The SEC today charged two individuals, as well as Wyoming-based entities Biosynetics and Biosynetics Management (collectively, "Biosynetics"), with conducting fraudulent and unregistered offerings.

According to the SEC's complaint, from January 2018 until the present, Ben Schachtschneider and securities fraud recidivist Lambert Vander Tuig defrauded investors by using false statements and other deceptive conduct, such as aliases, to sell purported private placement investments in Biosynetics. The complaint alleges that Vander Tuig and Schachtschneider represented that investor funds would be used for research and development. As alleged, they also falsely described Biosynetics as an established pharmaceutical or nutraceutical company and told multiple investors that Biosynetics had agreements with large retailers to sell Biosynetics' sleep-aid product, when in fact no such agreements exist or existed. The complaint further alleges that Vander Tuig, Schachtschneider, and others raised at least $763,500 in the fraudulent and unregistered offerings from at least 28 investors, including a retired firefighter, a retired military officer, and multiple small business owners. In addition, most investor funds were allegedly misappropriated and used for bank withdrawals, personal expenses, payments to cold-callers working at Vander Tuig's direction, and various unrelated entities. According to the complaint, Schachtschneider and Vander Tuig personally received a combined $107,000 of investor funds.

The SEC's complaint, filed in federal court for the Central District of California, charges Vander Tuig, Schachtschneider, and Biosynetics with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities registration provisions of Section 5 of the Securities Act. The SEC seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties. The SEC also seeks disgorgement from relief defendant Galileo Labs, Inc.

The SEC's investigation, which remains ongoing, has been conducted by Michael Grimes, Shipra Wells, Carolyn Kurr, Adam Eisner, Will Connolly, and Sejal Bhakta, and supervised by Josh Felker. The litigation will be handled by Melissa Armstrong and Amy Longo, and supervised by Fred Block.

The SEC's Retail Strategy Task Force and Office of Investor Education and Advocacy (OIEA) encourage investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov. Investors can also use the SEC's SALI database to find information about certain people who have had judgments or orders issued against them in SEC court actions or administrative proceedings.