $12,000 was withdrawn as cash.

97. Additionally, a $457,394.75 check issued from a Nanotech Finance

account on July 23, 2019 remains outstanding and uncashed. Its whereabouts are

not known to the SEC.

Transfers to Omni Golf

98. Nanotech transferred total of at least $400,000 to Omni Golf via checks

as shown by the chart below.

Pa ments to Omni Golf

Bank and artial account # Date T e Amount

1st Bank 8930 9/24/2018 Check Paid $15,000.00

lst Bank 8930 9/25/2018 Check Paid $1,000.00

lst Bank 8930 11/16/2018 Check Paid $20,000.00

1st Bank 8930 12/17/2018 Check Paid $30,000.00

1st Bank 8930 1/30/2019 Check Paid $6,000.00

1st Bank 8930 2/22/2019 Check Paid $23,000.00

1st Bank 6364 3/20/2019 Check Paid $25,000.00

1st Bank 6364 3/21/2019 Check Paid $25,000.00

1st Bank 6364 3/22/2019 Check Paid $25,000.00

24

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 24 of 34 



Pa ments to Omni Golf
Bank and artial account # Date T e Amount

1st Bank 6364 4/18/2019 Check Paid $40,000.00

1st Bank 6364 5/13/2019 Check Paid $25,000.00

1st Bank 6364 5/24/2019 Check Paid $25,000.00

1st Bank 6364 6/4/2019 Check Paid $20,000.00

1st Bank 6364 6/14/2019 Check Paid $20,000.00

1st Bank 6364 6/25/2019 Check Paid $20,000.00

1st Bank 6364 7/11/2019 Check Paid $20,000.00

1st Bank 6364 7/31/2019 Check Paid $17,882.00

1st Bank 6364 8/15/2019 Check Paid $12,860.00

1st Bank 6364 8/26/2019 Check Paid $14,951.00

1st Bank 6364 9/26/2019 Check Paid $15,870.00

Total $401,563.00

99. Omni Golf only received $89,216 from sources other than Nanotech.

100. Omni Golf is controlled by Gange.

101. A Statement of Information for Omni Golf filed with the California

Secretary of State on February 28, 20181ists Gange as the sole member/manager of

Omni Gol£ Gange signed this Statement of Information.

102. An Articles of Organization for Omni Golf filed with the California

Secretary of State on February 6, 2018 was also signed by Gange as the "Organizer"

of Omni Golf.

103. In connection with opening a bank account for Omni Golf on

September 21, 2018, Gange signed multiple documents on behalf of Omni Golf,

including a certification that he was the CEO of Omni Golf and authorized to act on

behalf of Omni Golf.

104. Once funds were transferred from Nanotech to Omni Golf, at least

$18,000 was transferred to Gange, and other funds were used to purchase at least

25

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 25 of 34 



$112,000 in golf equipment, and at least $146,000 was used for "payroll" to

unknown persons.

Transfers to 3 Dragons

105. Nanotech transferred $480,000 to 3 Dragons via checks and one cash

transfer, as shown by the chart below.

Pa ments to 3 Dra ons LLC

Bank and Partial Account # Date T e Amount

1st Bank 8930 4/27/2018 Check Paid $11,000.00

1st Bank 8930 5/23/2018 Check Paid $50,000.00

1st Bank 8930 7/6/2018 Check Paid $2,500.00

1st Bank 8930 7/25/2018 Check Paid $3,729.00

1st Bank 8930 8/7/2018 Check Paid $2,500.00

1st Bank 8930 8/13/2018 Check Paid $30,000.00

1st Bank 8930 8/31/2018 Check Paid $2,500.00

1st Bank 8930 8/31/2018 Check Paid $7,500.00

1st Bank 8930 8/31/2018 Check Paid $7,500.00

1st Bank 8930 9/6/2018 Cash Withdrawal $3,800.00

1st Bank 8930 9/21/2018 Check Paid $49,600.00

1st Bank 8930 10/1/2018 Check Paid $2,500.00

1st Bank 8930 10/26/2018 Check Paid $305,000.00

1st Bank 8930 2/26/2019 Check Paid $3,218.69

1st Bank 6364 5/28/2019 Check Paid $1,303.42

Total $482,651.11

106. 3 Dragons is controlled by David Sweaney and two other individuals.

107. 3 Dragons only received $264,687 from sources other than Nanotech.

108. 3 Dragons' Articles of Organization were filed with the Colorado

Secretary of State on September 18, 2015. The documents list a woman with the

last name "Sweaney" as 3 Dragons' Organizer, and lists two additional3 Dragons'

members, including David Sweaney. David Sweaney is listed as having the same

home address as the Organizer.

26

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 26 of 34 



 

 

 

 

109. Documents from 3 Dragons' bank account list David Sweaney as the

sole signatory on the account.

110. Once funds were transferred from Nanotech to 3 Dragons, funds were

then transferred back to David Sweaney ($32,410) and Michael Sweaney ($189,904),

plus additional transfers to other persons with the last name Sweaney.

The Fraud Is Ongoing

111. Nanotech continues to solicit and receive investor funds, including the

recent transactions listed below (all of which are in addition to the amounts

described above):

• An October 28, 2019 incoming wire for $112,000 (equal to the

purchase price of 40,000 shares);

• A November 15, 2019 check for $28,000 deposited (with the

notation "10,000 shares");

• A November 15, 2019 deposit for $28,000 (equal to the purchase

price of 10,000 shares); and

• A November 22, 2019 incoming wire for $27,980 (potentially for the

purchase of 10,000 shares minus a wire transaction fee).

112. The Defendants also continue to divert funds, including the recent

transactions listed below (all of which are in addition to the amounts described

above):

• Spending $3,160 on dermatology on October 25, 2019;

27

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 27 of 34 



 

• Wiring over $15,000 to two entities with the same address as David

Sweaney on November 6, 2019; and

• Spending $6,849.38 at Ferrari and Maserati of Newport Beach on

November 14, 2019.

113. During the course of the scheme, the Defendants and Relief

Defendants have engaged in a practice of opening and closing different bank

accounts. If the emergency relief sought in this Complaint is not granted, investor

funds may be dissipated or transferred to unknown accounts, and investors may not

be able to recover their investments from the Defendants.

114. For example, the cashier's check for $457,394.75 of investor money

improperly transferred to Nanotech Finance remains outstanding and uncashed. Its

whereabouts are presently unknown.

CLAIMS FOR RELIEF

COUNT I

Violations of Section 17(a) of the Securities Act

(All Defendants)

115. The SEC realleges and incorporates by reference each allegation in

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

116. By engaging in the conduct that is described above, the Defendants

knowingly, recklessly, or negligently in connection with the offer or sale of

securities, by the use of the means or instruments of transportation, or

communication in interstate commerce or by use of the mails, directly or indirectly:

c. employed devices, schemes, or artifices to defraud;

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 28 of 34 



d. obtained money or property by means of untrue statements of material

facts, 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/or

e. engaged in transactions, practices, or courses of business which

operated or would operate as a fraud or deceit upon the purchaser.

117. By engaging in the foregoing conduct, the Defendants violated, and

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

77q(a)]-

CouNT II

Violations of Section 10(b) of the Exchange Act and Rule lOb-5 Thereunder

(All Defendants)

118. The SEC realleges and incorporates by reference each allegation in

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

119. By engaging in the conduct described above, the Defendant knowingly

or recklessly, in connection with the purchase or sale of securities, directly or

indirectly, by use the means or instrumentalities of interstate commerce, or the

mails, or the facilities of a national securities exchange:

(a) employed devices, schemes or artifices to defraud; and

(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/or

29

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 29 of 34 



(c) engaged in acts, practices, or courses of business which operated

or would operate as a fraud or deceit upon any person in

connection with the purchase or sale of any security.

120. By engaging in the foregoing conduct the Defendant violated, and

unless enjoined will continue to violate, Section 10(b) of the Exchange Act [15

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

CourrT III

Aiding and Abetting Violations of Section 17(a) of the Securities Act

(Defendants Michael James Sweaney, David Sweaney and Jeffery Gange)

121. The SEC realleges and incorporates by reference each allegation in

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

122. As alleged above, Defendant Nanotech and others violated Section

17(a) of the Exchange Act [15 U.S.C. § 77q(a)].

123. Through their deceptive conduct, misstatements, misappropriation of

funds and other means alleged above, Defendants Michael Sweaney, David

Sweaney and Gange knowingly provided substantial assistance to, and thereby

aided and abetted, Defendant Nanotech's violations of the securities laws.

124. By engaging the in the foregoing conduct, pursuant to Securities Act

Section 15(b) [15 U.S.C. § 77o(b)], Defendants Michael Sweaney, David Sweaney

and Gange violated, and unless enjoined will continue to violate violated Section

17(a) of the Securities Act [15 U.S.C. § 77q(a)].

X317

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 30 of 34 



COUNTIV

Aiding and Abetting Violations of Section 10(b) of the Exchange Act and
Rule lOb-5 Thereunder

(Defendants Michael James Sweaney, David Sweaney and Jeffery Gange)

125. The SEC realleges and incorporates by reference each allegation in

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

126. As alleged above, Defendant Nanotech and others violated Section

10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule lOb-5 [17 C.F.R. § 240.10b-

5], thereunder.

127. Through their deceptive conduct, misstatements, misappropriation of

funds and other means alleged above, Defendants Michael Sweaney, David

Sweaney and Gange knowingly provided substantial assistance to, and thereby

aided and abetted, Defendant Nanotech's violations of the securities laws.

128. By engaging the in the foregoing conduct, pursuant to Exchange Act

Section 20(e) [15 U.S.C. § 78t], Defendants Michael Sweaney, David Sweaney and

Gange violated, and unless enjoined will continue to violate violated Section 10(b) of

the Exchange Act [15 U.S.C. § 78j(b)] and Rule lOb-5 [17 C.F.R. § 240.1Ob-5],

thereunder.

COUNT V

Unjust Enrichment Liability

(Relief Defendants)

129. The SEC realleges and incorporates by reference each allegation in

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

31

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 31 of 34 



130. Relief Defendants Nanotech Finance, Omni Golf, and 3 Dragons have

obtained funds as part, and in furtherance, of the securities law violations alleged

above, and under circumstances in which it is not just, equitable, or conscionable for

these entities to retain the funds. As a result, these Relief Defendants have been

unjustly enriched.

PRAYER FOR RELIEF

WHEREFORE, the SEC respectfully requests that the Court enter an

emergency, temporary, and preliminary order against the Defendants:

i. temporarily freezing the Defendants' and Relief Defendants' assets;

ii. ordering the Defendants and Relief Defendants to show cause why a

preliminary injunction freezing such assets should not be entered;

iii. requiring the Defendants and Relief Defendants to provide a verified

accounting identifying:

a. the location and disposition of all funds received from investors;

b. the location and disposition of all accounts controlled by the

Defendants or held for their benefit; and

c. the location and value of all investor assets, as well as personal or

other assets currently held by the Defendants, or under their control or

over which they may exercise actual or apparent authority.

iv. prohibiting the Defendants from destroying, altering, or concealing records of

any kind; and

v. ordering expedited discovery.

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 32 of 34 



Further, the SEC respectfully requests that the Court enter a final judgment:

I.

Permanently restraining and enjoining all Defendants from, directly or

indirectly, violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a), and

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule lOb-5 thereunder

[17 C.F.R. § 240.1Ob-5];

II.

Ordering all Defendants and all Relief Defendants to disgorge all ill-gotten

gains or unjust enrichment derived from the activities set forth in this Complaint,

together with prejudgment interest thereon;

III.

Enter an order requiring the Defendants to pay civil penalties pursuant to

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

Exchange Act [15 U.S.C. § 78u(d)].

IV.

Enter an Order barring Michael Sweaney, David Sweaney, and Jeffery Gange

from serving as an officer or director of a public company pursuant to Section

21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)].

V.

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.

33

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 33 of 34 



VI.

Retaining jurisdiction of this action for purposes of enforcing any final

judgments and orders.

rTURY DEMAND

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

demands that this case be tried to a jury.

Respectfully submitted,

Gregory o kin (D.C. Bar No. 450885)
Christop Bruckmann (D.C. Bar No.
491136)
Pei Chung (Local Rule 83.2(e) certification
pending)
Elizabeth Doisy
U.S. SECURITIES AND
EXCHANGE COMMISSION
Division of Enforcement
100 F Street, N.E.
Washington, DC 20549
(202) 551-5684 (Bockin)
(202) 772-9292 (facsimile)
BockinG(~SEC.gov

Counsel for Plaintiff
U.S. Securities and Exchange Commission

Dated: December 5, 2019

Case 1:19-cv-03633-ABJ Document 3 Filed 12/05/19 Page 34 of 34 



 

   
 

 

 

 

 
 

 

 

 

 

 

 
 

 

 

 

 

 

 

 

 

 

  

 
  

 

 

 

   

 

 

rc~rrr~r~~r~T~i
CIVIL COVER SHEET

I. (a) PLAINTIFFS DEFENDANTS

UNITED STATES SECURITIES AND EXCHANGE NANOTECH ENGINEERING, INC., MICHAEL JAMES
COMMISSION SWEANEY (also known as Michael Hatton), DAVID

SWEANEY, and JEFFREY GANGE

(b) COUNTY OF RESIDENCE OF FIRST LISTED PLAINTIFF COUNTY OF RESIDENCE OF FIRST LISTED DEFENDANT ORAN G E

(EXCEPT IN U.S. PLAINTIFF CASES)
NOTE: IN LAND CONDEIvIIJATION c pesAu eTrt~ ocnnON OFOTHE TRACT OF LAND INVOLVED

(c) ATTORNEYS (FIRM NAME, ADDRESS, AND TELEPHONE NUMBER) ATTORNEYS (IF KNOWN)

GREGORY BOCKIN
U.S. SECURITIES AND EXCHANGE COMMISSION
100 F STREET, NE, WASHINGTON, DC 20549
(202) 551-5684

II. BASIS OF JURISDICTION III. CITIZENSHIP OF PRINCIPAL PARTIES (rLnCE arr X trr orrE aox Fox
(PLACE AN x IN ONE BOX ONLl~ PLAINTIFF AND ONE BOX FOR DEFENDANT) FOR DIVERSITY CASES ONLY!

O 1 U.S. Government O 3 Federal Question
PTF DFT PTF

~ 1 ~ 1 ~ 4

DFT
O

4Plaintiff (U.S. Government Not a Party) Citizen of this State Incorporated or Principal Place
of Business in This State

O 2 U.S. Government Q 4 Diversity Citizen of Another State Q 2 ~ 2 Incorporated and Principal Place 0 5 Q 5
Defendant (Indicate Citizenship of of Business in Another State

Parties in item III) Citizen or Subject of a 3 3 
Q 64 ~ 6Foreign Country Foreign Nation

IV. CASE ASSIGNMENT AND NATURE OF SUIT
(Place an X in one category. A-N. that best represents your Cause of Action and one in a corresoondine Nature of Suitl

~ A. Antitrust ~ B. Personal Injury/ ~ C. Administrative Agency ~ D. Temporary Restraining

Malpractice Review Order/Preliminary

Q410 Antitrust Q 310 Airplane Q 151 Medicare Act
Injunction

Q315 Airplane Product Liability Any nature of suit from any category
Q320 Assault Libel &Slander Social Securiri

Q861 HIA (1395f~
may be selected for this category of

Q330 Federal Employers Liability ~ g62 Black Lung (923)
case assignment.

Q340 Marine

Q345 Marine Product Liability 0 863 DIWC/DIWW (405(g)) *(IfAntitrust, then A governs)*

Q350 Motor Vehicle 0 864 SSID Title XVI

Q355 Motor Vehicle Product Liability 0 
865 RSI (405(g))

Q360 Other Personal Injury
Other Statutes
Q891 Agricultural Acts

Q362 Medical Malpractice
Q 893 Environmental Matters

Q365 Product Liability

Q367 Health Care/Pharmaceutical
0 g90 Other Statutory Actions (If

Personal Injury Product Liability
Administrative Agency is

Q368 Asbestos Product Liability
Involved)

Q E. Genera! Civil (Other) OR ~ F. Pro Se General Civil

Real Proaerty Bankruatcv Federal Tax Suits Q 462 Naturalization
0210 Land Condemnation Q 422 Appeal 27 USC 158 0 870 Taxes (US plaintif7or Application
Q220 Foreclosure Q 423 Withdrawal 28 USC 157 defendant) 0 465 Other Immigration
Q230 Rent, Lease &Ejectment Q 871 IRS-Third Party 26 USC Actions
Q240 Torts to Land Prisoner Petitions

535 Death Penalty
7609 ~ 470 Racketeer Influenced

Q245 Tort Product Liability

Q290 All Other Real Property ~ 540 Mandamus &Other Forfeiture/Penalty
&Corrupt Organization

0480 Consumer Credit
550 Civil Rights Q 625 Drug Related Seizure of

0 490 Cable/Satellite TV
Personal Proaerty ~ 555 Prison Conditions

~

Pro er 21 USC 881
P Ty

Q690 Other
0 g50 Securities/Commodities/

Q370 Other Fraud 560 Civil Detainee —Conditions Exchange
Q371 Truth in Lending of Confinement

Other Statutes Q 896 Arbitration
Q380 Other Personal Property

Q 375 False Claims Act Q 899 Administrative Procedure
Damage

Q385 Property Damage

Pro er Ri hts
820 Copyrights Q 376 Qui Tam (31 USC Act/Review or Appeal of

Product Liability 0 830 Patent

Q835 Patent— Abbreviated New

3729(a))

0400 State Reapportionment

Agency Decision

Q950 Constitutionality of State

Drug Application Q 430 Banks &Banking Statutes

Q840 Trademark Q 450 Commerce/ICC Q 890 Other Statutory Actions

Rates/etc. (if not administrative agency

Q460 Deportation review or Privacy Act)

Case 1:19-cv-03633-ABJ Document 3-1 Filed 12/05/19 Page 1 of 2 



 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

~ G. Habeas Corpus/ O H. Employment ~ I. FOIA/Privacy Act ~ J. Student Loan
2255 Discrimination

Q530 Habeas Corpus —General

Q510 MotionNacate Sentence

Q463 Habeas Corpus —Alien

Detainee

Q K. Labor/ERISA
(non-employment)

Q710 Fair Labor Standards Act

Q720 Labor/Mgmt. Relations

Q740 Labor Railway Act

Q751 Family and Medical

Leave Act

0790 Other Labor Litigatlon

Q791 Empl. Ret. Inc. Security Act

V. ORIGIN

Q 442 Civil Rights —Employment

(criteria: race, gender/sex,

national origin,

discrimination, disability, age,

religion, retaliation)

(If pro se, select this deck)*

L. Other Civil Rights
(non-employment)

Q441 Voting (if not Voting Rights

Act)
443 Housing/Accommodations

Q440 Other Civil Rights

Q445 Americans w/Disabilities—

Employment

0446 Americans w/Disabilities —

Other

448 Education

Q 895 Freedom of Information Act ~ 152 Recovery of Defaulted
Q890 Other Statutory Actions Student Loan

(if Privacy Act) (excluding veterans)

*(If pro se, select this deck)*

0 M. Contract Q N. Three-Judge
Court

Q110 Insurance

Q120 Marine

Q130 Miller Act

0140 Negotiable Instrument

Q150 Recovery of Overpayment

&Enforcement of

Judgment

Q153 Recovery of Overpayment

of Veteran's Benefits

Q160 Stockholder's Suits

Q190 Other Contracts

Q195 Contract Product Liability

Q196 Franchise

0 441 Civil Rights —Voting

(if Voting Rights Act)

Q 1 Original ~ 2 Removed Q 3 Remanded Q 4 Reinstated Q 5 Transferred Q 6Multi-district Q 7 Appeal to Q SMulti-district
Proceeding from State from Appellate or Reopened from another Litigation District Judge Litigation —

Court Court district (specify) from Mag. Direct File
Judge

VI. CAUSE OF ACTION (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE A BRIEF STATEMENT OF CAUSE.)

15 U.S.C. §§ 77q(a), 78j(b), 77o(b), 78t. Violation of United States securities laws.

VII. REQUESTED W CHECK IF THIS IS A CLASS DEMAND $ Check YES only if demanded in complaint

COMPLAINT 
ACTION UNDER F.R.C.P. 23 ,NRY DEMAND: YES ~ NO

VIII. RELATED CASES) (see instruction) YES ~ NO ~ If yes, please complete related case form

IF ANY

DATE: 12/5/2019 I SIGNATURE OF ATTORNEY OF RECORD

INSTRUCTIONS FOR COMPLETING CIVIL COVER SHEET JS-44
Authority for Civil Cover Sheet

The JS-44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and services of pleadings or other papers as required
by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the

Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed.
Listed below are tips for completing the civil cover sheet. These tips coincide with the Roman Numerals on the cover sheet.

I. COiJNTY OF RESIDENCE OF FIRST LISTED PLAINTIFF/DEFENDANT (b) County of residence: Use 11001 to indicate plaintiff if residcnt
of Washington, DC, 88888 if plaintiff is resident of United States but not Washington, DC, and 99999 if plaintiff is outside the United States.

III. CITIZENSHIP OF PRINCIPAL PARTIES: This section is completed only if diversity of citizenship was selected as the Basis of Jurisdiction
under Section II.

IV. CASE ASSIGNMENT AND NATURE OF SUIT: The assignment of a judge to your case will depend on the category you select that best
represents the rip mart' cause of action found in your complaint. You may select only one category. You must also select one corresponding
nature of suit found under the category of the case.

VI. CAUSE OF ACTION: Cite the U.S. Civil Statute under which you aze filing and write a brief statement of the primary cause.

VIII. RELATED CASE(S), IF ANY: If you indicated that there is a related case, you must complete a related case form, which may be obtained from
the Clerk's Office.

Because of the need for accurate and complete information, you should ensure the accuracy of the information provided prior to signing the form.

Case 1:19-cv-03633-ABJ Document 3-1 Filed 12/05/19 Page 2 of 2