SEC v. Bio Defense Corporation; Michael Lu; Jonathan Morrone; Z. Paul Jurberg; Brett Hamburger; Anthony Orth, et al., No. 1:12-cv-11669, Eastern District of New York (Sept. 10, 2012) — Complaint

UNITED STATES DISTRICT COURT 
DISTRICT OF MASSACHUSETTS 
 
__________________________________________ 
       ) 
SECURITIES AND EXCHANGE       ) 
COMMISSION,     ) 
       ) 
   Plaintiff,   ) Civil Action No. 
       )       
v.      ) 
       ) 
BIO DEFENSE CORPORATION,      ) JURY TRIAL DEMANDED 
MICHAEL LU, Individually and Doing   ) 
Business as MAY’S INTERNATIONAL   ) 
CORPORATION, JONATHAN MORRONE,  ) 
Individually and Doing Business As    ) 
JM INTERNATIONAL, INC., Z. PAUL   )   
JURBERG, Individually and Doing Business As  )  
BROOKLINE CAPITAL PARTNERS, INC., ) 
BRETT HAMBURGER, Individually   ) 
and Doing Business As JCBH    ) 
CONSULTING, LLC, ANTHONY ORTH,   ) 
Individually and Doing Business As     ) 
GRAND TRAVERSE EQUITIES, INC.,  ) 
       ) 
   Defendants,       ) 
       ) 
and      ) 
       ) 
MAY’S INTERNATIONAL CORPORATION, ) 
       ) 
   Relief Defendant.  ) 
       ) 
       ) 
 
COMPLAINT 
Plaintiff Securities and Exchange Commission (the “Commission”) alleges the following 
against defendants Bio Defense Corporation (“Bio Defense”), Michael Lu, individually and 
doing business as May’s International Corporation (“Lu”), Jonathan Morrone, individually and 
doing business as JM International, Inc. (“Morrone”), Z. Paul Jurberg, individually and doing 

  
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business as Brookline Capital Partners, Inc. (“Jurberg”), Brett Hamburger, individually and 
doing business as JCBH Consulting, LLC (“Hamburger”), Anthony Orth, individually and doing 
business as Grand Traverse Equities, Inc. (“Orth”), and relief defendant May’s International 
Corporation (“May’s International”): 
SUMMARY 
1. This case is about a small company that became a deceptive vehicle for promoting 
a scheme to defraud.  The company, Bio Defense, originated as a start-up proposing to develop 
and manufacture a machine that irradiated mail in order to destroy pathogens, such as anthrax.  
From inception, the company has funded itself through the unlawful unregistered offering and 
sale of its securities.  In making offers and sales of these unregistered securities from 2004 
through August 2008, Bio Defense’s principal officers, Defendants Michael Lu, Jonathan 
Morrone, and Paul Jurberg, have made false claims that Bio Defense employees and officers 
were not being paid cash for their efforts on behalf of the company, deferring their compensation 
until the company became profitable or underwent an initial public offering of stock.  In reality, 
during these years, Bio Defense’s largest expense was the money that it paid to its executives, 
much of which was paid to Lu, Morrone and Jurberg. 
2. By the spring of 2008, Bio Defense, Lu, Morrone and Jurberg attracted the 
attention of state securities regulators.  After the entry of a cease and desist order in Texas and 
receiving a subpoena from the Massachusetts Securities Division, Bio Defense, Lu, Morrone and 
Jurberg decided to focus the company’s securities sales activities overseas. 
3. In pursuit of this overseas sales activity, beginning in August 2008, the defendants 
began an operation that transformed the company into a deceptive scheme to defraud investors.  
Bio Defense, through Lu, Morrone and Jurberg, engaged the services of Brett Hamburger, an 

  
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individual previously convicted of conspiracy to commit securities fraud, and Anthony Orth, a 
self-described “marketer.”  Hamburger and Orth, in turn, connected Bio Defense with a series of 
international boiler-room operations that would offer and sell Bio Defense’s securities overseas 
in exchange for payment of seventy five percent of all money raised from investors.  Bio 
Defense began this fraudulent scheme by entering a deceptive “business alliance agreement” 
with Agile Consulting, a purported Cyprus-based firm.  The terms of the deceptive agreement 
used vague and indefinite language, leaving silent the material facts that (1) Agile would provide 
boiler-room call centers to solicit offers to purchase Bio Defense securities; and (2) these boiler-
rooms would charge Bio Defense an exorbitant fee in the amount of seventy-five percent of all 
money raised.  In addition to this deceptive “business alliance agreement,” Bio Defense agreed to 
pay Hamburger and Orth an additional fee for arranging and managing the relationship between 
Bio Defense and various boiler-room call center operations.  These agreements provided that 
Hamburger would be paid twelve and a half percent and Orth would be paid fifteen percent of 
the net investor proceeds received by Bio Defense after the boiler-room operators’ cut. 
4. In furtherance of this scheme to defraud, Bio Defense, through its principal 
officers, solicited offers from, and sold Bio Defense securities to, persons contacted by the 
boiler-room call centers and, in doing so, knowingly made false and misleading statements about 
Bio Defense’s securities offering and the expenses associated with the offering. 
5. Through this scheme to defraud, Defendants transformed Bio Defense from a 
legal business enterprise into a deceptive and fraudulent device.  By partnering with Agile and 
the other boiler-room call centers and paying their exorbitant transaction-based fees, Bio Defense 
became a deceptive Trojan-horse whose primary purpose served to defraud investors and enrich 
the company’s fraudulent promoters.  From August 2008 through July 2010, the defendants, 

  
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working in concert amongst each other and with the boiler-room operators, raised a total of $11.9 
million from investors.  Bio Defense ultimately paid over $8 million of that money to the boiler-
room operators, Hamburger and Orth.            
6. By engaging in the conduct alleged herein, Bio Defense, Lu, Morrone, Jurberg 
and Orth violated Sections 5(a), 5(c) and 17(a)(1), (2), and (3)  of the Securities Act of 1933 
(“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) 
and Rule 10b-5(a), (b) and (c) thereunder; Lu, Morrone, Jurberg, and Orth violated Sections 
15(a)(1) of the Exchange Act; in the alternative, Lu and Morrone are liable as control persons 
under Section 20(a) of the Exchange Act for Bio Defense’s violations of Section 17(a) of the 
Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and 
Hamburger violated Section 17(a)(1) and (3) of the Securities Act, and Sections 15(a)(1) and 
10(b) of the Exchange Act and Rule 10b-5(a) and (c) thereunder. 
7. Based on these violations, the Commission seeks:  (1) entry of a permanent 
injunction prohibiting Defendants from further violations of the relevant provisions of the federal 
securities laws; (2) disgorgement of Defendants’ ill-gotten gains, plus pre-judgment interest; (3) 
disgorgement by relief defendant May’s International of all unjust enrichment and/or ill-gotten 
gain received, plus prejudgment interest; (4) the imposition of a civil monetary penalty due to the 
egregious nature of Defendants’ violations, and (5) the imposition of officer and director bars 
against Lu, Morrone, Jurberg, and Orth. 
JURISDICTION AND VENUE 
 
8. The Commission brings this action pursuant to the enforcement authority 
conferred upon it by Section 20(b) of the Securities Act [15 U.S.C. §77t(b)] and Section 21(d) of 
the Exchange Act [15 U.S.C. §§78u(d)].  This Court has jurisdiction over this action pursuant to 

  
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28 U.S.C. §1331, Section 22(a) of the Securities Act [15 U.S.C. §77v(a)] and Sections 21(d) and 
(e) and 27 of the Exchange Act [15 U.S.C. §§78u(e) and 78aa].   
9. Venue is proper in this district pursuant to 28 U.S.C. §1391(b)(2), 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] 
because a substantial part of the acts constituting the alleged violations occurred in the District of 
Massachusetts, because all of the Defendants transacted business in Massachusetts, because Lu, 
Morrone, and Jurberg live in Massachusetts, and because the principal place of business of Bio 
Defense is in Massachusetts.  
10. In connection with the conduct alleged in this Complaint, Defendants directly or 
indirectly made use of the means or instruments of transportation or communication in interstate 
commerce, the facilities of a national securities exchange, or the mails.  
11. Defendants’ conduct involved fraud, deceit, or deliberate or reckless disregard of 
regulatory requirements, and resulted in substantial loss, or significant risk of substantial loss, to 
other persons. 
12. Unless enjoined, Defendants will continue to engage in the securities law 
violations alleged herein, or in similar conduct that would violate the federal securities laws. 
DEFENDANTS 
13. Bio Defense Corporation is a Delaware corporation with a principal place of 
business located at 12 Channel Street, Boston, Massachusetts.  Neither Bio Defense nor its 
securities offerings have ever been registered with the Commission. 
14. Michael Lu, age 57, is a resident of Lexington, Massachusetts.  Lu was the 
founder of Bio Defense and, from its inception until mid-July 2011, served as the company’s 
CEO and as the Chairman of its board of directors.  Lu is also the President and Treasurer of 

  
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May’s International Corporation (“May’s International”), through which Bio Defense paid Lu 
compensation.  Lu has never been associated with a registered broker or dealer.  In 2008, the 
Texas State Securities Board ordered Lu to cease and desist from offering to sell Bio Defense’s 
unregistered securities in violation of Sections 7 and 12 of the Texas Securities Act.  During the 
period of misconduct alleged in this Complaint, Lu was heavily involved in Bio Defense’s day-
to-day operations and had ultimate authority over its officers’ and agents’ actions and statements. 
15. Jonathan Morrone, age 45, is a resident of Newton, Massachusetts.  From 2002 
through 2011, Morrone served as the only Senior Executive Vice President at Bio Defense and as 
a member of the company’s board of directors.  Morrone is also the principal of JM 
International, Inc., a now-defunct Delaware corporation, through which Bio Defense paid 
Morrone compensation.  Morrone was affiliated as a registered representative with various 
brokerage firms from 1994 to August 2007.  Although Morrone was a registered representative 
associated with a broker-dealer until August 2007, his activities in offering and selling Bio 
Defense securities during the time of his association, as alleged in this Complaint, were outside 
the scope of his association with the registered broker-dealer and not under the supervision or 
approval of the broker-dealer with which he was associated.  In 2008, the Texas State Securities 
Board ordered Morrone to cease and desist from offering to sell Bio Defense’s unregistered 
securities in violation of Sections 7 and 12 of the Texas Securities Act. 
16. Z. Paul Jurberg, age 65, is a resident of Brookline, Massachusetts.  From at least 
2003 through the present, Jurberg has served as a senior officer of Bio Defense, most recently as 
a Senior Vice President, Sales and Marketing.  From February 2000 through March 2006, 
Jurberg was President of Brookline Capital Partners, Inc., a now-defunct Massachusetts 
corporation, through which Bio Defense paid Jurberg compensation. Jurberg was a registered 

  
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representative with various brokerage firms from 1985 to 1997.  Jurberg has not been associated 
with a registered broker or dealer since at least 1998.  In 2008, the Texas State Securities Board 
ordered Jurberg to cease and desist from offering to sell Bio Defense’s unregistered securities in 
violation of Sections 7 and 12 of the Texas Securities Act.   
17. Anthony Orth, age 42, is a resident of Tustin, California.  From 2007 through 
2011, Orth served Bio Defense as its Vice President, Marketing.  In 2003, Orth incorporated 
Grand Traverse Equities, Inc. (“Grand Traverse”) as a Michigan corporation and served as its 
President until July 2007, when it was dissolved by law for failure to file annual reports.  Bio 
Defense paid Orth compensation through Grand Traverse.  Orth has not been associated with a 
registered broker or dealer since 1995. 
18. Brett Hamburger, age 41, is a resident of Delray Beach, Florida.  In July 2009, 
Hamburger formed JCBH Consulting, LLC, which has also been known as JCB Consulting and 
JBC Consulting, (hereinafter, “JCBH Consulting”), a Florida limited liability company, and 
served as its manager until the company was administratively dissolved in September 2010 for 
failure to file annual reports.  Bio Defense paid Hamburger compensation through JCBH 
Consulting.  From 1989 to 1997, Hamburger was affiliated as a registered representative with 
various brokerage firms, but was barred by the National Association of Securities Dealers in 
October 2000 as a result of, among other things, acting as an unregistered broker.  Hamburger 
has not been associated with a registered broker or dealer since at least 1997.  In March 2003, the 
United States District Court for the Eastern District of New York adjudged Hamburger guilty of 
conspiracy to commit securities fraud.  The Court sentenced Hamburger to serve 10 months of 
home detention and placed him on 5 years of probation. 

  
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RELIEF DEFENDANT 
19. May’s International Corporation is a Delaware corporation.  Lu is the President 
and Treasurer of May’s International.  From at least January 2004 through 2010, Lu received Bio 
Defense compensation through May’s International. 
FACTUAL ALLEGATIONS 
20. Incorporated in 2001, Bio Defense purports to be in the business of developing, 
manufacturing and selling the “MailDefender,” a machine that allegedly processes packets of 
mail to render deadly pathogens, such as anthrax, inert.   
21. While Bio Defense’s “operations” have generated approximately $26.8 million in 
cash payments to the company from 2004 through early 2011, only a small fraction of that cash 
has been income generated from the sales of its purported product.  Instead, $26.2 million, or 
ninety-seven percent of this cash has been generated from the unlawful unregistered offering and 
sale of Bio Defense securities to investors.   
22. Bio Defense has never generated profit.  Since 2004, each year it has generated 
over $2 million in losses.  In 2008 and 2009, the company generated net losses of over $5 
million.   
23. Despite the lack of financial success, from 2004 through 2010, Bio Defense has 
handsomely paid its senior officers, either directly or through their business entities.  The 
company has paid Lu over $1.6 million, Morrone approximately $1.3 million, and  Jurberg 
approximately $1.2 million. 
I. The Unlawful Offer and Sale of Bio Defense’s Unregistered Securities from 2004 
through August 2008. 
24. The unregistered offering and sale of Bio Defense’s securities from 2004 through 
August 2008 was perpetrated by Bio Defense through Lu, Morrone and Jurberg.  

  
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25. During that time, Lu, Morrone, and Jurberg solicited investors directly, or 
indirectly through third-parties, by telephone, regular mail, or electronic mail for offers to 
purchase Bio Defense securities.   
26. Bio Defense paid Lu, Morrone and Jurberg transaction-based compensation for 
the money successfully raised from the sale of Bio Defense securities.  According to Bio 
Defense, the compensation with respect to selling company shares generally ranged between five 
and ten percent of the amount raised.  On occasion the amount would be twenty percent if more 
than one individual was involved in the selling effort. 
II. The No-Financial-Compensation Lie. 
27. During this period from 2004 through August 2008, Lu, Morrone and Jurberg 
knowingly or recklessly solicited investors and obtained their investments by means of false or 
misleading statements about whether Bio Defense employees were receiving financial 
compensation from the company.  As a start-up company with few product sales and ongoing 
development issues, one of the biggest issues for Bio Defense and its investors was the 
company’s use of its limited cash, most of which was raised from investors.  Lu, Morrone, and 
Jurberg knowingly or recklessly created a false impression with potential investors that Bio 
Defense preserved its cash assets by having employees who worked for no, or very little, pay, 
suggesting that these employees were working solely or primarily for “sweat equity” shares, 
which might later become valuable when the company became profitable or went public. 
28. For example, in the course of soliciting an offer to purchase Bio Defense 
securities from Investor A in the fall of 2004, Lu and Morrone told Investor A that none of the 
Bio Defense employees received paychecks in Bio Defense’s history.  Lu and Morrone knew or 
were reckless in disregarding the fact that this statement was materially false and misleading.  In 

  
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fact, in 2004 alone, Bio Defense paid approximately $1 million in compensation to its officers 
and employees, well over half of which was paid to Lu, Morrone and Jurberg.  By September of 
2004, Bio Defense had already paid $192,000 to Lu, $114,000 to Morrone, and $82,000 to 
Jurberg.  By the end of 2004, Bio Defense paid Lu over $385,000, Morrone over $222,000, and 
Jurberg over $160,000.  The omitted fact that Bio Defense was paying its employees several 
hundred thousand dollars in compensation was a material fact that would have assumed actual 
significance in the deliberations of a reasonable investor.  Following these false and misleading 
statements by Lu and Morrone, Investor A purchased Bio Defense securities in exchange for 
payment of $20,000.   
29. As a further example, in the course of soliciting an offer to purchase Bio Defense 
securities from Investor B in the fall of 2004, Lu, Morrone, and Jurberg told Investor B that 
employees were not getting paid.  Lu, Morrone and Jurberg knew or were reckless in 
disregarding the fact that this statement was materially false and misleading.  In fact, in 2004 
alone, Bio Defense paid approximately $1 million in compensation to its officers and employees, 
well over half of which was paid to Lu, Morrone and Jurberg.  By September of 2004, Bio 
Defense had already paid $192,000 to Lu, $114,000 to Morrone, and $82,000 to Jurberg.  By the 
end of 2004, Bio Defense paid Lu over $385,000, Morrone over $222,000, and Jurberg over 
$160,000.  The omitted fact that Bio Defense was paying its employees several hundred 
thousand dollars in compensation was a material fact that would have assumed actual 
significance in the deliberations of a reasonable investor.  Following these false and misleading 
statements by Lu, Morrone and Jurberg, Investor B purchased Bio Defense securities in 
exchange for payment of $20,000. 

  
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30. As a further example, in the course of soliciting an offer to purchase Bio Defense 
securities from Investor C in 2006, Lu, Morrone, and Jurberg told Investor C that no one at the 
company was being paid, other than an engineer A.N. who was receiving a small salary.  Lu, 
Morrone and Jurberg also told Investor C that they were only receiving shares of Bio Defense 
stock for their efforts on behalf of the company.  Lu, Morrone and Jurberg knew or were reckless 
in disregarding the fact that these statements were materially false and misleading.  In 2004, Bio 
Defense paid approximately $1 million in compensation to its officers and employees, well over 
half of which was paid to Lu, Morrone and Jurberg.  That year, Lu received approximately 
$385,000 in compensation.  Morrone received approximately $233,000 in compensation.  
Jurberg received approximately $161,000 in compensation.  In 2005, Bio Defense paid 
approximately $980,000 to its employees and officers, well over half of which was paid to Lu, 
Morrone and Jurberg.  In 2005, Lu received approximately $203,000 in compensation.  Morrone 
received approximately $177,000 in compensation.  Jurberg received approximately $190,000 in 
compensation.  The omitted fact that Bio Defense had been paying its employees several 
hundred thousand dollars a year in compensation, for a total of over $2 million for the previous 
two years, was a material fact that would have assumed actual significance in the deliberations of 
a reasonable investor.  Following these false and misleading statements by Lu, Morrone and 
Jurberg, Investor C purchased Bio Defense securities in exchange for payments totaling 
approximately $225,000. 
III. Bio Defense Attracts Attention of State Regulators. 
31. Between at least March 2005 and September 2007, Lu, Morrone, and Jurberg, 
acting directly and through a third-party agent, offered and sold shares of Bio Defense stock in 
Texas, in violation of Sections 7 and 12 of the Texas Securities Act. 

  
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32. On March 28, 2008, Lu, Morrone and Jurberg entered an “agreed cease and desist 
order,” with the Texas State Securities Board, pursuant to which they consented to entry of 
findings of fact and conclusions of law that they offered and sold Bio Defense’s stock in Texas 
in violation of the Texas Securities Act.  They also agreed to cease and desist from offering or 
selling any security in Texas in violation of Texas law. 
33. In the spring of 2008, Bio Defense received a subpoena from the Massachusetts 
Securities Division.  In October 2008, the Massachusetts Securities Division filed an 
administrative complaint against Bio Defense and Lu, alleging, among other things, that Bio 
Defense, Lu, Morrone and Jurberg had unlawfully sold unregistered Bio Defense securities to 
Massachusetts residents.  The complaint further alleged that Bio Defense had paid Lu, Morrone 
and Jurberg transaction-based compensation for their efforts in the offer and sale of these 
securities. 
IV. Bio Defense’s Transformation into a Deceptive Scheme to Defraud.  
34. After receiving notice of the Texas and Massachusetts regulator inquiries, Bio 
Defense, Lu and Morrone decided that it would be more advantageous to offer and sell Bio 
Defense’s securities to potential investors located outside the United States.  To that end, 
although Bio Defense continued to sell some securities in the United States, sometime in the first 
seven months of 2008, Bio Defense, Lu and Morrone sought the guidance and assistance of 
defendants Brett Hamburger and Anthony Orth to formulate a plan to offer and sell Bio 
Defense’s securities overseas.  In turn, Hamburger and Orth connected Bio Defense with a series 
of international boiler-room operations that would offer and sell Bio Defense’s securities 
overseas in exchange for payment of seventy five percent of all money raised from investors.  By 
agreeing to pay boiler-room call centers seventy five percent of every dollar raised, the 
defendants transformed the company into a deceptive scheme to defraud investors. 

  
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35. Brett Hamburger is a felon.  In March 2003, the United States District Court for 
the Eastern District of New York adjudged Hamburger guilty of conspiracy to commit securities 
fraud.  The Court ordered Hamburger to pay restitution in the amount of $290,000 as well as 
monthly payments of $500 to the Court and of another $500 to a particular victim for five years.   
The Court also sentenced Hamburger to serve 10 months of home detention and placed him on 5 
years of probation.  Hamburger’s probation therefore ended March 31, 2008.   
36. In 2008, both Lu and Morrone knew that Hamburger was a felon and that his 
conviction related to securities fraud.  Hamburger had told them. 
37. Two years earlier, in 2006, Lu and Morrone both provided support to Hamburger 
in a request to modify his criminal sentence.  Lu appeared at the modification hearing as 
Hamburger’s “employer.”  Morrone provided Hamburger’s defense counsel with information 
concerning the purported value of Bio Defense stock.  As part of the sentence modification 
request, Hamburger attempted to offer his previous victims shares of Bio Defense stock as a 
form of restitution.  Despite Morrone’s proffer of estimated value, the District Court rejected 
Hamburger’s offer to provide Bio Defense stock as a form of restitution to his previous securities 
fraud victims. 
38. Despite knowledge of Hamburger’s previous conviction for securities fraud, in 
early 2008, Bio Defense, Lu and Morrone relied on him and Orth to find Bio Defense a means 
for offering and selling the company’s securities overseas. 
39. In approximately August 2008, Hamburger introduced Lu, Morrone and Jurberg 
to Daniel Marsh Consultors, S.L., which purported to be European subsidiary of Agile 
Consultants, Ltd., a company purported to be located in Cyprus (collectively, “Agile 
Consultants”).  Lu, Morrone and Jurberg learned through Hamburger that Agile would offer and 

  
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sell Bio Defense’s securities to potential investors overseas in exchange for payment of seventy-
five percent of all money raised. 
40. Through Hamburger, Agile provided Bio Defense, Lu and Morrone with a 
proposed “Business Alliance” agreement.  The agreement itself made no mention of the real 
reason Bio Defense was hiring Agile: to solicit overseas investors for offers to purchase Bio 
Defense stock.  It also made no mention of the exorbitant seventy-five-percent fee.  Instead, the 
agreement provided vague and indefinite terms, which were designed to mask the unlawful 
activity to which the parties would enter agreement. 
41. On August 1, 2008, Bio Defense entered the business alliance agreement with 
Agile.  Although Lu was the only Bio Defense officer to sign the deceptive agreement, Lu, 
Morrone, Jurberg and Hamburger knew that they and the company were agreeing to have Bio 
Defense’s securities offered and sold in Europe by an allegedly Cypress-based entity that would 
be paid seventy-five percent of all money raised.  In addition, as will be explained in further 
detail below, Bio Defense and its officers agreed and knew that they and the company would be 
following up these call center solicitations with direct offers of securities from Bio Defense 
itself, which required their substantial participation in the scheme.  While Agile and its boiler 
rooms would be making initial solicitations for offers to purchase Bio Defense securities, Bio 
Defense and its officers would be responsible for (i) sending out investor offering documents to 
solicited investors, (ii) receiving proposed subscription agreements from prospective investors, 
(iii) receiving investor money in connection with those proposed subscription agreements, (iv) 
issuing Bio Defense stock certificates for completed agreements, (v) distributing seventy-five 
percent of every dollar received to Agile and its boiler-room operators, and (vi) responding to 
inquiries from prospective investors and investors.  As described below, during the course of this 

  
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scheme, Lu, Morrone and Jurberg all substantially participated in these home office activities to 
support the scheme to defraud facilitated by Hamburger, Orth and their international call centers. 
42. Hamburger managed the call center activities for Bio Defense and coordinate 
communications between the boiler-rooms and Bio Defense.  For this management and 
coordination, Bio Defense agreed to pay Hamburger a fee of twelve and a half percent of the net 
investor proceeds retained by the company after payment of the boiler-room call centers. 
43. As discussed below, Orth eventually assumed Hamburger’s role in identical 
fundraising projects for Bio Defense.  For his management and coordination, Bio Defense agreed 
to pay Orth a fee of fifteen percent of the net investor proceeds retained by the company after 
payment of the boiler-room call centers. 
A. Preparation Activities 
44. Contemporaneously with the signing of the Agile business alliance agreement, 
Bio Defense, Lu, Morrone, Jurberg, Hamburger and Orth worked together to prepare the process 
for capitalizing on the initial high-pressure solicitations of potential overseas investors. 
45. Hamburger, Morrone and Lu oversaw the creation of a “weekly report” designed 
to track investors solicited by the boiler-room operations.  The report tracked the date of 
solicitation, the name of the solicited investor, the amount of money committed by the investor, 
the number of shares sold, and the assignment of a “reference” number to track the particular 
solicitations and investments.  The weekly report actually used by the defendants included 
additional columns for identification of wire transfer payees as well as calculation of the seventy-
five percent fee owed to Agile each week.   
46. Hamburger and Morrone worked together to create a form solicitation letter, 
under Morrone’s signature, to be sent to prospective investors.   

  
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47. Morrone also provided Hamburger with Bio Defense offering documents, 
including multiple draft copies of a Bio Defense subscription agreement.  Morrone also provided 
Hamburger with “key corporate updates” for use by the boiler-room operations in soliciting 
offers to purchase Bio Defense securities. 
48. Jurberg provided company letterhead to Hamburger for use by the boiler-rooms in 
soliciting potential Bio Defense investors. 
49. Orth created a caller script for the boiler-room operations, which he shared by 
email with Morrone and Jurberg.  This script was materially false and misleading.  The script 
described Bio Defense as a “defense manufacturer” that manufactured a “mail decontamination 
system called the mail defender.”  This description was materially misleading and false because, 
from at least August 2008 through approximately July 2010, Bio Defense’s most substantial 
source of cash generation and expense was its securities promotion and sales activities.  The cash 
inflows and outflows of the company were devoted to the selling of its securities, not 
manufacturing its purported product.  This omitted fact would have assumed actual significance 
in the mind of a reasonable investor.  Morrone and Jurberg forwarded this caller script to 
Hamburger for use with the boiler-room operations. 
50. Lu opened a bank account at a U.S. banking institution in the name of Bio 
Defense Corporation for the specific purpose of receiving investor funds and transferring those 
funds to the overseas call centers.  Once the account was opened, Lu provided the bank account 
information for wiring instructions, including the account number as well as the bank’s routing 
number and international identifier code (necessary for international wire transfers), to Morrone, 
Jurberg, and Hamburger.  Over the course of the three year operation, Bio Defense, through Lu 

  
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or a person working at Lu’s direction, opened several different accounts for the overseas boiler-
room projects.    
51. Morrone and Hamburger arranged for the creation of Bio Defense email accounts 
to be used by call center employees. 
52. The boiler-room operations were run out of, among other places, Spain and 
Portugal.  In the first week of August 2008, Hamburger was in Spain preparing for the boiler-
room operations.  On August 4, Morrone sent copies of the Bio Defense draft offering 
documents by facsimile to Hamburger’s hotel room in Spain and sent an additional copy by 
email.  On August 5, Morrone sent Hamburger, by facsimile and email, a copy of the signed 
Business Alliance Agreement and a copy of the revised introduction letter.  On August 5, 
Morrone sent Hamburger, by facsimile and email, another copy of the payment instructions for 
use with potential Bio Defense investors.   During this time, Morrone was also in daily cell 
phone contact with Hamburger. 
B. Operation of the Scheme To Defraud 
53.  Once the boiler-room operations were up and running, the scheme worked 
generally as follows.  The boiler-rooms called potential investors in the United Kingdom to 
solicit offers to purchase Bio Defense stock using high pressure sales tactics.  If a potential 
investor expressed interest in purchasing Bio Defense securities, that investor’s name was passed 
to Bio Defense along with an investor reference number.  Bio Defense then sent the potential 
investor an “investor packet” by email or overnight courier.  The investor packet included (i) a 
cover letter from Jonathan Morrone, (ii) a proposed subscription agreement, and (iii) payment 
instructions. 

  
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54.   The cover letter from Morrone instructed prospective investors to fill in the 
“highlighted areas” of the subscription agreement and “fax it back to Jonathan Morrone” at Bio 
Defense and send the originals to him by mail.  Through letter, Morrone told investors that 
“[u]pon receipt of payment for the shares, [he] would mail to [them] by overnight express [their] 
share certificate.”   
55. Morrone’s letter also contained false and misleading statements to maintain the 
atmosphere of urgency and exclusivity created by the boiler-room operations.  Morrone’s letter 
told investors:  “Please be advised that there are only 10 million shares available for this offering 
and I can only hold your allocation for 10 days from the receipt of paperwork.  Immediate 
attention is required.”  Morrone knew these statements were false and misleading.   Bio 
Defense did not have any specific numeric or time limitations on its purported “offering.”  In 
fact, the company did not have any corporate resolutions creating any specific offering of stock 
for these investors.  Morrone’s statements concerning offering amounts and time limitations 
were pure fiction to keep the pressure on prospective investors. 
56. The subscription agreement included in the investor packet purported to be an 
offer to purchase securities from the prospective investor.  The last page of the subscription 
agreement was the “Subscription Signature Page,” which purported to be the offer to purchase 
Bio Defense stock that had been solicited from prospective investors.  On this page, Bio Defense 
pre-filled the form with the number of shares of common stock subscribed as well as the total 
payment amount, which had been supplied by the boiler-rooms.  To complete the form, the 
prospective investor was required to provide certain personal information, including a name for 
the stock certificate, and then sign the offer.  The first lines of the subscription signature page 
told prospective investors to “fax this back immediately” to Bio Defense’s facsimile line in 

  
 19 
Boston, Massachusetts.  The subscription purported to be completed upon delivery of the 
subscription agreement to Bio Defense along with payment for the shares to Bio Defense’s bank 
account. 
57. Bio Defense incurred irrevocable liability for the sale of its securities when the 
company accepted delivery of the prospective investor’s subscription agreement in 
Massachusetts and confirmed receipt of the investor’s payment in a Bio Defense’s bank account 
within the United States.  In addition, because Bio Defense was issuing stock certificates to these 
investors from its principal place of business in Boston, Massachusetts, title to these securities 
passed from Bio Defense to these investors within the United States.   
58. The subscription agreement contained a materially misleading statement 
concerning “fees and expenses.”  According to the agreement, “[e]ach of the parties hereto shall 
pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or 
others engaged by such party) in connection with this Subscription Agreement and the 
transactions contemplated hereby whether or not the transactions contemplated hereby are 
consummated.”  This statement was misleading because it omitted the material fact that Bio 
Defense had agreed to pay its boiler-room stock promoters a fee of seventy-five percent of every 
dollar raised from investors--a fact that would have assumed actual significance in the 
deliberations of a reasonable investor.  
59. With regard to the attached payment instructions, there were at least two versions 
sent by Bio Defense to prospective investors.  In the first version, investors were requested to 
mail their checks and the original, completed subscription agreement to Bio Defense.  To 
accomplish this delivery, the instructions asked prospective investors to “contact DHL to request 
a pick up” and “ask the customer representative to have the courier bring” an international 

  
 20 
waybill and an express envelope.  The instructions provided the United Kingdom telephone 
number for DHL.  They also provided the prospective investor with an account number to use in 
the waybill so that Bio Defense would be charged the cost of the international delivery.  The 
instructions further provided that the receiver address should read:  “Bio Defense Corporation, 
Attn: Jonathan Morrone, 12 Channel Street, 9
th
 Floor, Boston, Massachusetts  02210, USA.”  
The second version of the payment instructions provided wiring instructions to Bio Defense’s 
bank accounts and instructed potential investors to “complete and sign these instructions and 
give them to your bank.”  These payment instructions required the prospective investor to fill in 
his or her name, account number, and payment amount in United States dollars.  This payment 
instruction form also had pre-filled information, including a reference number linking the 
subscription payment to a particular boiler-room solicitation, as well as Bio Defense’s bank 
account details. 
60. Bio Defense, through the individual defendants and the boiler-room call centers, 
conducted four rounds of soliciting U.K. investors. Bio Defense labeled these four rounds, 
individually: “EU Project,” “PT Project,” “CA Project,” and “GH Project.” 
61. Hamburger managed the boiler-room call center operations for the EU and PT 
projects.  Lu, Morrone, and Jurberg, and persons working at their direction, managed Bio 
Defense’s follow up solicitations and sales of Bio Defense securities, as well as the payment of 
the call centers and Hamburger. 
62. Bio Defense paid Hamburger twelve and a half percent of the net fund raising 
proceeds (after the call centers’ cut) for his services in managing the EU Project and the PT 
Project. 

  
 21 
63. Orth managed the boiler-room operations for the CA and GH projects.  Lu, 
Morrone, and Jurberg, and persons working at their direction, managed Bio Defense’s follow up 
solicitations and sales of Bio Defense securities, as well as the payment of the boiler-room call 
centers and Orth. 
64. Bio Defense paid Orth fifteen percent of net investor fundraising proceeds (after 
the call centers’ cut) for his services in managing the CA Project and the PT Project.  
  i. The EU and PT Projects 
65. From approximately August through December 2008, Hamburger, Lu, Morrone, 
and Jurberg ran the EU Project in concert with the solicitations made by the Agile call centers. 
66. Each week during this time period, Agile provided Bio Defense with the names of 
the solicited U.K. investors, the amounts verbally committed by these investors, and the 
investors’ addresses.  Morrone, Jurberg, or Bio Defense staff working at their direction sent out 
the investor packages by an international mail delivery service.  As investors faxed in their 
subscription signature pages, they were received by Morrone or Jurberg, or Bio Defense staff 
working at their direction.  Morrone and Jurberg then ensured that Lu signed a Bio Defense stock 
certificate in the name of the new Bio Defense investor.  Bio Defense then confirmed receipt of 
the investor money and sent a copy of the stock certificate to the investor by international mail 
service.  Bio Defense would then pay the seventy-five percent fee to Agile and the twelve-and-a-
half percent fee to Hamburger in his name or the name of his consulting company. 
67. As money came pouring into Bio Defense’s bank accounts, Lu sent copies of the 
bank statements to Hamburger, Morrone and Jurberg by email, so that they could see the large 
amount of money being generated by the boiler-room call center solicitation efforts.  In addition, 

  
 22 
Lu copied Hamburger, Morrone and Jurberg on Agile invoices and Bio Defense’s wire payment 
of those invoices. 
68. In addition, for the duration of the project, Bio Defense’s accounting department 
sent out a weekly project report to Hamburger, Morrone and Jurberg.  The report showed the 
names of investors, the amount paid by the investor, and the investor’s reference number.  The 
report also tallied the amount raised each week and the grand total for the completed weeks 
along with a calculation of the seventy-five-percent fee owed to Agile. 
69. During the course of the EU Project, Lu, Morrone, Jurberg, and Orth received 
emails clearly indicating that Bio Defense’s potential investors were being subject to high-
pressure sales tactics. 
70. On September 26, 2008, Morrone received an email from solicited investor S.D.  
In the email, S.D. reported:  “Jonathan--Just to confirm that I will not be pursuing the Offer of 
Biodefense shares.  I have tried to explain to Matthew Bellamy of World Capital (?), but his 
ability to talk greatly exceeds his ability to listen.” 
71. On October 4, 2008, Morrone received an email from solicited investor A.T.  In 
the email, A.T. reported:  “Dear Mr. Morrone,  Your contacts about the Biodefense Corporation 
have arrived.  I am a bit puzzled to explain how we got to this stage as I understood that I clearly 
stated when first approached that I am not currently in a position to take up the offer!  That 
remains the case and I am not able to take up the option, attractive though it seems to be.” 
72. On November 29, 2008, Morrone received an email from solicited investor C.H.  
In the email, C.H. reported:  “Hello, I have been approached by a company, Securities 
Associates, wanting me to invest in your company.  I am not convinced this is genuine, can you 
advise me please?”  

  
 23 
73. Morrone forwarded these complaints to Hamburger, the person previously 
convicted of securities fraud who was being paid to manage the boiler-room call center 
operations for Bio Defense.   
74. Morrone also was aware, from the beginning of the EU Project fund raising 
activities, of the flood of investor money generated by the solicitation leads of the international 
call centers and their excessive fees.  He personally reviewed Agile’s first-week invoice and the 
Bio Defense accounting department report for that week.  These documents detailed the dollar 
amount raised by the call centers as well as the dollar amount of the seventy-five-percent fee.  In 
these documents, Morrone saw that, in the first week of operations, Agile billed Bio Defense a 
fee of $266,201 on investor payments of $354,935.   
75. In October 2008, Hamburger and Morrone received a breakdown of the efficiency 
of the call center operations.  The document showed, among other things, (i) the percentage of 
trades written by each group; (ii) the number of trades written versus trades that actually resulted 
in signed subscription offers from investors; (iii) the total dollar amount written by call center 
solicitations versus the amount actually paid by investors.  The document identified the call 
centers by either aliases, such as “Maserati,” “Ferrari,” and “C.Faxes,” or simply by the range of 
investor reference number assigned to the call center. 
76. Morrone was also provided copies of communications sent by Hamburger to the 
international call centers.  For example, in November 2008, Hamburger sent Morrone a copy of a 
directive he provided to the call centers.  In this communication, Hamburger told the call centers 
that Bio Defense would “no longer accept trades of less than $25,000” because the company was 
spending “$8,000 per week” on mailing investor packages to the large number of potential 

  
 24 
investors solicited by call centers, but not enough of the initial solicitations were leading to 
actual investments of desired size. 
77. As the result of the coordinated actions of Lu, Morrone, Jurberg and Hamburger, 
by the conclusion of the five-month EU project, Bio Defense raised approximately $3.4 million 
from the sale of Bio Defense securities to U.K. investors, of which Bio Defense paid 
approximately $2.5 million to Agile.   
78. Beginning in approximately October 2008, Hamburger, Lu, Morrone, and Jurberg 
ran the PT Project in concert with the solicitations made by international boiler-room call 
centers. 
79. During this project, Bio Defense paid the same seventy-five percent fee to boiler-
room operators, but the call centers submitted invoices with new names, such as “Mute and 
Reboot,” “RULUSO, Ltd.,” “Red Enterprises, Inc.,” and “Conyers Consulting.”  These invoices 
requested payment to banking institutions located in foreign countries outside the jurisdiction of 
the United States and the United Kingdom, such as Tanzania and Portugal.   
80. Despite the change in invoicing name, however, the operations of the project were 
exactly the same as the EU Project.  Hamburger continued to manage the boiler-room call center 
operations on behalf of Bio Defense.  The boiler-rooms called potential investors in the United 
Kingdom to solicit offers to purchase Bio Defense stock using high pressure sales tactics.  If a 
potential investor expressed interest in purchasing Bio Defense securities, that investor’s name 
was passed to Bio Defense.  Bio Defense then sent the potential investor an “investor packet” by 
email or overnight courier.  The investor packet included (i) the cover letter from Jonathan 
Morrone, (ii) the proposed subscription agreement, and (iii) payment instructions. 

  
 25 
81. Each week during this time, the boiler-rooms provided Bio Defense with the 
names of the solicited U.K. investors, the amounts verbally committed by these investors, and 
the investors’ addresses.  Bio Defense, under the leadership of Lu, Morrone and Jurberg, sent out 
the investor packages by international mail delivery.  As investors faxed in their subscription 
signature pages, they were received by Morrone or Jurberg, or staff working at their direction, 
who then ensured that Lu signed a Bio Defense stock certificate to be sent to the new Bio 
Defense investor.  Bio Defense then confirmed receipt of the investor money and sent a copy of 
the stock certificate to the investor.  Bio Defense then paid the seventy-five percent fee to Agile 
and the twelve and a half percent fee to Hamburger in his name or the name of his consulting 
company. 
82. The PT Project ran until approximately April 2010.  By the conclusion of the 
eighteen-month project, Bio Defense raised approximately $3.3 million from the sale of Bio 
Defense securities to U.K. investors, of which Bio Defense paid approximately $2.1 million to 
Agile.   
83. For managing the boiler-room call center operations of both the EU and the PT 
projects, Bio Defense ultimately paid Hamburger, in his name or the name of his consulting 
company, $357,361 of the net investor proceeds retained by the company after payment of the 
boiler-room call centers. 
 ii. The CA and GH Projects 
84. Beginning in approximately March 2009, Orth, Lu, Morrone, and Jurberg ran the 
CA Project in concert with the solicitations made by the boiler-room call centers.   
85. As in the PT Project, the boiler-room entities submitted invoices with new names, 
such as “M Management,” “RainMax,” “Hillside,” “WWD, Int’l,” and “Omaham Development.”  

  
 26 
These invoices requested payment to banking institutions located in foreign countries outside the 
jurisdiction of the United States and the United Kingdom, such as Belize, Cyprus, Panama, and 
the Seychelles Islands.   
86. Despite the change in invoicing name, however, the operations of the project were 
exactly the same as the EU Project, with the exception that Orth played Hamburger’s role in 
managing the boiler-room call center operations on behalf of Bio Defense.  The boiler-rooms 
called potential investors in the United Kingdom to solicit offers to purchase Bio Defense stock 
using high pressure sales tactics.  If a potential investor expressed interest in purchasing Bio 
Defense securities, that investor’s name was passed to Bio Defense.  Bio Defense then sent the 
potential investor the investor packet by email or overnight courier.  The investor packet 
included (i) the cover letter from Jonathan Morrone, (ii) the proposed subscription agreement, 
and (iii) payment instructions. 
87.  Each week during this time, the boiler-rooms provided Bio Defense with the 
names of the solicited U.K. investors, the amounts verbally committed by these investors, and 
the investors’ addresses.  Bio Defense, under the leadership of Lu, Morrone and Jurberg, sent out 
the investor packages by overnight delivery.  As investors faxed in their subscription signature 
pages, they were received by Morrone or Jurberg, or staff working at their direction, who then 
ensured that Lu signed a Bio Defense stock certificate to be sent to the new Bio Defense 
investor.  Bio Defense then confirmed receipt of the investor money and sent a copy of the stock 
certificate to the investor.  Bio Defense then paid a seventy percent fee to the boiler-rooms and, 
of the remaining thirty percent of investor proceeds, a fifteen percent fee to Orth in his name or 
the name of his consulting company. 

  
 27 
88. Orth and Lu prepared periodic summary reports showing, among other things, the 
70% commissions due to specific boiler rooms based on the funds raised from individual 
investors, and Orth distributed these reports to Lu, Morrone, Jurberg and other Bio Defense staff. 
89. The CA Project ran until approximately March 2010.  By the conclusion of the 
twelve-month project, Bio Defense had raised approximately $5.1 million from the sale of Bio 
Defense securities to U.K. investors, of which Bio Defense paid approximately $2.6 million to 
the boiler-rooms.   
90. Beginning in approximately April 2010, Orth, Lu, Morrone, and Jurberg ran the 
GH Project in concert with the solicitations made by the international boiler-room call centers.   
91. In this project, the boiler-room entities submitted invoices names similar to those 
used in the PT Project, such as “Conyers Consulting” and “Red Enterprise.”   
92. The operations of the project were exactly the same as they had been for the CA 
Project.  Orth managed the boiler-room call center operations on behalf of Bio Defense.  The 
boiler-rooms called potential investors in the United Kingdom to solicit offers to purchase Bio 
Defense stock using high pressure sales tactics.  If a potential investor expressed interest in 
purchasing Bio Defense securities, that investor’s name was passed to Bio Defense.  Bio Defense 
then sent the potential investor the investor packet by email or overnight courier.  The investor 
packet included (i) the cover letter from Jonathan Morrone, (ii) the proposed subscription 
agreement, and (iii) payment instructions. 
93. Each week during this time, the boiler-room call centers provided Bio Defense 
with the names of the solicited U.K. investors, the amounts verbally committed by these 
investors, and the investors’ addresses.  Bio Defense, under the leadership of Lu, Morrone and 
Jurberg, sent out the investor packages by international mail delivery.  As investors faxed in their 

  
 28 
subscription signature pages, they were received by Morrone or Jurberg, or staff working at their 
direction who then ensured that Lu signed a Bio Defense stock certificate to be sent to the new 
Bio Defense investor.  Bio Defense then confirmed receipt of the investor money and sent a copy 
of the stock certificate to the investor.  Bio Defense would then pay a seventy-five percent fee to 
the boiler-rooms and, of the remaining twenty five percent of investor proceeds, a fifteen percent 
fee to Orth in his name or the name of his consulting company. 
94. The GH Project ran until approximately July 2010.  By the conclusion of the four-
month project, Bio Defense had raised approximately $118,000 from the sale of Bio Defense 
securities to U.K. investors, of which Bio Defense paid approximately $108,740 to the boiler-
rooms. 
95. For managing the boiler-room operations of both the CA and the GH projects, Bio 
Defense ultimately paid Orth, in his name or the name of his consulting company $407,041 of 
the net investor proceeds retained by the company after payment of the boiler-room call centers. 
96. Ultimately, Bio Defense’s sale of its securities through the four projects raised a 
total approximate amount of $11.9 million, of which Bio Defense paid approximately $8 million, 
or sixty-seven percent of every dollar raised, to the boiler-room operators, Hamburger, and Orth. 
V. The Buy-Back Program. 
97.  In addition to selling shares of stock, beginning as early as 2008, Bio Defense has 
raised additional funds in the U.S. and internationally through a “Buy-Back Program,” through 
which investors were offered the opportunity to invest $50,000 purportedly to “purchase,” but 
not take possession of, a MailDefender machine, either completed or in production, in exchange 
for which the investor would be repaid its principal plus a $10,000 premium when the machine 
was sold and delivered to a Bio Defense customer.  In other words, investors in the Buy-Back 

  
 29 
program made an investment of money in the Bio Defense enterprise with an expectation that 
they would profit from the efforts of Bio Defense in manufacturing and selling the machine. Bio 
Defense represented the program to potential investors as a way for both the investor and Bio 
Defense to make profits from Bio Defense’s sale of the MailDefender machines.  There is no 
evidence, however, that any of the purported machines “sold” to investors were ever sold to any 
Bio Defense customer. 
98. During the course of the Buy-Back Program, false statements of material fact 
were made to entice investor participation.  For example, in approximately July 2010, Orth 
solicited Investor D by telephone to invest in the Bio Defense Buy Back Program. During the 
course of the solicitation, Orth told Investor D that the machine offered for investment had 
already been sold to Morgan Stanley.  Orth told Investor D that the investment would be secured 
by the actual machine, which sells for $300,000.  Orth told Investor D that Bio Defense had 
already sold 175 machines and had orders for thousands more.  Finally, Orth stated that he was 
not receiving a commission on his Buy Back Program sales.  All of these statements were false.  
Morgan Stanley has never purchased a MailDefender machine.  Bio Defense has never sold a 
MailDefender machine for $300,000.  In its ten year history, Bio Defense has sold fewer than ten 
machines.  After receiving Orth’s false representations, Investor D invested $50,000 to purchase 
one MailDefender machine.  Investor D has never been paid a return on his investment.          
First Claim for Relief 
(Violation of Section 17(a)(1), (2), and (3) of Securities Act By Bio Defense, Lu, Morrone, 
Jurberg, and Orth) 
 
99. The Commission repeats and incorporates by reference the allegations in 
paragraphs 1 through 98 above as if set forth fully herein. 
100. Bio Defense, Lu, Morrone, Jurberg and Orth, directly or indirectly, acting 

  
 30 
intentionally, knowingly or recklessly, by use of the means or instruments of transportation or 
communication in interstate commerce or by the use of the mails, in the offer or sale of 
securities:  (a) have employed or are employing devices, schemes, or artifices to defraud; (b) 
have obtained or are obtaining money or property by means of untrue statements of material fact 
or omissions to state a material fact necessary to make the statements not misleading; or (c) have 
engaged or are engaging in transactions, practices, or courses of business which operated as a 
fraud or deceit upon the purchasers of such securities. 
101. By engaging in the conduct described above, Bio Defense, Lu, Morrone, Jurberg 
and Orth have violated, and unless enjoined will continue to violate, Section 17(a)(1), (2), and 
(3) of the Securities Act [15 U.S.C. §77q(a)].  
Second Claim for Relief 
(Violation of Section 17(a)(1) and (3) of Securities Act By Hamburger 
 
102. The Commission repeats and incorporates by reference the allegations in 
paragraphs 1 through 98 above as if set forth fully herein. 
103. Hamburger, directly or indirectly, acting intentionally, knowingly or recklessly, 
by use of the means or instruments of transportation or communication in interstate commerce or 
by the use of the mails, in the offer or sale of securities:  (a) has employed or is employing 
devices, schemes, or artifices to defraud; and (b) has engaged or is engaging in transactions, 
practices, or courses of business which operated as a fraud or deceit upon the purchasers of such 
securities. 
104. By engaging in the conduct described above, Hamburger violated, and unless 
enjoined will continue to violate, Section 17(a)(1) and (3) of the Securities Act [15 U.S.C. 
§77q(a)].  

  
 31 
Third Claim for Relief  
(Violation of Section 10(b) of Exchange Act and Rule 10b-5(a), (b) and (c) By Bio Defense, 
Lu, Morrone, Jurberg, and Orth) 
 
105. The Commission repeats and incorporates by reference the allegations in 
paragraphs 1 through 98 above as if set forth fully herein. 
106. Bio Defense, Lu, Morrone, Jurberg and Orth, directly or indirectly, acting 
intentionally, knowingly or recklessly, in connection with the purchase or sale of securities, by 
use of the means or instrumentalities of interstate commerce or the facilities of a national 
securities exchange or the mail:  (a) have employed or are employing devices, schemes, or 
artifices to defraud; (b) have made or are making untrue statements of material fact or have 
omitted or are omitting to state material fact(s) necessary to make the statements made not 
misleading; or (c) have engaged or are engaging in acts, practices, or courses of business which 
operate as a fraud or deceit upon certain persons. 
107. By engaging in the conduct described above, Bio Defense, Lu, Morrone, Jurberg 
and Orth have violated, and unless enjoined will continue to violate, Section 10(b) of the 
Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5(a), (b), and (c) thereunder [17 C.F.R. 
§240.10b-5]. 
Fourth Claim for Relief  
(Violation of Section 10(b) of Exchange Act and Rule 10b-5(a) and (c) By Hamburger) 
 
108. The Commission repeats and incorporates by reference the allegations in 
paragraphs 1 through 98 above as if set forth fully herein. 
109. Hamburger, directly or indirectly, acting intentionally, knowingly or recklessly, in 
connection with the purchase or sale of securities, by use of the means or instrumentalities of 
interstate commerce or the facilities of a national securities exchange or the mail:  (a) has 
employed or is employing devices, schemes, or artifices to defraud; and (b) has engaged or is 

  
 32 
engaging in acts, practices, or courses of business which operate as a fraud or deceit upon certain 
persons. 
110. By engaging in the conduct described above, Hamburger has violated, and unless 
enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and 
Rule 10b-5(a) and (c) thereunder [17 C.F.R. §240.10b-5]. 
 
Fifth Claim for Relief 
(Violation of Section 5(a) and 5(c) of the Securities Act By Bio Defense, Lu, Morrone, 
Jurberg, and Orth) 
111. The Commission repeats and incorporates by reference the allegations in 
paragraphs 1 through 98 above as if set forth fully herein. 
112. Bio Defense, Lu, Morrone, Jurberg and Orth directly or indirectly: (a) made use 
of the means or instruments of transportation or communication in interstate commerce or of the 
mails to sell securities through the use or medium of a prospectus or otherwise; or carried 
securities or caused such securities to be carried through the mails or in interstate commerce, by 
means or instruments of transportation, for the purpose of sale or delivery after sale; and (b) 
made use of the means or instruments of transportation or communication in interstate commerce 
or of the mails to offer to sell or to offer to buy, through the use or medium of any prospectus or 
otherwise, securities without a registration statement having been filed with the Commission or 
being in effect as to such securities. 
113. Neither Bio Defense nor its securities offerings has ever been registered with the 
Commission.  Through the conduct described above, Bio Defense, Lu, Morrone, Jurberg and 
Orth sold securities to hundreds of investors and obtained proceeds of at least $26.2 million. 
114. By reason of the foregoing, Bio Defense, Lu, Morrone, Jurberg and Orth, singly 
or in concert, directly or indirectly, violated, and unless enjoined will again violate, Sections 5(a) 

  
 33 
and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) and 77e(c). 
Sixth Claim for Relief 
(Violation of Section 15(a)(1) of the Exchange Act By Lu, Morrone, Jurberg, Hamburger, 
and Orth) 
 
115. The Commission repeats and incorporates by reference the allegations in 
paragraphs 1 through 98 above as if set forth fully herein. 
116. In connection with the offer and sale of the securities of Bio Defense from 2004 
through July 2010, Lu, Morrone, Jurberg, Hamburger, and Orth made use of the mails or the 
means or instrumentalities of interstate commerce to effect transactions in, or to induce or 
attempt to induce the purchase or sale of Bio Defense securities. 
117. While engaged in this conduct, Lu, Jurberg, Hamburger or Orth were neither 
registered with the Commission as a broker or dealer nor associated with a registered broker or 
dealer. 
118. While Morrone engaged in this conduct from 2004 through 2007, his promotional 
activities on behalf of Bio Defense were not under the supervision or approval of the brokers 
with which he was associated.  While engaged in this conduct after his disassociation in 2007 
and continuing through July 2010, Morrone was neither registered with the Commission as a 
broker or dealer nor associated with a registered broker or dealer.  
119. By engaging in the conduct described above, Lu, Morrone, Jurberg, Hamburger 
and Orth have violated, and unless enjoined will continue to violate, Section 15(a)(1) of the 
Exchange Act [15 U.S.C. §78o(a)(1)]. 

  
 34 
Seventh Claim for Relief 
(Control Person Liability Under Section 20(a) of the Exchange Act Against Lu and 
Morrone for Bio Defense’s Violations of Section 17(a) of the Securities Act and Section 
10(b) of the Exchange Act and Rule 10b-5 Thereunder) 
120. The Commission repeats and incorporates by reference the allegations in 
paragraphs 1 through 98. 
121. Bio Defense, directly or indirectly, acting intentionally, knowingly or recklessly, 
by use of the means or instruments of transportation or communication in interstate commerce or 
by the use of the mails, in the offer or sale of securities:  (a) has employed or is employing 
devices, schemes, or artifices to defraud; (b) has obtained or is obtaining money or property by 
means of untrue statements of material fact or omissions to state a material fact necessary to 
make the statements not misleading; or (c) has engaged or is engaging in transactions, practices, 
or courses of business which operated as a fraud or deceit upon the purchasers of such securities. 
122. Bio Defense, directly or indirectly, acting intentionally, knowingly or recklessly, 
by use of the means or instrumentalities of interstate commerce, or of the mails, or of a facility of 
a national securities exchange, in connection with the purchase or sale of a security: (a) 
employed devices, schemes or artifices to defraud; (b) made untrue statements of material fact 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; or (c) engaged in acts, practices, or 
courses of business which operated or would operate as a fraud or deceit upon another person. 
123. Lu, as CEO and Chairman of the Board of Directors of Bio Defense, and 
Morrone, as senior executive vice president and a director of Bio Defense, exercised control 
over the management, general operations, and policies of Bio Defense, as well as the specific 
activities upon which Bio Defense’s violations are based. 

  
 35 
124. By reason of the foregoing, Lu and Morrone are liable as control persons under 
Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for Bio Defense’s violations of 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 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 
Eighth Claim for Relief 
(Other Equitable Relief, Including Unjust Enrichment and Constructive Trust,  
Against Relief Defendant May’s International) 
 
125. The Commission repeats and incorporates by reference the allegations in 
paragraphs 1 through 98 above as if set forth fully herein. 
126. Section 21(d)(5) of the Exchange Act states: “In any action or proceeding brought 
or instituted by the Commission under any provision of the securities laws, the Commission may 
seek, and any Federal court may grant, any equitable relief that may be appropriate or necessary 
for the benefit of investors.” 
127. Relief defendant May’s International has received and possesses ill-gotten 
investor funds derived from the unlawful acts or practices of the Defendants dictating that, in 
equity and good conscience, it should not be allowed to retain such funds. 
128. May’s International has no legitimate claim to this property. 
129. As a result, May’s International is liable for unjust enrichment and should be 
required to return its ill-gotten gains, in an amount to be determined by the Court.  The Court 
should also impose a constructive trust on the ill-gotten investor funds in the possession of 
May’s International. 
  

  
 36 
PRAYER FOR RELIEF 
 WHEREFORE, the Commission requests that this Court: 
A. Enter a permanent injunction restraining Defendants and each of their agents, 
servants, employees and attorneys and those persons in active concert or participation with them 
who receive actual notice of the injunction by personal service or otherwise, including facsimile 
transmission or overnight delivery service, from directly or indirectly engaging in the conduct 
described above, or in conduct of similar purport and effect, in violation of Sections 5(a), 5(c), 
and 17(a) of the Securities Act [15 U.S.C. §§ 77e(a), 77e(c) and 77q(a)]; Section 10(b) of the 
Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 
B. Require Defendants to disgorge their ill-gotten gains and losses avoided, plus pre-
judgment interest, with said monies to be distributed in accordance with a plan of distribution to 
be ordered by the Court; 
C. Require the Relief Defendant to disgorge all unjust enrichment and/or ill-gotten 
gain received from Defendants, plus prejudgment interest, with said moneys to be distributed in 
accordance with a plan of distribution to be ordered by the Court; 
D. Require Defendants to pay appropriate civil monetary penalties pursuant to 
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)]; and Section 21(d)(3) of the Securities 
Exchange Act [15 U.S.C. § 78u(d)(3)];  
E. Order that Defendants Lu, Morrone, Jurberg, and Orth be prohibited from acting 
as officers or directors of any public company pursuant to Section 20(e) of the Securities Act [15 
U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; 
F. Retain jurisdiction over this action to implement and carry out the terms of all 
orders and decrees that may be entered; and 

  
 37 
G. Grant such other and further relief as the Court deems just and proper. 
 
JURY DEMAND 
The Commission hereby demands a trial by jury on all claims so triable.   
  
 
Respectfully submitted, 
 
SECURITIES AND EXCHANGE COMMISSION 
 
By its attorneys, 
 
 
 
      /s/ R.M. Harper II      
Richard M. Harper II (Mass. Bar No. 634782) 
      Michele T. Perillo (Mass. Bar No. 629343) 
      Ellen Moynihan (Mass. Bar No. 567598) 
      33 Arch Street, 23rd Floor 
Boston, Massachusetts  02110 
Telephone:  (617) 573-8979 (Harper direct) 
Facsimile:   (617) 573-4590 
E-  mail:  [email protected]    
Dated:  September 10, 2012 

UNITED STATES DISTRICT COURT 
DISTRICT OF MASSACHUSETTS 

 
__________________________________________ 
       ) 
SECURITIES AND EXCHANGE   ) 
COMMISSION,     ) 
       ) 
   Plaintiff,   ) Civil Action No. 
       )       

v.      ) 
       ) 
BIO DEFENSE CORPORATION,   ) JURY TRIAL DEMANDED 
MICHAEL LU, Individually and Doing   ) 
Business as MAY’S INTERNATIONAL   ) 
CORPORATION, JONATHAN MORRONE,  ) 
Individually and Doing Business As    ) 
JM INTERNATIONAL, INC., Z. PAUL   )   
JURBERG, Individually and Doing Business As  )  
BROOKLINE CAPITAL PARTNERS, INC., ) 
BRETT HAMBURGER, Individually   ) 
and Doing Business As JCBH    ) 
CONSULTING, LLC, ANTHONY ORTH,   ) 
Individually and Doing Business As    ) 
GRAND TRAVERSE EQUITIES, INC.,  ) 
       ) 
   Defendants,   ) 
       ) 

and      ) 
       ) 
MAY’S INTERNATIONAL CORPORATION, ) 
       ) 
   Relief Defendant.  ) 
       ) 
       ) 
 

COMPLAINT 

Plaintiff Securities and Exchange Commission (the “Commission”) alleges the following 

against defendants Bio Defense Corporation (“Bio Defense”), Michael Lu, individually and 

doing business as May’s International Corporation (“Lu”), Jonathan Morrone, individually and 

doing business as JM International, Inc. (“Morrone”), Z. Paul Jurberg, individually and doing 



  

 2 

business as Brookline Capital Partners, Inc. (“Jurberg”), Brett Hamburger, individually and 

doing business as JCBH Consulting, LLC (“Hamburger”), Anthony Orth, individually and doing 

business as Grand Traverse Equities, Inc. (“Orth”), and relief defendant May’s International 

Corporation (“May’s International”): 

SUMMARY 

1. This case is about a small company that became a deceptive vehicle for promoting 

a scheme to defraud.  The company, Bio Defense, originated as a start-up proposing to develop 

and manufacture a machine that irradiated mail in order to destroy pathogens, such as anthrax.  

From inception, the company has funded itself through the unlawful unregistered offering and 

sale of its securities.  In making offers and sales of these unregistered securities from 2004 

through August 2008, Bio Defense’s principal officers, Defendants Michael Lu, Jonathan 

Morrone, and Paul Jurberg, have made false claims that Bio Defense employees and officers 

were not being paid cash for their efforts on behalf of the company, deferring their compensation 

until the company became profitable or underwent an initial public offering of stock.  In reality, 

during these years, Bio Defense’s largest expense was the money that it paid to its executives, 

much of which was paid to Lu, Morrone and Jurberg. 

2. By the spring of 2008, Bio Defense, Lu, Morrone and Jurberg attracted the 

attention of state securities regulators.  After the entry of a cease and desist order in Texas and 

receiving a subpoena from the Massachusetts Securities Division, Bio Defense, Lu, Morrone and 

Jurberg decided to focus the company’s securities sales activities overseas. 

3. In pursuit of this overseas sales activity, beginning in August 2008, the defendants 

began an operation that transformed the company into a deceptive scheme to defraud investors.  

Bio Defense, through Lu, Morrone and Jurberg, engaged the services of Brett Hamburger, an 



  

 3 

individual previously convicted of conspiracy to commit securities fraud, and Anthony Orth, a 

self-described “marketer.”  Hamburger and Orth, in turn, connected Bio Defense with a series of 

international boiler-room operations that would offer and sell Bio Defense’s securities overseas 

in exchange for payment of seventy five percent of all money raised from investors.  Bio 

Defense began this fraudulent scheme by entering a deceptive “business alliance agreement” 

with Agile Consulting, a purported Cyprus-based firm.  The terms of the deceptive agreement 

used vague and indefinite language, leaving silent the material facts that (1) Agile would provide 

boiler-room call centers to solicit offers to purchase Bio Defense securities; and (2) these boiler-

rooms would charge Bio Defense an exorbitant fee in the amount of seventy-five percent of all 

money raised.  In addition to this deceptive “business alliance agreement,” Bio Defense agreed to 

pay Hamburger and Orth an additional fee for arranging and managing the relationship between 

Bio Defense and various boiler-room call center operations.  These agreements provided that 

Hamburger would be paid twelve and a half percent and Orth would be paid fifteen percent of 

the net investor proceeds received by Bio Defense after the boiler-room operators’ cut. 

4. In furtherance of this scheme to defraud, Bio Defense, through its principal 

officers, solicited offers from, and sold Bio Defense securities to, persons contacted by the 

boiler-room call centers and, in doing so, knowingly made false and misleading statements about 

Bio Defense’s securities offering and the expenses associated with the offering. 

5. Through this scheme to defraud, Defendants transformed Bio Defense from a 

legal business enterprise into a deceptive and fraudulent device.  By partnering with Agile and 

the other boiler-room call centers and paying their exorbitant transaction-based fees, Bio Defense 

became a deceptive Trojan-horse whose primary purpose served to defraud investors and enrich 

the company’s fraudulent promoters.  From August 2008 through July 2010, the defendants, 



  

 4 

working in concert amongst each other and with the boiler-room operators, raised a total of $11.9 

million from investors.  Bio Defense ultimately paid over $8 million of that money to the boiler-

room operators, Hamburger and Orth.            

6. By engaging in the conduct alleged herein, Bio Defense, Lu, Morrone, Jurberg 

and Orth violated Sections 5(a), 5(c) and 17(a)(1), (2), and (3)  of the Securities Act of 1933 

(“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) 

and Rule 10b-5(a), (b) and (c) thereunder; Lu, Morrone, Jurberg, and Orth violated Sections 

15(a)(1) of the Exchange Act; in the alternative, Lu and Morrone are liable as control persons 

under Section 20(a) of the Exchange Act for Bio Defense’s violations of Section 17(a) of the 

Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and 

Hamburger violated Section 17(a)(1) and (3) of the Securities Act, and Sections 15(a)(1) and 

10(b) of the Exchange Act and Rule 10b-5(a) and (c) thereunder. 

7. Based on these violations, the Commission seeks:  (1) entry of a permanent 

injunction prohibiting Defendants from further violations of the relevant provisions of the federal 

securities laws; (2) disgorgement of Defendants’ ill-gotten gains, plus pre-judgment interest; (3) 

disgorgement by relief defendant May’s International of all unjust enrichment and/or ill-gotten 

gain received, plus prejudgment interest; (4) the imposition of a civil monetary penalty due to the 

egregious nature of Defendants’ violations, and (5) the imposition of officer and director bars 

against Lu, Morrone, Jurberg, and Orth. 

JURISDICTION AND VENUE 
 

8. The Commission brings this action pursuant to the enforcement authority 

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

the Exchange Act [15 U.S.C. §§78u(d)].  This Court has jurisdiction over this action pursuant to 



  

 5 

28 U.S.C. §1331, Section 22(a) of the Securities Act [15 U.S.C. §77v(a)] and Sections 21(d) and 

(e) and 27 of the Exchange Act [15 U.S.C. §§78u(e) and 78aa].   

9. Venue is proper in this district pursuant to 28 U.S.C. §1391(b)(2), 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] 

because a substantial part of the acts constituting the alleged violations occurred in the District of 

Massachusetts, because all of the Defendants transacted business in Massachusetts, because Lu, 

Morrone, and Jurberg live in Massachusetts, and because the principal place of business of Bio 

Defense is in Massachusetts.  

10. In connection with the conduct alleged in this Complaint, Defendants directly or 

indirectly made use of the means or instruments of transportation or communication in interstate 

commerce, the facilities of a national securities exchange, or the mails.  

11. Defendants’ conduct involved fraud, deceit, or deliberate or reckless disregard of 

regulatory requirements, and resulted in substantial loss, or significant risk of substantial loss, to 

other persons. 

12. Unless enjoined, Defendants will continue to engage in the securities law 

violations alleged herein, or in similar conduct that would violate the federal securities laws. 

DEFENDANTS 

13. Bio Defense Corporation is a Delaware corporation with a principal place of 

business located at 12 Channel Street, Boston, Massachusetts.  Neither Bio Defense nor its 

securities offerings have ever been registered with the Commission. 

14. Michael Lu, age 57, is a resident of Lexington, Massachusetts.  Lu was the 

founder of Bio Defense and, from its inception until mid-July 2011, served as the company’s 

CEO and as the Chairman of its board of directors.  Lu is also the President and Treasurer of 



  

 6 

May’s International Corporation (“May’s International”), through which Bio Defense paid Lu 

compensation.  Lu has never been associated with a registered broker or dealer.  In 2008, the 

Texas State Securities Board ordered Lu to cease and desist from offering to sell Bio Defense’s 

unregistered securities in violation of Sections 7 and 12 of the Texas Securities Act.  During the 

period of misconduct alleged in this Complaint, Lu was heavily involved in Bio Defense’s day-

to-day operations and had ultimate authority over its officers’ and agents’ actions and statements. 

15. Jonathan Morrone, age 45, is a resident of Newton, Massachusetts.  From 2002 

through 2011, Morrone served as the only Senior Executive Vice President at Bio Defense and as 

a member of the company’s board of directors.  Morrone is also the principal of JM 

International, Inc., a now-defunct Delaware corporation, through which Bio Defense paid 

Morrone compensation.  Morrone was affiliated as a registered representative with various 

brokerage firms from 1994 to August 2007.  Although Morrone was a registered representative 

associated with a broker-dealer until August 2007, his activities in offering and selling Bio 

Defense securities during the time of his association, as alleged in this Complaint, were outside 

the scope of his association with the registered broker-dealer and not under the supervision or 

approval of the broker-dealer with which he was associated.  In 2008, the Texas State Securities 

Board ordered Morrone to cease and desist from offering to sell Bio Defense’s unregistered 

securities in violation of Sections 7 and 12 of the Texas Securities Act. 

16. Z. Paul Jurberg, age 65, is a resident of Brookline, Massachusetts.  From at least 

2003 through the present, Jurberg has served as a senior officer of Bio Defense, most recently as 

a Senior Vice President, Sales and Marketing.  From February 2000 through March 2006, 

Jurberg was President of Brookline Capital Partners, Inc., a now-defunct Massachusetts 

corporation, through which Bio Defense paid Jurberg compensation. Jurberg was a registered 



  

 7 

representative with various brokerage firms from 1985 to 1997.  Jurberg has not been associated 

with a registered broker or dealer since at least 1998.  In 2008, the Texas State Securities Board 

ordered Jurberg to cease and desist from offering to sell Bio Defense’s unregistered securities in 

violation of Sections 7 and 12 of the Texas Securities Act.   

17. Anthony Orth, age 42, is a resident of Tustin, California.  From 2007 through 

2011, Orth served Bio Defense as its Vice President, Marketing.  In 2003, Orth incorporated 

Grand Traverse Equities, Inc. (“Grand Traverse”) as a Michigan corporation and served as its 

President until July 2007, when it was dissolved by law for failure to file annual reports.  Bio 

Defense paid Orth compensation through Grand Traverse.  Orth has not been associated with a 

registered broker or dealer since 1995. 

18. Brett Hamburger, age 41, is a resident of Delray Beach, Florida.  In July 2009, 

Hamburger formed JCBH Consulting, LLC, which has also been known as JCB Consulting and 

JBC Consulting, (hereinafter, “JCBH Consulting”), a Florida limited liability company, and 

served as its manager until the company was administratively dissolved in September 2010 for 

failure to file annual reports.  Bio Defense paid Hamburger compensation through JCBH 

Consulting.  From 1989 to 1997, Hamburger was affiliated as a registered representative with 

various brokerage firms, but was barred by the National Association of Securities Dealers in 

October 2000 as a result of, among other things, acting as an unregistered broker.  Hamburger 

has not been associated with a registered broker or dealer since at least 1997.  In March 2003, the 

United States District Court for the Eastern District of New York adjudged Hamburger guilty of 

conspiracy to commit securities fraud.  The Court sentenced Hamburger to serve 10 months of 

home detention and placed him on 5 years of probation. 



  

 8 

RELIEF DEFENDANT 

19. May’s International Corporation is a Delaware corporation.  Lu is the President 

and Treasurer of May’s International.  From at least January 2004 through 2010, Lu received Bio 

Defense compensation through May’s International. 

FACTUAL ALLEGATIONS 

20. Incorporated in 2001, Bio Defense purports to be in the business of developing, 

manufacturing and selling the “MailDefender,” a machine that allegedly processes packets of 

mail to render deadly pathogens, such as anthrax, inert.   

21. While Bio Defense’s “operations” have generated approximately $26.8 million in 

cash payments to the company from 2004 through early 2011, only a small fraction of that cash 

has been income generated from the sales of its purported product.  Instead, $26.2 million, or 

ninety-seven percent of this cash has been generated from the unlawful unregistered offering and 

sale of Bio Defense securities to investors.   

22. Bio Defense has never generated profit.  Since 2004, each year it has generated 

over $2 million in losses.  In 2008 and 2009, the company generated net losses of over $5 

million.   

23. Despite the lack of financial success, from 2004 through 2010, Bio Defense has 

handsomely paid its senior officers, either directly or through their business entities.  The 

company has paid Lu over $1.6 million, Morrone approximately $1.3 million, and  Jurberg 

approximately $1.2 million. 

I. The Unlawful Offer and Sale of Bio Defense’s Unregistered Securities from 2004 
through August 2008. 

24. The unregistered offering and sale of Bio Defense’s securities from 2004 through 

August 2008 was perpetrated by Bio Defense through Lu, Morrone and Jurberg.  



  

 9 

25. During that time, Lu, Morrone, and Jurberg solicited investors directly, or 

indirectly through third-parties, by telephone, regular mail, or electronic mail for offers to 

purchase Bio Defense securities.   

26. Bio Defense paid Lu, Morrone and Jurberg transaction-based compensation for 

the money successfully raised from the sale of Bio Defense securities.  According to Bio 

Defense, the compensation with respect to selling company shares generally ranged between five 

and ten percent of the amount raised.  On occasion the amount would be twenty percent if more 

than one individual was involved in the selling effort. 

II. The No-Financial-Compensation Lie. 

27. During this period from 2004 through August 2008, Lu, Morrone and Jurberg 

knowingly or recklessly solicited investors and obtained their investments by means of false or 

misleading statements about whether Bio Defense employees were receiving financial 

compensation from the company.  As a start-up company with few product sales and ongoing 

development issues, one of the biggest issues for Bio Defense and its investors was the 

company’s use of its limited cash, most of which was raised from investors.  Lu, Morrone, and 

Jurberg knowingly or recklessly created a false impression with potential investors that Bio 

Defense preserved its cash assets by having employees who worked for no, or very little, pay, 

suggesting that these employees were working solely or primarily for “sweat equity” shares, 

which might later become valuable when the company became profitable or went public. 

28. For example, in the course of soliciting an offer to purchase Bio Defense 

securities from Investor A in the fall of 2004, Lu and Morrone told Investor A that none of the 

Bio Defense employees received paychecks in Bio Defense’s history.  Lu and Morrone knew or 

were reckless in disregarding the fact that this statement was materially false and misleading.  In 



  

 10 

fact, in 2004 alone, Bio Defense paid approximately $1 million in compensation to its officers 

and employees, well over half of which was paid to Lu, Morrone and Jurberg.  By September of 

2004, Bio Defense had already paid $192,000 to Lu, $114,000 to Morrone, and $82,000 to 

Jurberg.  By the end of 2004, Bio Defense paid Lu over $385,000, Morrone over $222,000, and 

Jurberg over $160,000.  The omitted fact that Bio Defense was paying its employees several 

hundred thousand dollars in compensation was a material fact that would have assumed actual 

significance in the deliberations of a reasonable investor.  Following these false and misleading 

statements by Lu and Morrone, Investor A purchased Bio Defense securities in exchange for 

payment of $20,000.   

29. As a further example, in the course of soliciting an offer to purchase Bio Defense 

securities from Investor B in the fall of 2004, Lu, Morrone, and Jurberg told Investor B that 

employees were not getting paid.  Lu, Morrone and Jurberg knew or were reckless in 

disregarding the fact that this statement was materially false and misleading.  In fact, in 2004 

alone, Bio Defense paid approximately $1 million in compensation to its officers and employees, 

well over half of which was paid to Lu, Morrone and Jurberg.  By September of 2004, Bio 

Defense had already paid $192,000 to Lu, $114,000 to Morrone, and $82,000 to Jurberg.  By the 

end of 2004, Bio Defense paid Lu over $385,000, Morrone over $222,000, and Jurberg over 

$160,000.  The omitted fact that Bio Defense was paying its employees several hundred 

thousand dollars in compensation was a material fact that would have assumed actual 

significance in the deliberations of a reasonable investor.  Following these false and misleading 

statements by Lu, Morrone and Jurberg, Investor B purchased Bio Defense securities in 

exchange for payment of $20,000. 



  

 11 

30. As a further example, in the course of soliciting an offer to purchase Bio Defense 

securities from Investor C in 2006, Lu, Morrone, and Jurberg told Investor C that no one at the 

company was being paid, other than an engineer A.N. who was receiving a small salary.  Lu, 

Morrone and Jurberg also told Investor C that they were only receiving shares of Bio Defense 

stock for their efforts on behalf of the company.  Lu, Morrone and Jurberg knew or were reckless 

in disregarding the fact that these statements were materially false and misleading.  In 2004, Bio 

Defense paid approximately $1 million in compensation to its officers and employees, well over 

half of which was paid to Lu, Morrone and Jurberg.  That year, Lu received approximately 

$385,000 in compensation.  Morrone received approximately $233,000 in compensation.  

Jurberg received approximately $161,000 in compensation.  In 2005, Bio Defense paid 

approximately $980,000 to its employees and officers, well over half of which was paid to Lu, 

Morrone and Jurberg.  In 2005, Lu received approximately $203,000 in compensation.  Morrone 

received approximately $177,000 in compensation.  Jurberg received approximately $190,000 in 

compensation.  The omitted fact that Bio Defense had been paying its employees several 

hundred thousand dollars a year in compensation, for a total of over $2 million for the previous 

two years, was a material fact that would have assumed actual significance in the deliberations of 

a reasonable investor.  Following these false and misleading statements by Lu, Morrone and 

Jurberg, Investor C purchased Bio Defense securities in exchange for payments totaling 

approximately $225,000. 

III. Bio Defense Attracts Attention of State Regulators. 

31. Between at least March 2005 and September 2007, Lu, Morrone, and Jurberg, 

acting directly and through a third-party agent, offered and sold shares of Bio Defense stock in 

Texas, in violation of Sections 7 and 12 of the Texas Securities Act. 



  

 12 

32. On March 28, 2008, Lu, Morrone and Jurberg entered an “agreed cease and desist 

order,” with the Texas State Securities Board, pursuant to which they consented to entry of 

findings of fact and conclusions of law that they offered and sold Bio Defense’s stock in Texas 

in violation of the Texas Securities Act.  They also agreed to cease and desist from offering or 

selling any security in Texas in violation of Texas law. 

33. In the spring of 2008, Bio Defense received a subpoena from the Massachusetts 

Securities Division.  In October 2008, the Massachusetts Securities Division filed an 

administrative complaint against Bio Defense and Lu, alleging, among other things, that Bio 

Defense, Lu, Morrone and Jurberg had unlawfully sold unregistered Bio Defense securities to 

Massachusetts residents.  The complaint further alleged that Bio Defense had paid Lu, Morrone 

and Jurberg transaction-based compensation for their efforts in the offer and sale of these 

securities. 

IV. Bio Defense’s Transformation into a Deceptive Scheme to Defraud.  

34. After receiving notice of the Texas and Massachusetts regulator inquiries, Bio 

Defense, Lu and Morrone decided that it would be more advantageous to offer and sell Bio 

Defense’s securities to potential investors located outside the United States.  To that end, 

although Bio Defense continued to sell some securities in the United States, sometime in the first 

seven months of 2008, Bio Defense, Lu and Morrone sought the guidance and assistance of 

defendants Brett Hamburger and Anthony Orth to formulate a plan to offer and sell Bio 

Defense’s securities overseas.  In turn, Hamburger and Orth connected Bio Defense with a series 

of international boiler-room operations that would offer and sell Bio Defense’s securities 

overseas in exchange for payment of seventy five percent of all money raised from investors.  By 

agreeing to pay boiler-room call centers seventy five percent of every dollar raised, the 

defendants transformed the company into a deceptive scheme to defraud investors. 



  

 13 

35. Brett Hamburger is a felon.  In March 2003, the United States District Court for 

the Eastern District of New York adjudged Hamburger guilty of conspiracy to commit securities 

fraud.  The Court ordered Hamburger to pay restitution in the amount of $290,000 as well as 

monthly payments of $500 to the Court and of another $500 to a particular victim for five years.   

The Court also sentenced Hamburger to serve 10 months of home detention and placed him on 5 

years of probation.  Hamburger’s probation therefore ended March 31, 2008.   

36. In 2008, both Lu and Morrone knew that Hamburger was a felon and that his 

conviction related to securities fraud.  Hamburger had told them. 

37. Two years earlier, in 2006, Lu and Morrone both provided support to Hamburger 

in a request to modify his criminal sentence.  Lu appeared at the modification hearing as 

Hamburger’s “employer.”  Morrone provided Hamburger’s defense counsel with information 

concerning the purported value of Bio Defense stock.  As part of the sentence modification 

request, Hamburger attempted to offer his previous victims shares of Bio Defense stock as a 

form of restitution.  Despite Morrone’s proffer of estimated value, the District Court rejected 

Hamburger’s offer to provide Bio Defense stock as a form of restitution to his previous securities 

fraud victims. 

38. Despite knowledge of Hamburger’s previous conviction for securities fraud, in 

early 2008, Bio Defense, Lu and Morrone relied on him and Orth to find Bio Defense a means 

for offering and selling the company’s securities overseas. 

39. In approximately August 2008, Hamburger introduced Lu, Morrone and Jurberg 

to Daniel Marsh Consultors, S.L., which purported to be European subsidiary of Agile 

Consultants, Ltd., a company purported to be located in Cyprus (collectively, “Agile 

Consultants”).  Lu, Morrone and Jurberg learned through Hamburger that Agile would offer and 



  

 14 

sell Bio Defense’s securities to potential investors overseas in exchange for payment of seventy-

five percent of all money raised. 

40. Through Hamburger, Agile provided Bio Defense, Lu and Morrone with a 

proposed “Business Alliance” agreement.  The agreement itself made no mention of the real 

reason Bio Defense was hiring Agile: to solicit overseas investors for offers to purchase Bio 

Defense stock.  It also made no mention of the exorbitant seventy-five-percent fee.  Instead, the 

agreement provided vague and indefinite terms, which were designed to mask the unlawful 

activity to which the parties would enter agreement. 

41. On August 1, 2008, Bio Defense entered the business alliance agreement with 

Agile.  Although Lu was the only Bio Defense officer to sign the deceptive agreement, Lu, 

Morrone, Jurberg and Hamburger knew that they and the company were agreeing to have Bio 

Defense’s securities offered and sold in Europe by an allegedly Cypress-based entity that would 

be paid seventy-five percent of all money raised.  In addition, as will be explained in further 

detail below, Bio Defense and its officers agreed and knew that they and the company would be 

following up these call center solicitations with direct offers of securities from Bio Defense 

itself, which required their substantial participation in the scheme.  While Agile and its boiler 

rooms would be making initial solicitations for offers to purchase Bio Defense securities, Bio 

Defense and its officers would be responsible for (i) sending out investor offering documents to 

solicited investors, (ii) receiving proposed subscription agreements from prospective investors, 

(iii) receiving investor money in connection with those proposed subscription agreements, (iv) 

issuing Bio Defense stock certificates for completed agreements, (v) distributing seventy-five 

percent of every dollar received to Agile and its boiler-room operators, and (vi) responding to 

inquiries from prospective investors and investors.  As described below, during the course of this 



  

 15 

scheme, Lu, Morrone and Jurberg all substantially participated in these home office activities to 

support the scheme to defraud facilitated by Hamburger, Orth and their international call centers. 

42. Hamburger managed the call center activities for Bio Defense and coordinate 

communications between the boiler-rooms and Bio Defense.  For this management and 

coordination, Bio Defense agreed to pay Hamburger a fee of twelve and a half percent of the net 

investor proceeds retained by the company after payment of the boiler-room call centers. 

43. As discussed below, Orth eventually assumed Hamburger’s role in identical 

fundraising projects for Bio Defense.  For his management and coordination, Bio Defense agreed 

to pay Orth a fee of fifteen percent of the net investor proceeds retained by the company after 

payment of the boiler-room call centers. 

A. Preparation Activities 

44. Contemporaneously with the signing of the Agile business alliance agreement, 

Bio Defense, Lu, Morrone, Jurberg, Hamburger and Orth worked together to prepare the process 

for capitalizing on the initial high-pressure solicitations of potential overseas investors. 

45. Hamburger, Morrone and Lu oversaw the creation of a “weekly report” designed 

to track investors solicited by the boiler-room operations.  The report tracked the date of 

solicitation, the name of the solicited investor, the amount of money committed by the investor, 

the number of shares sold, and the assignment of a “reference” number to track the particular 

solicitations and investments.  The weekly report actually used by the defendants included 

additional columns for identification of wire transfer payees as well as calculation of the seventy-

five percent fee owed to Agile each week.   

46. Hamburger and Morrone worked together to create a form solicitation letter, 

under Morrone’s signature, to be sent to prospective investors.   



  

 16 

47. Morrone also provided Hamburger with Bio Defense offering documents, 

including multiple draft copies of a Bio Defense subscription agreement.  Morrone also provided 

Hamburger with “key corporate updates” for use by the boiler-room operations in soliciting 

offers to purchase Bio Defense securities. 

48. Jurberg provided company letterhead to Hamburger for use by the boiler-rooms in 

soliciting potential Bio Defense investors. 

49. Orth created a caller script for the boiler-room operations, which he shared by 

email with Morrone and Jurberg.  This script was materially false and misleading.  The script 

described Bio Defense as a “defense manufacturer” that manufactured a “mail decontamination 

system called the mail defender.”  This description was materially misleading and false because, 

from at least August 2008 through approximately July 2010, Bio Defense’s most substantial 

source of cash generation and expense was its securities promotion and sales activities.  The cash 

inflows and outflows of the company were devoted to the selling of its securities, not 

manufacturing its purported product.  This omitted fact would have assumed actual significance 

in the mind of a reasonable investor.  Morrone and Jurberg forwarded this caller script to 

Hamburger for use with the boiler-room operations. 

50. Lu opened a bank account at a U.S. banking institution in the name of Bio 

Defense Corporation for the specific purpose of receiving investor funds and transferring those 

funds to the overseas call centers.  Once the account was opened, Lu provided the bank account 

information for wiring instructions, including the account number as well as the bank’s routing 

number and international identifier code (necessary for international wire transfers), to Morrone, 

Jurberg, and Hamburger.  Over the course of the three year operation, Bio Defense, through Lu 



  

 17 

or a person working at Lu’s direction, opened several different accounts for the overseas boiler-

room projects.    

51. Morrone and Hamburger arranged for the creation of Bio Defense email accounts 

to be used by call center employees. 

52. The boiler-room operations were run out of, among other places, Spain and 

Portugal.  In the first week of August 2008, Hamburger was in Spain preparing for the boiler-

room operations.  On August 4, Morrone sent copies of the Bio Defense draft offering 

documents by facsimile to Hamburger’s hotel room in Spain and sent an additional copy by 

email.  On August 5, Morrone sent Hamburger, by facsimile and email, a copy of the signed 

Business Alliance Agreement and a copy of the revised introduction letter.  On August 5, 

Morrone sent Hamburger, by facsimile and email, another copy of the payment instructions for 

use with potential Bio Defense investors.   During this time, Morrone was also in daily cell 

phone contact with Hamburger. 

B. Operation of the Scheme To Defraud 

53.  Once the boiler-room operations were up and running, the scheme worked 

generally as follows.  The boiler-rooms called potential investors in the United Kingdom to 

solicit offers to purchase Bio Defense stock using high pressure sales tactics.  If a potential 

investor expressed interest in purchasing Bio Defense securities, that investor’s name was passed 

to Bio Defense along with an investor reference number.  Bio Defense then sent the potential 

investor an “investor packet” by email or overnight courier.  The investor packet included (i) a 

cover letter from Jonathan Morrone, (ii) a proposed subscription agreement, and (iii) payment 

instructions. 



  

 18 

54.   The cover letter from Morrone instructed prospective investors to fill in the 

“highlighted areas” of the subscription agreement and “fax it back to Jonathan Morrone” at Bio 

Defense and send the originals to him by mail.  Through letter, Morrone told investors that 

“[u]pon receipt of payment for the shares, [he] would mail to [them] by overnight express [their] 

share certificate.”   

55. Morrone’s letter also contained false and misleading statements to maintain the 

atmosphere of urgency and exclusivity created by the boiler-room operations.  Morrone’s letter 

told investors:  “Please be advised that there are only 10 million shares available for this offering 

and I can only hold your allocation for 10 days from the receipt of paperwork.  Immediate 

attention is required.”  Morrone knew these statements were false and misleading.   Bio 

Defense did not have any specific numeric or time limitations on its purported “offering.”  In 

fact, the company did not have any corporate resolutions creating any specific offering of stock 

for these investors.  Morrone’s statements concerning offering amounts and time limitations 

were pure fiction to keep the pressure on prospective investors. 

56. The subscription agreement included in the investor packet purported to be an 

offer to purchase securities from the prospective investor.  The last page of the subscription 

agreement was the “Subscription Signature Page,” which purported to be the offer to purchase 

Bio Defense stock that had been solicited from prospective investors.  On this page, Bio Defense 

pre-filled the form with the number of shares of common stock subscribed as well as the total 

payment amount, which had been supplied by the boiler-rooms.  To complete the form, the 

prospective investor was required to provide certain personal information, including a name for 

the stock certificate, and then sign the offer.  The first lines of the subscription signature page 

told prospective investors to “fax this back immediately” to Bio Defense’s facsimile line in 



  

 19 

Boston, Massachusetts.  The subscription purported to be completed upon delivery of the 

subscription agreement to Bio Defense along with payment for the shares to Bio Defense’s bank 

account. 

57. Bio Defense incurred irrevocable liability for the sale of its securities when the 

company accepted delivery of the prospective investor’s subscription agreement in 

Massachusetts and confirmed receipt of the investor’s payment in a Bio Defense’s bank account 

within the United States.  In addition, because Bio Defense was issuing stock certificates to these 

investors from its principal place of business in Boston, Massachusetts, title to these securities 

passed from Bio Defense to these investors within the United States.   

58. The subscription agreement contained a materially misleading statement 

concerning “fees and expenses.”  According to the agreement, “[e]ach of the parties hereto shall 

pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or 

others engaged by such party) in connection with this Subscription Agreement and the 

transactions contemplated hereby whether or not the transactions contemplated hereby are 

consummated.”  This statement was misleading because it omitted the material fact that Bio 

Defense had agreed to pay its boiler-room stock promoters a fee of seventy-five percent of every 

dollar raised from investors--a fact that would have assumed actual significance in the 

deliberations of a reasonable investor.  

59. With regard to the attached payment instructions, there were at least two versions 

sent by Bio Defense to prospective investors.  In the first version, investors were requested to 

mail their checks and the original, completed subscription agreement to Bio Defense.  To 

accomplish this delivery, the instructions asked prospective investors to “contact DHL to request 

a pick up” and “ask the customer representative to have the courier bring” an international 



  

 20 

waybill and an express envelope.  The instructions provided the United Kingdom telephone 

number for DHL.  They also provided the prospective investor with an account number to use in 

the waybill so that Bio Defense would be charged the cost of the international delivery.  The 

instructions further provided that the receiver address should read:  “Bio Defense Corporation, 

Attn: Jonathan Morrone, 12 Channel Street, 9th Floor, Boston, Massachusetts  02210, USA.”  

The second version of the payment instructions provided wiring instructions to Bio Defense’s 

bank accounts and instructed potential investors to “complete and sign these instructions and 

give them to your bank.”  These payment instructions required the prospective investor to fill in 

his or her name, account number, and payment amount in United States dollars.  This payment 

instruction form also had pre-filled information, including a reference number linking the 

subscription payment to a particular boiler-room solicitation, as well as Bio Defense’s bank 

account details. 

60. Bio Defense, through the individual defendants and the boiler-room call centers, 

conducted four rounds of soliciting U.K. investors. Bio Defense labeled these four rounds, 

individually: “EU Project,” “PT Project,” “CA Project,” and “GH Project.” 

61. Hamburger managed the boiler-room call center operations for the EU and PT 

projects.  Lu, Morrone, and Jurberg, and persons working at their direction, managed Bio 

Defense’s follow up solicitations and sales of Bio Defense securities, as well as the payment of 

the call centers and Hamburger. 

62. Bio Defense paid Hamburger twelve and a half percent of the net fund raising 

proceeds (after the call centers’ cut) for his services in managing the EU Project and the PT 

Project.21 

63. Orth managed the boiler-room operations for the CA and GH projects.  Lu, 

Morrone, and Jurberg, and persons working at their direction, managed Bio Defense’s follow up 

solicitations and sales of Bio Defense securities, as well as the payment of the boiler-room call 

centers and Orth. 

64. Bio Defense paid Orth fifteen percent of net investor fundraising proceeds (after 

the call centers’ cut) for his services in managing the CA Project and the PT Project.  

  i. The EU and PT Projects 

65. From approximately August through December 2008, Hamburger, Lu, Morrone, 

and Jurberg ran the EU Project in concert with the solicitations made by the Agile call centers. 

66. Each week during this time period, Agile provided Bio Defense with the names of 

the solicited U.K. investors, the amounts verbally committed by these investors, and the 

investors’ addresses.  Morrone, Jurberg, or Bio Defense staff working at their direction sent out 

the investor packages by an international mail delivery service.  As investors faxed in their 

subscription signature pages, they were received by Morrone or Jurberg, or Bio Defense staff 

working at their direction.  Morrone and Jurberg then ensured that Lu signed a Bio Defense stock 

certificate in the name of the new Bio Defense investor.  Bio Defense then confirmed receipt of 

the investor money and sent a copy of the stock certificate to the investor by international mail 

service.  Bio Defense would then pay the seventy-five percent fee to Agile and the twelve-and-a-

half percent fee to Hamburger in his name or the name of his consulting company. 

67. As money came pouring into Bio Defense’s bank accounts, Lu sent copies of the 

bank statements to Hamburger, Morrone and Jurberg by email, so that they could see the large 

amount of money being generated by the boiler-room call center solicitation efforts.  In addition, 



  

 22 

Lu copied Hamburger, Morrone and Jurberg on Agile invoices and Bio Defense’s wire payment 

of those invoices. 

68. In addition, for the duration of the project, Bio Defense’s accounting department 

sent out a weekly project report to Hamburger, Morrone and Jurberg.  The report showed the 

names of investors, the amount paid by the investor, and the investor’s reference number.  The 

report also tallied the amount raised each week and the grand total for the completed weeks 

along with a calculation of the seventy-five-percent fee owed to Agile. 

69. During the course of the EU Project, Lu, Morrone, Jurberg, and Orth received 

emails clearly indicating that Bio Defense’s potential investors were being subject to high-

pressure sales tactics. 

70. On September 26, 2008, Morrone received an email from solicited investor S.D.  

In the email, S.D. reported:  “Jonathan--Just to confirm that I will not be pursuing the Offer of 

Biodefense shares.  I have tried to explain to Matthew Bellamy of World Capital (?), but his 

ability to talk greatly exceeds his ability to listen.” 

71. On October 4, 2008, Morrone received an email from solicited investor A.T.  In 

the email, A.T. reported:  “Dear Mr. Morrone,  Your contacts about the Biodefense Corporation 

have arrived.  I am a bit puzzled to explain how we got to this stage as I understood that I clearly 

stated when first approached that I am not currently in a position to take up the offer!  That 

remains the case and I am not able to take up the option, attractive though it seems to be.” 

72. On November 29, 2008, Morrone received an email from solicited investor C.H.  

In the email, C.H. reported:  “Hello, I have been approached by a company, Securities 

Associates, wanting me to invest in your company.  I am not convinced this is genuine, can you 

advise me please?”  



  

 23 

73. Morrone forwarded these complaints to Hamburger, the person previously 

convicted of securities fraud who was being paid to manage the boiler-room call center 

operations for Bio Defense.   

74. Morrone also was aware, from the beginning of the EU Project fund raising 

activities, of the flood of investor money generated by the solicitation leads of the international 

call centers and their excessive fees.  He personally reviewed Agile’s first-week invoice and the 

Bio Defense accounting department report for that week.  These documents detailed the dollar 

amount raised by the call centers as well as the dollar amount of the seventy-five-percent fee.  In 

these documents, Morrone saw that, in the first week of operations, Agile billed Bio Defense a 

fee of $266,201 on investor payments of $354,935.   

75. In October 2008, Hamburger and Morrone received a breakdown of the efficiency 

of the call center operations.  The document showed, among other things, (i) the percentage of 

trades written by each group; (ii) the number of trades written versus trades that actually resulted 

in signed subscription offers from investors; (iii) the total dollar amount written by call center 

solicitations versus the amount actually paid by investors.  The document identified the call 

centers by either aliases, such as “Maserati,” “Ferrari,” and “C.Faxes,” or simply by the range of 

investor reference number assigned to the call center. 

76. Morrone was also provided copies of communications sent by Hamburger to the 

international call centers.  For example, in November 2008, Hamburger sent Morrone a copy of a 

directive he provided to the call centers.  In this communication, Hamburger told the call centers 

that Bio Defense would “no longer accept trades of less than $25,000” because the company was 

spending “$8,000 per week” on mailing investor packages to the large number of potential 



  

 24 

investors solicited by call centers, but not enough of the initial solicitations were leading to 

actual investments of desired size. 

77. As the result of the coordinated actions of Lu, Morrone, Jurberg and Hamburger, 

by the conclusion of the five-month EU project, Bio Defense raised approximately $3.4 million 

from the sale of Bio Defense securities to U.K. investors, of which Bio Defense paid 

approximately $2.5 million to Agile.   

78. Beginning in approximately October 2008, Hamburger, Lu, Morrone, and Jurberg 

ran the PT Project in concert with the solicitations made by international boiler-room call 

centers. 

79. During this project, Bio Defense paid the same seventy-five percent fee to boiler-

room operators, but the call centers submitted invoices with new names, such as “Mute and 

Reboot,” “RULUSO, Ltd.,” “Red Enterprises, Inc.,” and “Conyers Consulting.”  These invoices 

requested payment to banking institutions located in foreign countries outside the jurisdiction of 

the United States and the United Kingdom, such as Tanzania and Portugal.   

80. Despite the change in invoicing name, however, the operations of the project were 

exactly the same as the EU Project.  Hamburger continued to manage the boiler-room call center 

operations on behalf of Bio Defense.  The boiler-rooms called potential investors in the United 

Kingdom to solicit offers to purchase Bio Defense stock using high pressure sales tactics.  If a 

potential investor expressed interest in purchasing Bio Defense securities, that investor’s name 

was passed to Bio Defense.  Bio Defense then sent the potential investor an “investor packet” by 

email or overnight courier.  The investor packet included (i) the cover letter from Jonathan 

Morrone, (ii) the proposed subscription agreement, and (iii) payment instructions. 



  

 25 

81. Each week during this time, the boiler-rooms provided Bio Defense with the 

names of the solicited U.K. investors, the amounts verbally committed by these investors, and 

the investors’ addresses.  Bio Defense, under the leadership of Lu, Morrone and Jurberg, sent out 

the investor packages by international mail delivery.  As investors faxed in their subscription 

signature pages, they were received by Morrone or Jurberg, or staff working at their direction, 

who then ensured that Lu signed a Bio Defense stock certificate to be sent to the new Bio 

Defense investor.  Bio Defense then confirmed receipt of the investor money and sent a copy of 

the stock certificate to the investor.  Bio Defense then paid the seventy-five percent fee to Agile 

and the twelve and a half percent fee to Hamburger in his name or the name of his consulting 

company. 

82. The PT Project ran until approximately April 2010.  By the conclusion of the 

eighteen-month project, Bio Defense raised approximately $3.3 million from the sale of Bio 

Defense securities to U.K. investors, of which Bio Defense paid approximately $2.1 million to 

Agile.   

83. For managing the boiler-room call center operations of both the EU and the PT 

projects, Bio Defense ultimately paid Hamburger, in his name or the name of his consulting 

company, $357,361 of the net investor proceeds retained by the company after payment of the 

boiler-room call centers. 

 ii. The CA and GH Projects 

84. Beginning in approximately March 2009, Orth, Lu, Morrone, and Jurberg ran the 

CA Project in concert with the solicitations made by the boiler-room call centers.   

85. As in the PT Project, the boiler-room entities submitted invoices with new names, 

such as “M Management,” “RainMax,” “Hillside,” “WWD, Int’l,” and “Omaham Development.”  



  

 26 

These invoices requested payment to banking institutions located in foreign countries outside the 

jurisdiction of the United States and the United Kingdom, such as Belize, Cyprus, Panama, and 

the Seychelles Islands.   

86. Despite the change in invoicing name, however, the operations of the project were 

exactly the same as the EU Project, with the exception that Orth played Hamburger’s role in 

managing the boiler-room call center operations on behalf of Bio Defense.  The boiler-rooms 

called potential investors in the United Kingdom to solicit offers to purchase Bio Defense stock 

using high pressure sales tactics.  If a potential investor expressed interest in purchasing Bio 

Defense securities, that investor’s name was passed to Bio Defense.  Bio Defense then sent the 

potential investor the investor packet by email or overnight courier.  The investor packet 

included (i) the cover letter from Jonathan Morrone, (ii) the proposed subscription agreement, 

and (iii) payment instructions. 

87.  Each week during this time, the boiler-rooms provided Bio Defense with the 

names of the solicited U.K. investors, the amounts verbally committed by these investors, and 

the investors’ addresses.  Bio Defense, under the leadership of Lu, Morrone and Jurberg, sent out 

the investor packages by overnight delivery.  As investors faxed in their subscription signature 

pages, they were received by Morrone or Jurberg, or staff working at their direction, who then 

ensured that Lu signed a Bio Defense stock certificate to be sent to the new Bio Defense 

investor.  Bio Defense then confirmed receipt of the investor money and sent a copy of the stock 

certificate to the investor.  Bio Defense then paid a seventy percent fee to the boiler-rooms and, 

of the remaining thirty percent of investor proceeds, a fifteen percent fee to Orth in his name or 

the name of his consulting company. 



  

 27 

88. Orth and Lu prepared periodic summary reports showing, among other things, the 

70% commissions due to specific boiler rooms based on the funds raised from individual 

investors, and Orth distributed these reports to Lu, Morrone, Jurberg and other Bio Defense staff. 

89. The CA Project ran until approximately March 2010.  By the conclusion of the 

twelve-month project, Bio Defense had raised approximately $5.1 million from the sale of Bio 

Defense securities to U.K. investors, of which Bio Defense paid approximately $2.6 million to 

the boiler-rooms.   

90. Beginning in approximately April 2010, Orth, Lu, Morrone, and Jurberg ran the 

GH Project in concert with the solicitations made by the international boiler-room call centers.   

91. In this project, the boiler-room entities submitted invoices names similar to those 

used in the PT Project, such as “Conyers Consulting” and “Red Enterprise.”   

92. The operations of the project were exactly the same as they had been for the CA 

Project.  Orth managed the boiler-room call center operations on behalf of Bio Defense.  The 

boiler-rooms called potential investors in the United Kingdom to solicit offers to purchase Bio 

Defense stock using high pressure sales tactics.  If a potential investor expressed interest in 

purchasing Bio Defense securities, that investor’s name was passed to Bio Defense.  Bio Defense 

then sent the potential investor the investor packet by email or overnight courier.  The investor 

packet included (i) the cover letter from Jonathan Morrone, (ii) the proposed subscription 

agreement, and (iii) payment instructions. 

93. Each week during this time, the boiler-room call centers provided Bio Defense 

with the names of the solicited U.K. investors, the amounts verbally committed by these 

investors, and the investors’ addresses.  Bio Defense, under the leadership of Lu, Morrone and 

Jurberg, sent out the investor packages by international mail delivery.  As investors faxed in their 



  

 28 

subscription signature pages, they were received by Morrone or Jurberg, or staff working at their 

direction who then ensured that Lu signed a Bio Defense stock certificate to be sent to the new 

Bio Defense investor.  Bio Defense then confirmed receipt of the investor money and sent a copy 

of the stock certificate to the investor.  Bio Defense would then pay a seventy-five percent fee to 

the boiler-rooms and, of the remaining twenty five percent of investor proceeds, a fifteen percent 

fee to Orth in his name or the name of his consulting company. 

94. The GH Project ran until approximately July 2010.  By the conclusion of the four-

month project, Bio Defense had raised approximately $118,000 from the sale of Bio Defense 

securities to U.K. investors, of which Bio Defense paid approximately $108,740 to the boiler-

rooms. 

95. For managing the boiler-room operations of both the CA and the GH projects, Bio 

Defense ultimately paid Orth, in his name or the name of his consulting company $407,041 of 

the net investor proceeds retained by the company after payment of the boiler-room call centers. 

96. Ultimately, Bio Defense’s sale of its securities through the four projects raised a 

total approximate amount of $11.9 million, of which Bio Defense paid approximately $8 million, 

or sixty-seven percent of every dollar raised, to the boiler-room operators, Hamburger, and Orth. 

V. The Buy-Back Program. 

97.  In addition to selling shares of stock, beginning as early as 2008, Bio Defense has 

raised additional funds in the U.S. and internationally through a “Buy-Back Program,” through 

which investors were offered the opportunity to invest $50,000 purportedly to “purchase,” but 

not take possession of, a MailDefender machine, either completed or in production, in exchange 

for which the investor would be repaid its principal plus a $10,000 premium when the machine 

was sold and delivered to a Bio Defense customer.  In other words, investors in the Buy-Back 



  

 29 

program made an investment of money in the Bio Defense enterprise with an expectation that 

they would profit from the efforts of Bio Defense in manufacturing and selling the machine. Bio 

Defense represented the program to potential investors as a way for both the investor and Bio 

Defense to make profits from Bio Defense’s sale of the MailDefender machines.  There is no 

evidence, however, that any of the purported machines “sold” to investors were ever sold to any 

Bio Defense customer. 

98. During the course of the Buy-Back Program, false statements of material fact 

were made to entice investor participation.  For example, in approximately July 2010, Orth 

solicited Investor D by telephone to invest in the Bio Defense Buy Back Program. During the 

course of the solicitation, Orth told Investor D that the machine offered for investment had 

already been sold to Morgan Stanley.  Orth told Investor D that the investment would be secured 

by the actual machine, which sells for $300,000.  Orth told Investor D that Bio Defense had 

already sold 175 machines and had orders for thousands more.  Finally, Orth stated that he was 

not receiving a commission on his Buy Back Program sales.  All of these statements were false.  

Morgan Stanley has never purchased a MailDefender machine.  Bio Defense has never sold a 

MailDefender machine for $300,000.  In its ten year history, Bio Defense has sold fewer than ten 

machines.  After receiving Orth’s false representations, Investor D invested $50,000 to purchase 

one MailDefender machine.  Investor D has never been paid a return on his investment.          

First Claim for Relief 
(Violation of Section 17(a)(1), (2), and (3) of Securities Act By Bio Defense, Lu, Morrone, 

Jurberg, and Orth) 
 

99. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 98 above as if set forth fully herein. 

100. Bio Defense, Lu, Morrone, Jurberg and Orth, directly or indirectly, acting 



  

 30 

intentionally, knowingly or recklessly, by use of the means or instruments of transportation or 

communication in interstate commerce or by the use of the mails, in the offer or sale of 

securities:  (a) have employed or are employing devices, schemes, or artifices to defraud; (b) 

have obtained or are obtaining money or property by means of untrue statements of material fact 

or omissions to state a material fact necessary to make the statements not misleading; or (c) have 

engaged or are engaging in transactions, practices, or courses of business which operated as a 

fraud or deceit upon the purchasers of such securities. 

101. By engaging in the conduct described above, Bio Defense, Lu, Morrone, Jurberg 

and Orth have violated, and unless enjoined will continue to violate, Section 17(a)(1), (2), and 

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

Second Claim for Relief 
(Violation of Section 17(a)(1) and (3) of Securities Act By Hamburger 

 
102. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 98 above as if set forth fully herein. 

103. Hamburger, directly or indirectly, acting intentionally, knowingly or recklessly, 

by use of the means or instruments of transportation or communication in interstate commerce or 

by the use of the mails, in the offer or sale of securities:  (a) has employed or is employing 

devices, schemes, or artifices to defraud; and (b) has engaged or is engaging in transactions, 

practices, or courses of business which operated as a fraud or deceit upon the purchasers of such 

securities. 

104. By engaging in the conduct described above, Hamburger violated, and unless 

enjoined will continue to violate, Section 17(a)(1) and (3) of the Securities Act [15 U.S.C. 

§77q(a)].  



  

 31 

Third Claim for Relief  
(Violation of Section 10(b) of Exchange Act and Rule 10b-5(a), (b) and (c) By Bio Defense, 

Lu, Morrone, Jurberg, and Orth) 
 

105. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 98 above as if set forth fully herein. 

106. Bio Defense, Lu, Morrone, Jurberg and Orth, directly or indirectly, acting 

intentionally, knowingly or recklessly, in connection with the purchase or sale of securities, by 

use of the means or instrumentalities of interstate commerce or the facilities of a national 

securities exchange or the mail:  (a) have employed or are employing devices, schemes, or 

artifices to defraud; (b) have made or are making untrue statements of material fact or have 

omitted or are omitting to state material fact(s) necessary to make the statements made not 

misleading; or (c) have engaged or are engaging in acts, practices, or courses of business which 

operate as a fraud or deceit upon certain persons. 

107. By engaging in the conduct described above, Bio Defense, Lu, Morrone, Jurberg 

and Orth have violated, and unless enjoined will continue to violate, Section 10(b) of the 

Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5(a), (b), and (c) thereunder [17 C.F.R. 

§240.10b-5]. 

Fourth Claim for Relief  
(Violation of Section 10(b) of Exchange Act and Rule 10b-5(a) and (c) By Hamburger) 

 
108. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 98 above as if set forth fully herein. 

109. Hamburger, directly or indirectly, acting intentionally, knowingly or recklessly, in 

connection with the purchase or sale of securities, by use of the means or instrumentalities of 

interstate commerce or the facilities of a national securities exchange or the mail:  (a) has 

employed or is employing devices, schemes, or artifices to defraud; and (b) has engaged or is 



  

 32 

engaging in acts, practices, or courses of business which operate as a fraud or deceit upon certain 

persons. 

110. By engaging in the conduct described above, Hamburger has violated, and unless 

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

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

 

Fifth Claim for Relief 
(Violation of Section 5(a) and 5(c) of the Securities Act By Bio Defense, Lu, Morrone, 

Jurberg, and Orth) 

111. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 98 above as if set forth fully herein. 

112. Bio Defense, Lu, Morrone, Jurberg and Orth directly or indirectly: (a) made use 

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

mails to sell securities through the use or medium of a prospectus or otherwise; or carried 

securities or caused such securities to be carried through the mails or in interstate commerce, by 

means or instruments of transportation, for the purpose of sale or delivery after sale; and (b) 

made use of the means or instruments of transportation or communication in interstate commerce 

or of the mails to offer to sell or to offer to buy, through the use or medium of any prospectus or 

otherwise, securities without a registration statement having been filed with the Commission or 

being in effect as to such securities. 

113. Neither Bio Defense nor its securities offerings has ever been registered with the 

Commission.  Through the conduct described above, Bio Defense, Lu, Morrone, Jurberg and 

Orth sold securities to hundreds of investors and obtained proceeds of at least $26.2 million. 

114. By reason of the foregoing, Bio Defense, Lu, Morrone, Jurberg and Orth, singly 

or in concert, directly or indirectly, violated, and unless enjoined will again violate, Sections 5(a) 



  

 33 

and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) and 77e(c). 

Sixth Claim for Relief 
(Violation of Section 15(a)(1) of the Exchange Act By Lu, Morrone, Jurberg, Hamburger, 

and Orth) 
 

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

paragraphs 1 through 98 above as if set forth fully herein. 

116. In connection with the offer and sale of the securities of Bio Defense from 2004 

through July 2010, Lu, Morrone, Jurberg, Hamburger, and Orth made use of the mails or the 

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

attempt to induce the purchase or sale of Bio Defense securities. 

117. While engaged in this conduct, Lu, Jurberg, Hamburger or Orth were neither 

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

dealer. 

118. While Morrone engaged in this conduct from 2004 through 2007, his promotional 

activities on behalf of Bio Defense were not under the supervision or approval of the brokers 

with which he was associated.  While engaged in this conduct after his disassociation in 2007 

and continuing through July 2010, Morrone was neither registered with the Commission as a 

broker or dealer nor associated with a registered broker or dealer.  

119. By engaging in the conduct described above, Lu, Morrone, Jurberg, Hamburger 

and Orth have violated, and unless enjoined will continue to violate, Section 15(a)(1) of the 

Exchange Act [15 U.S.C. §78o(a)(1)]. 



  

 34 

Seventh Claim for Relief 
(Control Person Liability Under Section 20(a) of the Exchange Act Against Lu and 

Morrone for Bio Defense’s Violations of Section 17(a) of the Securities Act and Section 
10(b) of the Exchange Act and Rule 10b-5 Thereunder) 

120. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 98. 

121. Bio Defense, directly or indirectly, acting intentionally, knowingly or recklessly, 

by use of the means or instruments of transportation or communication in interstate commerce or 

by the use of the mails, in the offer or sale of securities:  (a) has employed or is employing 

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

means of untrue statements of material fact or omissions to state a material fact necessary to 

make the statements not misleading; or (c) has engaged or is engaging in transactions, practices, 

or courses of business which operated as a fraud or deceit upon the purchasers of such securities. 

122. Bio Defense, directly or indirectly, acting intentionally, knowingly or recklessly, 

by use of the means or instrumentalities of interstate commerce, or of the mails, or of a facility of 

a national securities exchange, in connection with the purchase or sale of a security: (a) 

employed devices, schemes or artifices to defraud; (b) made untrue statements of material fact 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; or (c) engaged in acts, practices, or 

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

123. Lu, as CEO and Chairman of the Board of Directors of Bio Defense, and 

Morrone, as senior executive vice president and a director of Bio Defense, exercised control 

over the management, general operations, and policies of Bio Defense, as well as the specific 

activities upon which Bio Defense’s violations are based. 



  

 35 

124. By reason of the foregoing, Lu and Morrone are liable as control persons under 

Section 20(a) of the Exchange Act [15 U.S.C. § 78t(a)] for Bio Defense’s violations of 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 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

Eighth Claim for Relief 
(Other Equitable Relief, Including Unjust Enrichment and Constructive Trust,  

Against Relief Defendant May’s International) 
 

125. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 98 above as if set forth fully herein. 

126. Section 21(d)(5) of the Exchange Act states: “In any action or proceeding brought 

or instituted by the Commission under any provision of the securities laws, the Commission may 

seek, and any Federal court may grant, any equitable relief that may be appropriate or necessary 

for the benefit of investors.” 

127. Relief defendant May’s International has received and possesses ill-gotten 

investor funds derived from the unlawful acts or practices of the Defendants dictating that, in 

equity and good conscience, it should not be allowed to retain such funds. 

128. May’s International has no legitimate claim to this property. 

129. As a result, May’s International is liable for unjust enrichment and should be 

required to return its ill-gotten gains, in an amount to be determined by the Court.  The Court 

should also impose a constructive trust on the ill-gotten investor funds in the possession of 

May’s International. 

  



  

 36 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission requests that this Court: 

A. Enter a permanent injunction restraining Defendants and each of their agents, 

servants, employees and attorneys and those persons in active concert or participation with them 

who receive actual notice of the injunction by personal service or otherwise, including facsimile 

transmission or overnight delivery service, from directly or indirectly engaging in the conduct 

described above, or in conduct of similar purport and effect, in violation of Sections 5(a), 5(c), 

and 17(a) of the Securities Act [15 U.S.C. §§ 77e(a), 77e(c) and 77q(a)]; Section 10(b) of the 

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

B. Require Defendants to disgorge their ill-gotten gains and losses avoided, plus pre-

judgment interest, with said monies to be distributed in accordance with a plan of distribution to 

be ordered by the Court; 

C. Require the Relief Defendant to disgorge all unjust enrichment and/or ill-gotten 

gain received from Defendants, plus prejudgment interest, with said moneys to be distributed in 

accordance with a plan of distribution to be ordered by the Court; 

D. Require Defendants to pay appropriate civil monetary penalties pursuant to 

Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)]; and Section 21(d)(3) of the Securities 

Exchange Act [15 U.S.C. § 78u(d)(3)];  

E. Order that Defendants Lu, Morrone, Jurberg, and Orth be prohibited from acting 

as officers or directors of any public company pursuant to Section 20(e) of the Securities Act [15 

U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; 

F. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and 



  

 37 

G. Grant such other and further relief as the Court deems just and proper. 

 

JURY DEMAND 

The Commission hereby demands a trial by jury on all claims so triable.   

  
 

Respectfully submitted, 

 
SECURITIES AND EXCHANGE COMMISSION 
 
By its attorneys, 

 
 
 
      /s/ R.M. Harper II      

Richard M. Harper II (Mass. Bar No. 634782) 
      Michele T. Perillo (Mass. Bar No. 629343) 
      Ellen Moynihan (Mass. Bar No. 567598) 
      33 Arch Street, 23rd Floor 

Boston, Massachusetts  02110 
Telephone:  (617) 573-8979 (Harper direct) 
Facsimile:   (617) 573-4590 
E-mail:  [email protected]    

Dated:  September 10, 2012