Bannon, Badolato and Otto… in 2005…. formed a company called “Bio-Flavorance Technologies and Research Inc,” which owned rights to patents for the flavors and fragrance industry, according to its press release.
In January 2006, the company was acquired by Industrial Biotech Corporation, or IBOT, via an asset purchase agreement, and issued a press release. IBOT had been founded four months earlier, and was registered to the same Sarasota office suite that Bannon and his partners had listed as their address in the Bio-Flavorance filing. Following the acquisition, Badolato became chairman and president of IBOT. Otto and Van Siclen joined its board.
IBOT was soon rocked by scandal. In 2008, Curshen and a Florida-based stock promoter were arrested after attempting to enlist an undercover FBI agent posing as a stock broker in a scheme to manipulate IBOT’s stock. The fraud, called a pump-and-dump, involved artificially raising the price of IBOT’s stock by faking organic trading activity and bribing brokers to buy the stock for wealthy clients at inflated prices. Curshen and the stock promoter were convicted of fraud and sentenced to prison terms.
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Generally, pump-and-dump schemes require the cooperation of whoever controls the trading shares of the company targeted. Badolato was never charged, but in court filings both the government and Curshen describe him as a co-conspirator and the primary beneficiary of the scheme.