Mervin Barclay Davis Gets 5 Years for Securities Fraud

Mervin Barclay Davis, 69, of Malibu, has been sentenced to 60 months in federal prison for orchestrating a sprawling securities fraud scheme that netted over $1.6 million in illegal profits and triggered a tax loss to the IRS. The former businessman, already in federal custody since 2013, was sentenced yesterday by U.S. District Judge John F. Walter in Los Angeles.

Davis pleaded guilty in 2014 to one count of conspiracy to sell unregistered securities and one count of subscribing to a false tax return. As part of the sentence, Judge Walter ordered restitution of $225,000 to defrauded investors and $466,500 to the Internal Revenue Service. The scheme ran from 2005 through 2007 and revolved around Clearvision, Inc., a company Davis was affiliated with that claimed to provide PR and promotional video services to small and mid-sized firms.

Through Clearvision, Davis accepted unregistered stock from corporate clients as payment. He targeted companies like Powerlock International and International Telecommunications, Inc. (ITLS), offering to take them public via shell company mergers. In exchange, he demanded large blocks of stock—often exceeding 10% of outstanding shares. To dodge disclosure rules, Davis funneled shares into nominee accounts he secretly controlled, then sold them off without registration.

The unregistered sales generated approximately $779,914 in illicit gains from ITLS stock alone. Davis and his son further manipulated the market for Powerlock stock, artificially inflating its price and volume to rake in another $883,276. These crimes were masked by layers of corporate shell games and covert financial routing designed to hide Davis’s central role.

Davis falsely reported just $92,000 in income for 2006, directly defrauding the IRS. “This fraud scheme was extremely complicated in that it involved shell companies, nominee accounts and unregistered stock from multiple companies, all of which were used to conceal the defendant’s participation in the crime,” said U.S. Attorney Eileen M. Decker. “Despite the sophistication of this massive fraud scheme, law enforcement unraveled the intricate details in order to hold the defendant accountable.”

“Yesterday’s sentencing demonstrates how federal law enforcement will work together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain,” said IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. The case was investigated by the FBI and IRS Criminal Investigation, with support from FINRA’s Criminal Prosecution Assistance Group.