Bio-Heal Laboratories, Inc., et al.

On April 5, 2006, the SEC obtained a permanent injunction and other relief against Bio-Heal Laboratories in connection with its alleged fraudulent issuance and trading of shares of Bio-Heal, a start-up firm purportedly in the business of manufacturing topical and organic medical products.  According to the complaint, Bio-Heal improperly issued 12 million unrestricted shares to relief defendants MRMG Holdings, Kess Associates, Inc. and ICOR, Inc., and MRMG and Kess transferred their Bio-Heal shares to two other relief defendants, Bela Enterprises, LLC and Gibson Island Enterprises, LLC.

The SEC alleged that Bio-Heal improperly used Rule 504 of Regulation D of the Securities Act of 1933 to exempt the shares from the SEC registration requirements, and the shares were dumped on the market in conjunction with fraudulent touting of Bio-Heal on the Internet.  As part of the settlement, the Court ordered Bio-Heal to pay more than $600,000 in disgorgement of ill-gotten gains and prejudgment interest.  In addition, the Court ordered ICOR, Bela and Gibson to return the shares of Bio-Heal they received for cancellation by Bio-Heal, and ordered Bela and Gibson to pay disgorgement and prejudgment interest of approximately $1.5 million and $10 million respectively.

For more information about the SEC’s action, you can read Litigation Release Nos. 19203 (Apr. 27, 2005) and 19688 (May 4, 2006).

The Court also appointed Melanie E. Damian, Esq., as distribution agent who has set up a website. On November 14, 2007, the SEC announced that checks in the amount of approximately $2.7 million were sent to 833 investors, representing a 100 percent return of the defrauded investors' money.