The Securities and Exchange Commission filed settled fraud charges on October 19, 2026 against Terrance P. Berland and David Michael Scalzo, former executives of the now defunct Florida photonics company Violet Defense Group, Inc. Regulators say the two men raised roughly $13 million from 88 investors while hiding a NASCAR sponsorship that consumed more than 40 percent of the offering proceeds.
What happened
Berland served as chief executive officer and minority owner of Violet Defense Group, a company that sold ultraviolet disinfection technology and ultraviolet agricultural lighting. Scalzo was a director and the majority owner. The SEC complaint, filed in the U.S. District Court for the Middle District of Florida, accuses both men of negligent misrepresentations during a 2021 securities offering.
From at least April 2021 through November 2021, the executives raised approximately $13 million from 88 investors through the sale of Class B shares. Investors were told the company was on track to reach $15 million to $18 million in revenue during 2021. According to the complaint, that projection was already collapsing while the money was still coming in.
Key facts in the SEC case against Berland and Scalzo
| Detail | Information |
|---|---|
| Court and case number | M.D. Fla., No. 26-cv-02430 |
| Date filed | October 19, 2026 |
| Defendants | Terrance P. Berland and David Michael Scalzo |
| Amount raised | Approximately $13 million |
| Investors | 88 |
| Offering period | April 2021 through November 2021 |
| Alleged revenue projection | $15 million to $18 million for 2021 |
| NASCAR commitment | More than 40 percent of investor funds by late August 2021 |
| Proposed penalty per defendant | $100,000 civil penalty |
How investor money was actually used
The complaint describes a wide gap between the sales pitch and the company books. Berland and Scalzo told investors that 10 percent of the money raised would support marketing and branding for the company’s largest subsidiary. Securities purchase agreements circulated between August and October 2021 also carried assurances that nothing had occurred which could reasonably be expected to produce a material adverse effect on the business.
The SEC alleges both men should have known better by August 2021. Sales and royalty revenues had declined significantly, which made the revenue projections untenable. By the end of that month, more than 40 percent of investor funds were committed to a NASCAR team sponsorship. None of that information reached the investors who kept buying shares.
Red flags investors should recognize
Private placements live and die on projections, and this case shows how stale numbers can keep a raise alive long after the facts change. The pattern regulators describe contains several warning signs that repeat across offering fraud cases.
- Revenue projections presented without audited financial statements to back them up.
- Use-of-proceeds promises that are never verified against actual spending.
- Blanket no-material-adverse-change language in purchase agreements.
- A single large marketing commitment quietly absorbing a large share of the raise.
Investors who see these features in a private offering can slow the process down and request documentation before sending funds. A legitimate issuer rarely objects to written questions.
The settlement terms
Without admitting or denying the allegations, Berland and Scalzo consented to the entry of final judgments, subject to court approval. Each defendant would be permanently enjoined from violating Section 17(a)(2) of the Securities Act of 1933 and would pay a civil penalty of $100,000. The SEC’s Miami Regional Office conducted the investigation.
Violet Defense Group no longer operates. The company board voted in 2024 to wind down operations, and the business was later administratively dissolved, according to the complaint. Investment firms also filed private lawsuits beginning in late 2022 alleging self-dealing and corporate waste at the company and at Kirenaga Partners, a venture firm tied to Scalzo.
What Violet Defense investors can do now
Class B investors who lost money still have options even though the company is gone. Claims against the individual executives, arbitration against any brokerage firm that recommended the investment, and recovery through court-supervised processes may all be available depending on the facts. If you invested in Violet Defense Group, preserve your account statements and offering documents now.
Haselkorn & Thibaut fights for investor recovery
Haselkorn & Thibaut is a securities law firm founded by former Wall Street defense attorneys who shifted their practice to represent investors. The firm has recovered over $520 million for clients in securities matters and maintains a 98 percent success rate in resolved nontraded REIT cases. Attorneys are AV Preeminent rated through Martindale-Hubbell, designated as Super Lawyers, and hold a 5.0-star client review average. The firm operates on a contingency basis; no recovery, no fee.
Contact Haselkorn & Thibaut today
Time matters in fraud recovery cases, and the earliest claims often move first. The firm offers a free case evaluation to review your losses, examine your account history, and explain your options under arbitration or settlement.
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