Penny Stock Pals Pocket $2.6 Million Through Sham Deals!

SEC v. Jon G. Fullenkamp, Scott R. Sand — U.S. Securities and Exchange Commission Litigation Release No. 26517, dated March 31, 2026.

The SEC charged Scott Sand and Jon Fullenkamp with a scheme to misappropriate millions from two penny stock companies. They allegedly used sham agreements with an entity secretly controlled by Fullenkamp to issue and sell company stock, pocketing $2.6 million.

In Plain English

Imagine two people secretly controlled two small companies. They made it look like these companies owed money to another company that one of them secretly owned. Then, they made the small companies give them lots of stock for free, pretending it was payment. They then sold this stock to others and kept the money, which was $2.6 million.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Assume Control Jon Fullenkamp and Scott Sand, without being formally named as officers, effectively took control of two penny stock companies, managing their compliance, finances, and investor relations from at least October 2020 through 2023.
2. Create a Secret Entity Fullenkamp secretly created and controlled a third entity, named 'Vendor 1,' specifically to facilitate the fraudulent scheme.
3. Fabricate Agreements Fullenkamp and Sand caused the two penny stock issuers to enter into 'sham agreements' with Vendor 1, making it appear as though the issuers owed Vendor 1 money or services.
4. Issue Fraudulent Stock Under the guise of these sham agreements, they caused the issuers to issue hundreds of thousands of shares of preferred stock to Vendor 1, which was secretly controlled by Fullenkamp.
5. Sell the Stock Fullenkamp and Sand then proceeded to sell some of these fraudulently issued preferred shares to third-party buyers.
6. Pocket the Proceeds They realized $2.6 million in proceeds from these sales, which they then funneled through bank accounts of entities they controlled and split between themselves.

The Enforcement Action

SEC charges Scott Sand and Jon Fullenkamp with a scheme to misappropriate millions from two penny stock issuers. The complaint alleges they caused the issuers to enter into sham agreements with an entity secretly controlled by Fullenkamp, leading to the issuance of preferred shares to that entity. Sand and Fullenkamp then sold these shares, realizing $2.6 million, which they split. The SEC seeks permanent injunctive relief, disgorgement, prejudgment interest, and civil penalties. Fullenkamp, without admitting guilt, consented to a judgment including permanent injunctions, officer/director and penny stock bars, surrender of shares, and disgorgement/interest/penalties to be determined. Fullenkamp also faces parallel criminal charges. The SEC investigation was conducted by Cecilia Connor, Matthew Homberger, and David Medway, supervised by Kingdon Kase and Scott A. Thompson. Litigation led by John Donnelly, supervised by Gregory R. Bockin.

Named in this action: Jon G. Fullenkamp, Scott R. Sand.

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