MANSFIELD — A Mansfield-based company has become the subject of a lawsuit for the second time in two years.
Medical Safety Solutions, which is incorporated in Nevada and headquartered at 87 Sawyer Parkway in the Lahm Airport industrial park, has been accused of securities fraud in an alleged investment scheme.
MSS is the manufacturer of the Sharps Terminator, a small machine used for destroying needles used by hospitals and clinics. The lawsuit, heard Tuesday in U.S. District Court in Chicago, alleges the firm falsely claimed the product has FDA approval. Without an OK from the FDA, the Sharps Terminator cannot be sold in the U.S.
Lead plaintiff Evolutions Enterprises, a Chicago-based investment firm, also claims the product is faulty and can cause sparks when coming into contact with needles.
The suit alleges MSS misrepresented the role of Mansfield resident Kenneth A. Jackson, who reportedly invented the product. The plaintiffs claim Jackson is the de facto leader of the firm.
Jackson was convicted of 117 counts of securities violations, theft, perjury and passing bad checks in Wayne County in 1994. In 1991, he was enjoined by the Securities and Exchange Commission from violating federal securities laws in a civil action. Neither Jackson nor his attorney could be reached for comment.
In June of last year the company was sued by 16 plaintiffs — 15 in Illinois and one in Highland Heights, Ohio — who made essentially the same allegations included in the current lawsuit. That case was settled out of court.
In addition to Jackson and his company, defendants in the new suit are CEO William Schureck, of Lexington; board chairman and secretary Marco Burnette, of Barberton; treasurer Richard Van Horn, of Reynoldsburg; and Albert S. Miller, a board member and shareholder from Dothan, Ala.
Evolutions Enterprises claims up to 500 investors, including about 100 in Ohio, who have bought up to $9 million worth of stock in MSS, which would be worthless if the Sharps Terminator is not on the market.
The company’s attorney, Vincent Rakestraw of Columbus, said Jackson is only the inventor of the Sharps Terminator. Company records name him as the director of research and development.
But plaintiffs allege MSS mispresented Jackson’s role in the firm “when in fact he was responsible for making all substantive decisions concerning MSS and the Sharps Terminator,” according to the complaint.
Sale of stock in the company was temporarily halted Tuesday. Rakestraw, who was not available for comment Wednesday, reportedly said most of its shares already had been sold.
But Michael Tomlinson, the plaintiffs’ Chicago-based attorney, had a different interpretation of events.
“They were enjoined from selling stock in federal court and in fact they argued against it,” Tomlinson said.