ORLANDO (CN) - GMC Holding Corp. and its CEO Richard Brace defrauded investors of more than $2 million by falsely claiming GMC had created "a motor technology device capable of generating unlimited energy" that it was negotiating to sell for "hundreds of millions of dollars," the SEC claims in Federal Court. The "illegal unregistered stock" they sold on these bogus claims "provided GMC's only source of revenue," the SEC says.
"The press releases in 2005 and 2006 falsely claimed tests on the motor device showed it was able to produce more energy than it consumed," the SEC claims. The defendants "also made up alleged negotiations with unnamed S&P 500 corporations."
Brace, 64, lives in Casselberry, Fla. In 1998, "GMC claimed to be in the business of producing home shopping television programming," the SEC says. From 2000 to 2004, it claimed to be acquiring "Internet companies in Asia and prepaid calling card companies in Florida."
The SEC complaint continues: "GMC reinvented itself again in November 2004, announcing it was developing high-efficiency generators based on its proprietary 'Rare Earth Magnetic Amplification Technology' ('REMAT') though which it had 'achieved a major revolutionary breakthrough in solving the world's energy needs.'"
And so on. Brace allegedly wrote the misleading press releases for all these wonders.
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