Debra BorchardtThe Securities and Exchange Commission (SEC) charged Colombian resident Juan Campo, the former CEO of View Systems, Inc., with securities fraud on July 26. The SEC alleged that Campo (also known as John Campo) created the false impression that Colorado-based View Systems was actively engaged in two potentially lucrative lines of business, temperature screening for Covid-19 and cannabis. In addition to that the SEC claimed that Campo included a fake audit report in the SEC filings.
The SEC complaint stated that between July 2019 and July 2022, Campo claimed that View Systems had acquired Sannabis S. A.S., a Colombian cannabis company when Campo knew that View Systems had not, and never did, complete this acquisition.
View Systems
View Systems was a Colorado company but had its base in Maryland and used the ticker symbol VSYM until the SEC revoked its registration for not filing financial statements. The company started in 1999 with a product that could detect concealed weapons called ViewScan. However, by 2016 it had stopped manufacturing any products and by 2018 had licensed its View Scan to a third party. In July 2019, Campo joined View Systems as President and CEO even though it had virtually no revenue-generating business.
View Systems’ 2019 10-K states that its total revenue for 2019 was just $1,400. View Systems’ annual report on Form 10-K for 2020 still only claimed total revenue of less than $3,000 for 2020.
The SEC complaint states that in July 2019, View Systems issued a press release saying it was going to buy a Colombian company founded and co-owned by Campo called Sannabis, S.A.S. View Systems claimed Sannabis was a “Medical Marijuana Pioneer” that had purportedly obtained “medical marijuana licenses for seed propagation, cultivation, transformation, and export.”
False statements
The SEC says that Campo made numerous false statements about the acquisition in press releases, Twitter (now X) posts and at least one SEC filing. Campo also claimed that Sannabis was growing cannabis when it wasn’t. In reality, the SEC claimed that Sannabis’ business was limited to making and selling cosmetics and creams made from hemp seed oil. Sannabis had applied for licenses from the government of Colombia that would have allowed it to grow cannabis, but it did not obtain the licenses until at least 2021.
Another false claim that Campo pushed was that Sannabis had a distribution agreement with a cannabis licensee in Uruguay.
Even though Campo was admitting in some SEC filings that the acquisition never closed, he was saying the opposite in press releases. As the company issued these press releases, the penny stock jumped in price. It was aided in the quest by a website called EmergingGrowth.com and PennyStockDream.com that published articles touting the press releases and acquisition plans.
Fake audit
View Systems was delinquent in filing its financial statements with the SEC which required audited results. Campo hired an auditor, but that person never completed the auditing according to SEC testimony. The Auditor refused to complete the work until he was paid. The SEC claims that Campo asked for unaudited financial statements from the auditor, who provided them despite not giving consent for the information to be used in a filing. Campo ignored this and filed the statements as audited returns.
The filing also contained a fake audit report, purportedly by an independent auditor said the SEC. The complaint stated, “This fake audit report was titled “Report of Independent Registered Public Accounting Firm,” and falsely stated ‘[w]e have audited the accompanying balance sheets of View Systems, Inc. as of December 31, 2020.'”
The complaint states that the unnamed audit firm resigned in August 2022.
Punishment
The SEC wants to bar Campo from serving as an officer or director of a publicly traded company and is seeking civil penalties. The SEC also wants to bar Campo from participating in the offering of any penny stock, including by engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock
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