The Securities and Exchange Commission filed settled charges on October 19, 2026, against two former leaders of Violet Defense Group, a now defunct Florida photonics company. The case concerns a $13 million offering that left 88 investors holding shares in a business whose projections had already collapsed.
What happened
The SEC’s complaint, filed in the U.S. District Court for the Middle District of Florida, names Terrance P. Berland, the former chief executive and minority owner, and David Michael Scalzo, the former director and majority owner. From at least April 2021 through November 2021, the two raised approximately $13 million from 88 investors through a Class B share offering.
The commission announced the settlement in litigation release 26675 on October 20, 2026. Both men consented to judgments without admitting the allegations, subject to court approval.
Key facts in the Violet Defense SEC case
| Item | Detail |
|---|---|
| Company | Violet Defense Group, Inc., a now defunct Florida photonics company |
| Defendants | Terrance P. Berland, former CEO, and David Michael Scalzo, former director and majority owner |
| Offering | Class B shares, April 2021 through November 2021 |
| Amount raised | Approximately $13 million |
| Investors | 88 investors |
| Claimed 2021 revenue projection | $15 million to $18 million |
| Actual condition by August 2021 | Sales and royalty revenues had declined significantly |
| Diversion of funds | More than 40 percent committed to a NASCAR team sponsorship |
| Civil penalties | $100,000 each |
| Case reference | No. 26-cv-02430 (M.D. Fla.), filed October 19, 2026 |
The revenue projections investors never saw corrected
Berland and Scalzo told investors the company was on track to reach $15 million to $18 million in revenues in 2021, the complaint alleges. They also said 10 percent of the money raised would fund marketing and branding for the company’s largest subsidiary.
By August 2021, the SEC says, both men should have known those projections were inaccurate. Sales and royalty revenues had declined significantly by then. Neither disclosed or corrected the picture for the investors still buying in.
The NASCAR commitment
The most striking allegation involves where the money actually went. By the end of August 2021, more than 40 percent of investor funds were committed to a NASCAR team sponsorship, according to the complaint.
Investors had been told their money would build a photonics business. Instead, a large slice went to stock car racing before the revenue engine ever materialized.
The false assurances in purchase agreements
Between August and October 2021, securities purchase agreements handed to investors contained false assurances, the SEC alleges. The documents stated that nothing had occurred that could reasonably be expected to result in a material adverse effect on the company’s financial condition.
The proposed judgments permanently enjoin both men from violating Section 17(a)(2) of the Securities Act of 1933 and order each to pay a $100,000 civil penalty.
Red flags for private placement investors
- Projections are opinions, not facts. Ask what data supports a revenue forecast and how current it is.
- Use-of-proceeds language deserves tracking. Money committed to sponsorships, marketing stunts, or unrelated ventures is money not building the business.
- “No material adverse effect” statements expire fast. In a young company, conditions can change within weeks.
- Minority and majority owners share the same duty. Ownership stakes do not excuse misleading statements to buyers.
What investors should do now
Anyone who bought Violet Defense Class B shares should collect their purchase agreements, pitch materials, and any updates received from the company. Private placement claims carry their own deadlines, and the company is now defunct, which complicates recovery. Investors can also check any offering through the SEC’s EDGAR database and Investor.gov before committing funds.
Frequently asked questions
What was Violet Defense Group?
Violet Defense Group was a Florida photonics company that sold UV disinfection technology. It raised approximately $13 million from 88 investors in 2021 before winding down, and the SEC charged its former CEO and majority owner with fraud in October 2026.
How much do Berland and Scalzo pay?
Each consented to a $100,000 civil penalty plus permanent injunctions under Section 17(a)(2) of the Securities Act, subject to court approval.
Can affected investors recover losses?
The SEC’s penalties go to the government. Investors who bought shares may have separate claims and can consult a securities attorney about their options.
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.
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This article draws on the SEC’s public litigation release 26675. Complaint allegations are not findings of fact, and consent judgments are not admissions of wrongdoing. The proposed judgments remain subject to court approval. This article is news reporting, not legal advice.
