SAN DIEGO, Feb. 19, 2013 (GLOBE NEWSWIRE) -- A private investor and former shareholder of Citadel EFT, Inc. ("Citadel") (OTCQB:CDFT), has filed a civil action for Fraud, Negligent Misrepresentation, violation of California Corporations Code Section 25400, and violations of the California Business and Professions Codes 17200 (Unfair Business Practices) and 17500 (False Advertising) against the Company, its CEO, Gary DeRoos, Attorney Diane Dalmy, BuzzBahn, LLC and Nancy Figueiredo, a principal of BuzzBahn, LLC. The Complaint was filed by George Sharp in the San Diego County Division of California Superior Court (Case No. . 37-2013-00034768-CU-FR-CTL) on February 13, 2013.

In his complaint, Mr. Sharp states that the Defendants were deliberately deceptive when issuing false and misleading press releases for the singular purpose of selling insider-owned stock into the marketplace. Mr. Sharp also details an elaborate scheme to illegally issue Form S-8 stock to BuzzBahn, Inc., through its agent, Nancy Figueiredo, as payment for stock promotion services. Mr. Sharp alleges that BuzzBahn was retained in order to assist in the creation of a false marketplace for Citadel stock. Indeed, an email promotion campaign of Citadel began on the very day that the issuance of the Form S-8 stock was filed with the SEC.

According to the United States Securities and Exchange Commission, Form S-8 stock, which is immediately free-trading. may be issued to consultants, provided that,

"the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the registrant's securities."

Attorney Diane Dalmy, who acted as Citadel's corporate counsel at the time, issued an opinion letter which was filed concurrently with the Form S-8. In that letter, she stated that, in her opinion, the Form S-8 was properly filed and that, "the issuance of the Shares will not be a violation of any prohibitions of the rules and regulations pertaining to S-8." Ms. Dalmy is well known for working on reverse mergers and writing opinion letters on behalf of dozens of public companies traded on the OTC Markets, which have been the subject of Pump & Dump schemes. Since September 25, 2009, Dalmy has been prohibited from providing Attorney letters or legal opinions to the OTC Markets.

Mr. Sharp also expressed concerns for future purchasers of Citadel shares, as participants in ruthless Pump & Dump schemes account for hundreds of millions of dollars in investor losses each year.

Mr. Sharp notes that while Citadel was initially provided notice of this litigation on February 13, 2013, and responded to him by email, the company made no effort to notify its shareholders.

Mr. Sharp holds no interest in Citadel shares. Follow this lawsuit at www.sharp-v-cdft.info. Get instant updates by following Mr. Sharp at www.twitter.com/goniffs.