Grifco Inc (GFCI)

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Plaintiff,

v.

DARREL T. USELTON and JACK E. USELTON, Defendants.
Intelligent Sports, Inc. (Pink Sheets: IGTS/IGTP)

Grifco International, Inc. (Pink Sheets: GFCI)

71. Grifco International, Inc. ("Grifco") is a Nevada-based corporation that purports to be an international provider of oil and gas services equipment.

72. On or about September 20, 2005, Grifco issued 220,000 shares of common stock to the Useltons as part of a Rule 504 offering. These unregistered shares were issued without restrictive legends. On or about October 5, 2005, the Useltons transferred the shares into two brokerage accounts that they controlled.

73. Between approximately October 28 and November 3, 2005, the Useltons orchestrated a spam email campaign touting Grifco. The spam emails, which contained no disclaimers, indicated that "Rocking Stock Times Selects: GFCI" as a "real winner" and that "nsiders tell us breaking news is expected that can make this company go very high immediately." The principal spammer charged the Useltons at least $54,896 for spamming Grifco.

74. During the Grifco spamming campaign, the Useltons sold all 220,000 shares of Grifco stock, realizing proceeds of approximately $71,866. Grifco stock, which appears to have been the subject of other market manipulations, traded between $0.30 and $0.36 during the spamming campaign on average daily volume of approximately 525,000 shares.

75. After the spamming campaign ended, Grifco stock drifted downward, trading at $0.07 by year-end 2006.