U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19439 / October 20, 2005

Accounting and Auditing Enforcement
Release No. 2339 / October 20, 2005

Securities and Exchange Commission v. Scott Gershon, Paul Cifaldi, Neil Silver and Robert Davis, Civil Action No. 1:05 CV 02051 (D.D.C.) (RWR) (filed October 19, 2005).

In the Matter of Intercallnet, Inc., Securities Exchange Act of 1934 Release No. 52641/October 19, 2005.

SEC SUES FORMER OFFICERS AND PROMOTERS OF INTERCALLNET, INC. FOR FRAUD

The Securities and Exchange Commission today announced that on October 19, 2005 it filed a settled civil action in federal district court against Scott Gershon, the founder and former Chief Executive Officer of Intercallnet, Inc.; Paul Cifaldi, the company's former Chief Operating Officer; and stock promoters Neil Silver and Robert Davis, for engaging in a fraudulent scheme to sell unregistered Intercallnet securities.

SEC COMPLAINT

The Commission's complaint alleges that from March through December 2000, Gershon, Cifaldi, Silver and Davis participated in the fraudulent in the following manner: Silver and Davis falsely represented themselves as licensed brokers and sold the stock in exchange for undisclosed commissions from Gershon, disguised on the company's books as payments for the acquisition of assets. Invoices from fictitious companies Silver and Davis controlled were then created and back-dated to reflect the purported purchases. Cifaldi marked the fraudulent invoices "approved" for payment. Intercallnet's periodic reports filed with the Commission from April 2001 through November 2002 included financial statements which falsely characterized the stock promotion commissions as payments for assets.

SEC SETTLEMENT

• Gershon, without admitting or denying the allegations in the complaint, consented to the entry of a final judgment: (1) permanently enjoining him from violating Sections 5 and 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B) and 15(a) of the Exchange Act and Rules 12b 20, 13a-1, and 13a-13 thereunder; (2) permanently barring him from serving as an officer or director of any public company; and (3) ordering him to pay disgorgement of $66,000 plus pre-judgment interest of $11,819.95 and a civil money penalty of $100,000.
   
• Cifaldi, without admitting or denying the allegations in the complaint, consented to the entry of a final judgment: (1) permanently enjoining him from violating Sections 5 and 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B) and 15(a) of the Exchange Act and Rules 12b 20, 13a-1, and 13a-13 thereunder; (2) permanently barring him from serving as an officer or director of any public company; and (3) ordering him to pay disgorgement of $45,736 plus pre-judgment interest of $8,190.86. Based on Cifaldi's Sworn Statement of Financial Condition and other documentation, the Commission waived the payment of disgorgement and prejudgment interest and did not seek a penalty.
   
• Silver, without admitting or denying the allegations in the complaint, consented to the entry of a final judgment: (1) permanently enjoining him from violating Sections 5 and 17(a) of the Securities Act and Sections 10(b) and 15(a) of the Exchange Act and Exchange Act Rule 10b-5; and (2) ordering him to pay disgorgement of $831,971, plus pre-judgment interest of $153,051.28 and a civil money penalty of $50,000.
   
• Davis, without admitting or denying the allegations in the complaint, consented to the entry of a final judgment: (1) permanently enjoining him from violating Sections 5 and 17(a) of the Securities Act and Sections 10(b) and 15(a) of the Exchange Act and Exchange Act Rule 10b-5; and (2) ordering him to pay disgorgement of $183,367, plus pre-judgment interest of $32,839.19 and a civil money penalty of $50,000.
   

In a related settled administrative proceeding, Silver and Davis, consented, without admitting or denying the Commission's findings, to entry of a Commission order pursuant to Exchange Act Section 15(b)(6) permanently barring each from associating with a broker or dealer. The Commission's Order, to be issued upon entry of the permanent injunction by the federal district court, finds that Silver and Davis were not licensed to sell securities and acted as unregistered broker-dealers in promoting the sale of unregistered Intercallnet securities.

In a related matter, on October 19, 2005, the Commission issued an administrative order pursuant to Exchange Act Section 12(j) instituting an administrative proceeding to determine whether or not the registration of Intercallnet's securities should be revoked or suspended for failure to file required periodic reports with the Commission.

SEC Complaint in this matter

http://www.sec.gov/litigation/litreleases/lr19439.htm