FTC BARS COMPANY FROM MAKING FALSE CLAIMS ABOUT APP THAT CAN DIAGNOSE MELONOMA RISK

FROM:  U.S. FEDERAL TRADE COMMISSION
FTC Approves Final Order Barring Misleading Claims about App’s Ability to Diagnose or Assess the Risk of Melanoma

Following a public comment period, the Federal Trade Commission has approved a final consent order barring Health Discovery Corporation from making deceptive or unsupported claims that its app, MelApp, could help diagnose or assess consumers’ melanoma risk.

According to the FTC’s February 2015 complaint, MelApp instructed users to photograph a mole with a smartphone camera and input other information. It would then supposedly calculate the mole’s melanoma risk as low, medium, or high. The FTC charged that Health Discovery Corporation deceptively claimed the app accurately analyzed melanoma risk and could assess such risk in early stages, and that its accuracy was scientifically proven.

The final order settling the action bars the company from claiming that any device detects or diagnoses melanoma or its risk factors, or increases users’ chances of early detection, unless the representation is not misleading and is supported by competent and reliable scientific evidence. It also prohibits Health Discovery Corporation from making any other deceptive claims about a device’s health benefits or efficacy, or about the scientific support for any product or service, and requires the company to pay $17,963.

The Commission vote approving the final consent order and was 4-1, with Commissioner Maureen Ohlhausen voting no

NSF SUPPORTS FITNET APP FOR EXERCISE PARTICIPANTS

FROM:  NATIONAL SCIENCE FOUNDATION
Fitness app connects exercisers to experts
NSF-supported Fitnet uses powerful computing and networking infrastructure to enable new capabilities
March 23, 2015

Can advanced networking and next-generation applications help solve some of our nation's most pressing health problems? Can mobile devices and high-speed Internet be used to improve our health and well-being? Showing a commitment that they can, in 2012 the National Science Foundation (NSF) launched the US Ignite initiative to demonstrate the power of apps for social good.

One outcome of the program is that today you can go to the Apple or Android app store and download Fitnet, a free exercise app supported by NSF that uses the camera on your phone to automatically assess the quality of the exercise and give you a score. Fitnet can also connect you to an online personal fitness trainer who can track this information and suggest routines to try based on an individual's health goal.

This mobile app is one of many fitness apps that are finding mass audiences of individuals eager to use technology to improve their health and well-being.

But what's unique about Fitnet is that, at the same time it is marketing its current app, it is also looking to a future of faster, programmable gigabit networks, according to Kevin Hill, Fitnet's "data czar".

In 2012, Fitnet (originally called KinectHealth 3D) was one of eight applications given the distinction of "App of the Future" in the brainstorming round of the NSF-supported Mozilla Ignite Challenge, and one of 22 apps whose development was funded through the program.

The idea behind Fitnet was to develop a new kind of tele-fitness app that could leverage deeply programmable and low latency fiber-optic networks. The award from Mozilla Ignite Challenge provided seed funding to build a prototype and to demonstrate a proof of concept.

In 2013, Fitnet received an additional NSF award to advance the project in partnership with Virginia Tech. Fitnet has also worked closely with US Ignite, a public-private partnership that promotes the development and deployment of gigabit applications, to identify critical use cases for its cutting edge technologies.

"Validation from the Mozilla Ignite Challenge, US Ignite and National Science Foundation was critical to this idea becoming a reality," said Bob Summers, chief geek and founder of Fitnet. "Our country has a health problem which advanced sensor, data and communication technology can help solve."

Part of the goal of US Ignite is to advance great ideas from the concept and prototype stage into commercial products, and Fitnet is one of the program's early successes. The app has been downloaded 280,000 times and has thousands of core users in all 50 states and over 200 countries.

Fitnet is one of a handful of fitness apps supported by Chromecast (the streaming media player developed by Google) and was among the first to be integrated into Apple's HealthKit, which allows health and fitness apps to work together for holistic monitoring.

Two key features differentiate Fitnet from other exercise apps on the market: the use of a phone's camera and image processing capabilities to interpret motion; and the ability to connect to a trainer who can monitor your progress, see how you're performing and personalize your workout plan as needed.

For now, the image processing is done locally on the phone and consequently, the assessments are not as complex as they could be. Likewise, the interactions with the trainer are asynchronous and do not include a live video feed--a function of the fact that most people don't have unfettered access to gigabit networks and unlimited data plans. But Fitnet is exploring improvements to both aspects.

"It would be a gamble to try to start a business that was focused only on gigabit Internet," Hill said. "But at the same time we know that's coming and that there are these great features that could be realized with high speed networks.

"The cool thing about the US Ignite community is the ability to do a little bit of both: to have our consumer-facing side but still push the envelope and do some really cool research."

Pushing the envelope means imagining new and better ways to automatically assess the quality of exercise using the cloud, and creating a network of remote "wired trainers" who can serve an entire community, adding jobs and helping thousands get healthier. They've begun to put the infrastructure together to test these concepts, using Virginia Tech in Blacksburg, Va., as the testbed.

A virtual lab for next-generation networking

Virginia Tech has a unique confluence of resources that make it a great place to base their pilot, Hill says.

"We've got students who want to do exercise, we've got Virginia Tech Rec Sports [Department of Recreational Sports] that is interested in how technology can impact personal trainers, and we've got great computer resources," he said.

The resources Hill is referring to is the Global Environment for Networking Innovations, or GENI, an experimental, ultra-high-speed, programmable networking testbed, begun in 2007, that allows researchers to test new networking ideas at scale. Virginia Tech hosts one of GENI's 180 or so nodes.

"One of the big limits is just how much processing power we have available on today's mobile devices," said Hill. "We think we can make some significant progress by leveraging the power of a centralized server--that's where the GENI rack will be very helpful. With GENI we have access to the computer resources needed to throw the most sophisticated algorithms available at the problem."

The grant from NSF helped build the computing and networking infrastructure required to enable Fitnet and other apps with real-time analysis and interaction to work, and to run the experiment with students and professional trainers at Virginia Tech.

"Just as astronomers band together and build a telescope that the community uses as a discipline-wide research instrument, GENI is the networking equivalent of a national instrument," said Mark Gardner, network research manager in Information Technology at Virginia Tech, and the lead researcher on the GENI grant.

"As we add more nodes to GENI, the instrument becomes more powerful and more capable, and it's set up so that once you get an account on GENI, you can run experiments on hardware scattered across the world."

While GENI sounds a little like superfast Internet service, it's more than that. With GENI, researchers get a slice of network, storage and computing resources on-demand on which to run experiments or do specialized tasks.

"The GENI infrastructure predated clouds and software defined networking and yet it has features of both," Gardner said.

Unlike most clouds, with GENI, the experimenter can program the way the network functions to make sure that the time lag between a client and trainer is low, for instance, or that computations run concurrently on hundreds of virtual machines during times of high traffic.

"And when the fitness guys aren't using GENI, it may be used for some other experiment," Gardner added.

In fact, more than 3000 researchers have run over 100,000 experiments in the eight years since GENI was established.

Adding live interaction and real-time assessments

The future app the Fitnet team is envisioning will work something like this:

As individuals work out, the output of the exercise analysis algorithm, as well as the video of exercises, will be shipped in real-time to the web dashboard of a trainer, a fitness expert at Virginia Tech Rec Sports.
The trainer will work with many individuals at once, doing exercises particular to their needs and interests.
The automated exercise assessment tools will help the trainer figure out who needs help, who is bored and whose heart rate is increasing.
The trainer will use that information to interact with each of the exercisers, judge the impact of the training and make suggestions for future sessions.
In this model, trainers are able to effectively manage and provide feedback to up to 12 people simultaneously, which could lower the price, make the services more available and also make it extremely personalized.

"In a traditional exercise class, all the people need to be doing the exact same thing," Hill said. "Here we can have each person doing a personalized workout routine and the trainer can still manage and interact with all of them."

GENI allows Fitnet, and other apps, to bring these capabilities to life for students at Virginia Tech and eventually for the nation.

Engaged fitness for at-risk populations

As they were developing the Virginia Tech project, the Fitnet team was working with a different set of users: students in the Healthy Hawks treatment program, a comprehensive family-based behavioral program run by University of Kansas Medical Center.

Healthy Hawks helps children, adolescents and their families overcome issues related to weight. The University of Kansas team was interested in being able to interact with families in a digital fashion over the course of their twelve-week program, recalled Hill.

With support from the Mozilla Foundation's Gigabit Community Fund, also funded by NSF, the pilot program provided iPads, cellular data plans, and personalized children's exercise content from local Kansas City trainers to Kansas City families.

"Using Fitnet allowed us to increase our contact time with participating families very easily," said Ann Davis, a pediatric psychologist at the University of Kansas Medical Center, and director of both the Healthy Hawks program and the Center for Children's Healthy Lifestyles & Nutrition project.

Davis and her team not only encouraged the families to use the exercise app in their homes, but when they came to meet as a group, the doctors had information about the students' exercise at their fingertips and were able to give personalized feedback. The app also allowed the group's dedicated trainer to provide coaching prompts in real-time.

"With those features, we've been able to lower the drop out rate, and increase the students' fitness outcomes," Davis said.

The second group of Healthy Hawks is now going through the program, with encouraging results.

"We're excited to work with the Heathy Hawks to be on the leading edge of the mobile-health revolution," Hill said.

Fitnet is considering other possible partnerships too, including with physical therapists and other health professionals.

"We have this disconnected world right now where you've got step counters, heart rate monitors, exercise apps. You can look at that data, but it's very hard to make decisions based on that data," Hill said. "What we hope to do is be able to centralize, organize and pass that information over to experts."

With early access to emerging networking technologies and pilot projects underway with diverse audiences, the Fitnet team believes it will only be a few years before their gigabit app is ready for market--and before the nation's broadband network catches up to the capabilities of Fitnet.

"Applications are the essential driver of new technologies," said Summers. "And health applications such as Fitnet that leverage gigabit technologies are leading the way to answering the key question: 'Why does gig speed matter?'"

-- Aaron Dubrow, NSF
-- Robert Summers, Fitnet
Investigators
Robert Summers
Mark Gardner
Kevin Hill
Related Institutions/Organizations
GENI
US Ignite
Mozilla Foundation
Virginia Polytechnic Institute and State University

DOJ ANNOUNCES ITALIAN SHIPPING COMPANY WITH PAY $2.75 MILLION IN FINES

FROM:  U.S. JUSTICE DEPARTMENT
Friday, March 6, 2015
Italian Shipping Company Fined $2.75 Million for Environmental Crimes

Carbofin S.p.A., an Italian domiciled company that owned and operated the M/T Marigola was sentenced to pay an overall criminal penalty of $2.75 million by the Honorable Virginia M. Hernandez Covington for knowingly falsifying the vessel’s oil record book in violation of the Act to Prevent Pollution from Ships (APPS), announced the Department of Justice Environment and Natural Resources Division and the U.S. Attorney’s Office for the Middle District of Florida.

Out of the $2.75 million criminal penalty, $600,000 will be paid to the National Marine Sanctuary Foundation for the benefit of Florida’s only national marine sanctuary: the Florida Keys National Marine Sanctuary.  The funds are to be used to support the protection and preservation of natural resources located in and adjacent to the sanctuary, including the cleanup and remediation of pollution in the sanctuary; restoration of injured resources, particularly coral reefs and seagrass beds and species dependent on those habitats.  The funds will also support scientific research in, and public education about, the Florida Keys National Marine Sanctuary.

During 2013 and 2014, on numerous international voyages, senior members of the crew of the M/T Marigola directed the installation and use of a so-called “magic hose” to dispose of sludge, waste oil and oil-contaminated bilge water directly into the sea bypassing required pollution prevention equipment.  On April 16, 2014, the vessel called upon the Port of Tampa to load anhydrous ammonia.  Coast Guard inspectors boarded the vessel and were approached by two junior engineering crew members who showed the inspectors a video of the “magic pipe” hooked up between piping leading to the bilge tank and the vessel’s boiler blow down valve.  The boiler blow down valve is a discharge point for the boiler to release hot water and steam.  The inspectors had the valve removed and an oily black substance was discovered.  Oil samples taken from the “magic hose,” the bilge piping and the boiler blow down valve matched.  The Chief Engineer, Carmelo Giano, and the Second Engineer, Alessandro Messore, had previously pleaded guilty and were sentenced for their role in ordering the use of the “magic hose” to illegally discharge oily waste into the sea.

“We are extremely grateful to the U.S. Department of Justice in supporting the work of the National Marine Sanctuary Foundation on behalf of the nation's marine sanctuaries, including here at the Florida Keys National Marine Sanctuary,” said President and CEO Jason Patlis of the National Marine Sanctuary Foundation.  “These funds will go to critical education, research and restoration activities, including deployment of mooring buoys, coral reef restoration and study and mitigation of invasive species impacts.”

“Marine environmental protection is one of the Coast Guard's primary missions,” said Captain Gregory Case of the Port at Sector St. Petersburg.  “The Coast Guard takes marine pollution seriously and works cohesively with our partner agencies to hold those who violate international law accountable for their actions.  We anticipate the results of this case will deter future illegal oil discharges into the sea.”

Consistent with requirements in the APPS regulations, a vessel like the M/T Marigola, must maintain a record known as an oil record book in which transfer and disposal of all oil-contaminated waste and the discharge overboard and disposal otherwise of such waste, must be fully and accurately recorded by the person or persons in charge of the operations.  Oil-contaminated bilge waste can be discharged overboard if it is processed through on-board pollution prevention equipment known as the oily water separator (OWS).  Waste oil and sludge can only be disposed of using an on-board incinerator or by discharging the waste to a shore-side facility, barge or tanker truck.  Giano and Messore falsified the oil record book by not recording that oily waste was being disposed of through the boiler blow down valve.

During the course of the investigation, it was revealed that the oil record book for the M/T Marigola was falsified since at least June 16, 2013.  The investigation also revealed that illegal oily waste discharges had occurred from two other vessels owned and operated by Carbofin, the M/T’s Marola and Solaro.  On the M/T Marola, a “magic hose” was used between on or about December 2012 and April 2013 and on the M/T Solaro between on or about February to August 2013.

The case was investigated by U.S. Coast Guard Sector St. Petersburg and the U.S. Coast Guard Investigative Service.  The case was prosecuted by Kenneth E. Nelson of the Environmental Crimes Section of the Department of Justice and Matthew Mueller of the U.S. Attorney’s Office of the Middle District of Florida.

"STEALTHGENIE" SPAYWARE APP SELLER PLEADS GUILTY

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, November 25, 2014
Man Pleads Guilty for Selling "StealthGenie" Spyware App and Ordered to Pay $500,000 Fine

A Danish citizen today pleaded guilty in the Eastern District of Virginia and was ordered to pay a fine of $500,000 for advertising and selling StealthGenie, a spyware application (app) that could remotely monitor calls, texts, videos and other communications on mobile phones without detection.  This marks the first-ever criminal conviction concerning the advertisement and sale of a mobile device spyware app.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office made the announcement after a hearing before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia.

“Spyware is an electronic eavesdropping tool that secretly and illegally invades individual privacy,” said Assistant Attorney General Caldwell.  “Make no mistake: selling spyware is a federal crime, and the Criminal Division will make a federal case out if it.  Today’s guilty plea by a creator of the StealthGenie spyware is another demonstration of our commitment to prosecuting those who would invade personal privacy.”

“The defendant advertised and sold a spyware app that could be secretly installed on smart phones without the knowledge of the phones owner,” said U.S. Attorney Boente.  “This spyware app allowed individuals to intercept phone calls, electronic mail, text messages, voicemails and photographs of others.  The product allowed for the wholesale invasion of privacy by other individuals, and this office in coordination with our law enforcement partners will prosecute not just users of apps like this, but the makers and marketers of such tools as well.”

“Mr. Akbar is the first-ever person to admit criminal activity in advertising and selling spyware that invades an unwitting victim’s confidential communications,” said FBI Assistant Director in Charge McCabe.  “This illegal spyware provides individuals with an option to track a person’s every move without their knowledge.  As technology evolves, the FBI will continue to evolve to protect consumers from those who sell illegal spyware.”

According to the statement of facts accompanying the plea agreement in the case, Hammad Akbar, 31, is the chief executive officer of InvoCode Pvt. Limited and Cubitium Limited, the companies that advertised and sold StealthGenie online.  StealthGenie could be installed on a variety of different brands of mobile phones, including Apple’s iPhone, Google’s Android, and Blackberry Limited’s Blackberry.  Once installed, it could intercept all conversations and text messages sent using the phone.  The app was undetectable by most users and was advertised as being untraceable.

Akbar was arrested on Sept. 27, 2014, in Los Angeles and pleaded guilty today to sale of an interception device and advertisement of a known interception device.  After accepting the guilty plea, the court immediately sentenced Akbar to time served and ordered him to pay a $500,000 fine.  He was also ordered to forfeit the source code for StealthGenie to the government.

On Sept. 26, 2014, the court issued a temporary restraining order authorizing the FBI to temporarily disable the website hosting StealthGenie, which was hosted from a data center in Ashburn, Virginia.  The court later converted the order into a temporary injunction, and the website remains offline.

According to Akbar’s admissions, StealthGenie had numerous functions that permitted it to intercept both outgoing and incoming telephone calls, electronic mail, text messages, voicemail, and photographs from the smartphone on which it was installed.  The app could also turn on the phone’s microphone when it was not in use and record sounds and conversations that occurred near the phone.  All of these functions could be enabled without the knowledge of the user of the phone.

In order to install the app, the purchaser needed at least temporary possession of the target phone.  During the installation process on an Android smartphone, for example, the person installing the app was required to grant a series of permissions that allowed the app to access privileged information on the device.  Once the app was activated, it was started as a “background” (i.e., hidden) service and set up to launch automatically when the phone was powered on.  The only time that the app interacted with the screen was during activation, and the icon for the app was removed from the phone’s menu.  Akbar admitted that because of these characteristics, a typical smartphone user would not know that StealthGenie had been installed on his or her smartphone.  

Akbar also admitted to distributing an advertisement for StealthGenie through his website on Nov. 5, 2011, and to selling the app to an undercover agent of the FBI on Dec. 14, 2012.

This case was investigated by the FBI’s Washington Field Office, and was prosecuted by Senior Trial Attorney William A. Hall Jr. of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Jay V. Prabhu and Alexander Nguyen of the Eastern District of Virginia.

TWO COMPANIES SETTLE FTC CHARGES OF IMPROPERLY COLLECTING PERSONAL INFORMATION ON CHILDREN

FROM:  U.S. FEDERAL TRADE COMMISSION 

Yelp, TinyCo Settle FTC Charges Their Apps Improperly Collected Children’s Personal Information

Online review site Yelp, Inc., and mobile app developer TinyCo, Inc., agreed to settle separate Federal Trade Commission charges that they improperly collected children’s information in violation of the Children’s Online Privacy Protection Act, or COPPA, Rule. Under the terms of the settlements, Yelp will pay a $450,000 civil penalty, while TinyCo will pay a $300,000 civil penalty.

“As people – especially children – move more of their lives onto mobile devices, it’s important that they have the same consumer protections when they’re using an app that they have when they’re on a website,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Companies should take steps as they build and test their apps to make sure that children’s information won’t be collected without a parent’s consent.”

COPPA requires that companies collecting information about children under 13 online follow a number of steps to ensure that children’s information is protected, including clearly disclosing how the information is used directly to parents and seeking verifiable parental consent before collecting any information from a child.

Yelp, Inc.

The FTC’s complaint against Yelp alleges that, from 2009 to 2013, the company collected personal information from children through the Yelp app without first notifying parents and obtaining their consent. When consumers registered for Yelp through the app on their mobile device, according to the complaint, they were asked to provide their date of birth during the registration process.

According to the complaint, several thousand registrants provided a date of birth showing they were under 13 years old, and Yelp collected information from them including, for example, their name, e-mail address, and location, as well as any information that they posted on Yelp.

The FTC’s complaint alleges that Yelp failed to follow the COPPA Rule’s requirements, even though it knew – based on registrants’ birth dates – that children were registering for Yelp through the mobile app. According to the complaint, Yelp failed to implement a functional age-screen in its apps, thereby allowing children under 13 to register for the service, despite having an age-screen mechanism on its website. In addition, the complaint alleges that Yelp did not adequately test its apps to ensure that users under the age of 13 were prohibited from registering.

In addition to the $450,000 civil penalty, under the terms of its settlement with the FTC, Yelp must delete information it collected from consumers who stated they were 13 years of age or younger at the time they registered for the service, except in cases where the company can prove to the FTC that the consumers were actually older than 13.

The settlement will also require the company to comply with COPPA requirements in the future and submit a compliance report to the FTC in one year outlining its COPPA compliance program.

TinyCo, Inc.

The FTC’s complaint against TinyCo alleges that many of the company’s popular apps, which were downloaded more than 34 million times across the major mobile app stores, targeted children. Among the apps named in the complaint are Tiny Pets, Tiny Zoo, Tiny Monsters, Tiny Village and Mermaid Resort. The complaint alleges that the apps, through their use of themes appealing to children, brightly colored animated characters and simple language, were directed at children under 13 and thus, TinyCo was subject to the COPPA Rule.

Many of TinyCo’s apps included an optional feature that collected e-mail addresses from users, including children younger than age 13. In some of the company’s apps, by providing an e-mail address, users obtained extra in-game currency that could be used to buy items within the game or speed up gameplay. The FTC’s complaint alleges that the company failed to follow the steps required under the Rule related to the collection of children’s personal information.

In addition to the $300,000 civil penalty, under the terms of its settlement with the FTC, TinyCo is required to delete the information it collected from children under 13. The settlement will also require the company to comply with COPPA requirements in the future and submit a compliance report to the FTC in one year outlining its compliance with the order.

The Commission vote to authorize the staff to refer the complaints to the Department of Justice, and to approve the proposed stipulated orders, was 5-0. The DOJ filed the complaints and proposed stipulated orders on behalf of the Commission in U.S. District Court for the Northern District of California on Sept. 16, 2014. The proposed stipulated orders are subject to court approval.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when signed by the District Court judge.

SEC MAKES FRAUD CHARGES INVOLVING SMART-PHONE APP TECHNOLOGY

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 

Securities and Exchange Commission v. Heidi Ann Gamer, Gamer Economic Systems, LLC, and Gamer Media Partners Corp., Civil Action No. 1:14-cv-02650-ODE (N.D. Ga.)

SEC Charges Colorado Resident with Offering Fraud Involving Smart-Phone App Technology

On August 15, 2014, the Securities and Exchange Commission ("SEC") filed an action in federal court in Atlanta charging a Colorado Springs, Colorado resident and her two companies with running a $771,900 offering fraud targeting investors in various states. Victims of the scheme included, among others, individuals who participated in substance-abuse support programs.

Investors were told that funds raised would be used by the companies to acquire interactive technology licensing rights for products such as smart-phone applications, or "apps," that the companies planned to develop and market. False statements about contracts and licensing deals that did not exist also were used to solicit investors. Throughout the fraud, significant amounts of investor funds were diverted for such non-business expenses as casino gambling, vacation travel, and shopping.

Named in the Complaint are:

• Heidi Ann Gamer ("Gamer"), 41, a resident of Colorado Springs, Colorado;
   
• Gamer Economic Systems, LLC ("GES"), a Colorado limited liability company based in Colorado Springs, Colorado for which Gamer served as CEO; and
   
• Gamer Media Partners Corp. ("GMS"), a Georgia corporation based in Atlanta for which Gamer also served as CEO.

The Complaint alleges:

• Beginning in 2011, Gamer began soliciting individuals for investments in GES, telling them that funds raised would be used as operating capital. Gamer falsely told prospective investors that GES had secured licensing rights for certain products. After investors provided their funds, Gamer diverted sizeable portions of the monies raised for her personal expenses, including gambling in Las Vegas and a vacation in Mexico.
   
• In 2012, Gamer moved to Atlanta, where she created GMP and offered and sold GMP shares in exchange for investor funds which she again claimed would be used for company operating expenses. Gamer also told prospective investors that GMP had secured high-dollar contracts with a movie studio, a college and the Atlanta Falcons football team. No such finalized deals or funding existed. Gamer again diverted investor funds for her personal use, including her condominium rent, pet grooming, and to help send an acquaintance to a private California weight-loss resort. Ultimately, Gamer raised from investors approximately $400,500 through GES and $371,400 through GMP, respectively. Among those targeted by Gamer's scheme were friends and acquaintances, some of whom Gamer met through substance-abuse support programs.

The complaint alleges that Gamer, GES and GMP by virtue of their conduct, directly or indirectly, violated 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 seeks injunctive relief, disgorgement of ill-gotten gains with pre-judgment interest and penalties against each of the defendants.

The SEC's investigation was conducted by Brian M. Basinger with assistance from Stephen E. Donahue and Robert F. Schroeder in the Atlanta Regional Office. The Commission acknowledges the assistance and cooperation of the Massachusetts Securities Division.

NEW ZEALAND FISHING COMPANY FOUND GUILTY OF ENVIRONMENTAL AND OTHER CRIMES

FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, August 15, 2012
New Zealand Fishing Company Found Guilty in Washington, D.C., of Environmental Crimes and Obstruction of Justice
Chief Engineer Also Found Guilty of Charges

WASHINGTON –A federal jury in Washington, D.C., today returned guilty verdicts against Sanford Ltd., a New Zealand fishing company, on six counts of conspiracy, obstruction of justice, and violating the Act to Prevent Pollution from Ships (APPS). The jury also found a company employee guilty of two other charges.
　
The verdicts, following a two-week trial in the U.S. District Court for the District of Columbia, were announced by Assistant Attorney General Ignacia S. Moreno of the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney for the District of Columbia Ronald C. Machen Jr.
　
Judge Beryl A. Howell scheduled sentencing for Nov. 16, 2012. Sanford faces a maximum fine of up to $500,000 on each count, for a total potential penalty of $3.0 million. Sanford’s primary chief engineer, James Pogue, 52, faces up to up to 20 years for obstruction of justice and six years for knowingly failing to maintain an accurate oil record book.
Acc
ording to the government’s evidence, in July 2011, the U.S. Coast Guard conducted a Port State Control examination on the Fishing Vessel (F/V) San Nikunau, when the vessel entered port in Pago Pago, American Samoa. The examination revealed that the vessel had been making false entries and omissions in its oil record book that vessels are required to maintain accurately in order to account for their handling of oil waste generated by the vessel.
　
According to evidence presented at trial, Sanford operates the San Nikunau a vessel that routinely delivers tuna to a cannery in Pago Pago. Over the past five years, Sanford was paid over $24 million for tuna deliveries. Sanford was convicted of numerous charges, including conspiracy and causing the vessel to enter to the port of Pago Pago with a falsified oil record book that failed to accurately account for how the vessel was managing its bilge waste and for obstruction of justice for falsely stating in the oil record book that required pollution prevention equipment had been used when it had not. Sanford was also convicted of discharging machinery space bilge waste into the port of Pago Pago without using required pollution prevention equipment including the oil water separator.
　
Pogue, of Idaho, served as the chief engineer on the vessel between 2001 and 2010. Pogue was convicted of failing to maintain an oil record book for the vessel that accurately accounted for how the vessel was managing its bilge waste. In addition, Pogue was convicted of obstruction of justice for falsely stating in the oil record book that required pollution prevention equipment had been used when it had not.
　
Prior to the trial, Rolando Ong Vano, 51, of the Philippines, another chief engineer who worked on the vessel, pleaded guilty to charges in the case. He is to be sentenced Sept. 7, 2012.
　
"These verdicts hold a company and one of its chief engineers accountable for polluting the waters off American Samoa with oily waste, and then trying to cover up their acts," said U.S. Attorney Machen. "The prosecution demonstrates our commitment to enforcing environmental laws and protecting our precious natural resources."
　
This case was investigated by the U.S. Coast Guard and the Coast Guard Investigative Service. The case was prosecuted by Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Department of Justice and Assistant U.S. Attorney Frederick W. Yette of the U.S. Attorney's Office for the District of Columbia.