Verify Smart Corp. (VSMR)

[Bandr]

More history on DAN SCAMMELL. A TRUE CROOK THAT SHOULD BE IN JAIL. DO NOT BUY INTO HIS SCAM COMPANIES.

http://www2.canada.com/vancouversun/columnists/story.html?id=be100ce1-34a9-4df7-8155-7380a5f93a58&p=1

Seed stock deals risky, if not 'outright scams'
David Baines, Vancouver Sun
Published: Tuesday, February 10, 2009
It's been a long time since I talked with Vancouver stock promoter Dan Scammell. Twenty-three years, in fact. You would think he would be glad to hear from me, but he wasn't.
"Why should I talk to you?" he snarled. "You don't care about the facts. You're going to write whatever you want."
I had wanted to talk about his latest deal, VerifySmart Corp., which is developing software to prevent credit card fraud.

The technology enables a credit-card holder to register his card, so whenever an item is charged to his card, he gets a call on his cellphone providing details of the purchase and asking him to accept or decline the transaction using his confidential PIN or password.
Scammell is the company's president and chief executive officer. To bring the product to market, he is selling shares privately to investors under exemptions from prospectus and registration requirements.
Such "seed stock" deals are risky business. Although they give investors the opportunity to get in on the "ground floor," the company may never get off the ground. And because the company is still private, it is not legally required to provide the sort of information that public companies must -- such as quarterly financial statements. In many cases, the company wilts and dies, leaving investors wondering what happened to their money.
"Year in and year out, they are our leading source of complaints and investigations," says Lang Evans, head of enforcement for the B.C. Securities Commission.
"Tens of millions of dollars are lost each year in B.C. alone. At best, these are very high-risk deals; at worst, they are outright scams."
Scammell's biography, posted on the company's website, boasts that: "Dan has 20 years of experience with public companies, and has a vast experience raising capital for them, especially in the crucial stages of initial and bridge financing."
It's quite true he has had experience with public companies, but most have ended badly for investors.
I first met Scammell in 1986 when he was promoting a Vancouver Stock Exchange company called Caneco-Audio Publishers Inc., which proposed to acquire a device called PockeTalk, a "fully-patented Walkman-sized tape recorder that can play a full novel on one 16-hour tape instead of eight two-hour tapes."
The stock soared from three cents to a high of $2.70, then the deal was cancelled and the stock tanked.
Two years later, Scammell was promoting a VSE company called Capital Reserve Inc. for West Vancouver promoter Jerome Rak. This time the gadget was a machine that could test drug and alcohol levels by electronically measuring eye movements.
Scammell helped in Rak's office, touting unsuspecting members of the public. His name appeared on promotional literature, he was granted stock options, and he was appointed to the board (although it's not clear his appointment was ever ratified.)
The stock rose to $2.85 in heavy volume, allowing Rak to dump a million shares into the market. The commission eventually intervened and suspended him from the market for eight years. Five others were also suspended for varying periods. Scammell was not accused of any wrongdoing.
When I talked to Scammell last week, he denied he played any part in the deal. "I was not involved with Capital Reserve," he stated unequivocally, which struck me as rather curious since he was named six times in the commission decision.
Four years later -- in 1992 -- Scammell dove into another VSE snake pit, Axagon Resources Ltd.
Axagon had acquired rights to a non-corrosive, non-toxic salt substitute to melt snow and ice from two Pennsylvania promoters, Jay and Steven Greenwald. Once again, Scammell provided investor relations services, this time through a private company called Seahorse Holdings.
The stock soared to more than $7 after the company announced sales had jumped to $7.9 million and earnings to $2.4 million. But it was later revealed the sales were bogus, and Steven Greenwald had two prior criminal convictions.
The stock collapsed and the commission held a hearing. Greenwald was suspended for 20 years and his brother for 15 years. Once again, Scammell was not accused of any wrongdoing.
When I raised these matters with Scammell, he accused me of dredging up ancient history. He said he hasn't been involved in any public companies since then.
Indeed, I could find no evidence that Scammell has been involved in any public companies, either here or in the United States, since the Capital Reserve debacle. But that raises the question, what is he referring to when he invokes his "20 years of experience with public companies," and his "vast experience raising capital for them"? All I can see is a few years of bottom-feeding on the VSE.
Scammell says that, since the Capital Reserve fiasco, he has only been involved in private companies. When I asked whether any have made money, he replied, "Of course," but declined to name any.
"Why should I bring you up to date? You don't do your homework," he huffed, apparently not realizing I was trying to do my homework.
With regard to VerifySmart, Scammell has been churning out a series of boosterish news releases that suggest the company is on the brink of generating massive cash flow.
On Nov. 6, he announced it had "signed the high-volume merchant, e-Processor PLC.... Revenues are anticipated to be $200 million by the end of the 2009 fiscal year." He said the company's share will start at five per cent ($10 million per year) and increase to 10 per cent ($20 million per year).
On Nov. 17, he hinted at even greater riches: "By bringing several sizable merchants on-stream over the next 30 days, we are well on our way to carving out a significant share of the $8.5-trillion commerce market."
Featured prominently on Verify-Smart's website is George Lois, the company's vice-president of marketing and business development.
Lois is an award-winning art and advertising director, best known for his brilliant covers for Esquire magazine from 1962 to 1972. He also created many successful advertising campaigns for companies such as MTV, Jiffy Lube and Tommy Hilfiger.
"He is capable of taking $1 million and turning it into $10 million worth of advertising," Scammell said in a release. "George actually said in VSC's case, it is more like a ratio of $1 million to $20 million."
But at age 77, Lois may not be as effective as he once was. In 2001, he became chairman of a Nevada-registered company called Thinka Weight-loss Corp., a former Vancouver bulletin board shell company that planned to market a "liquid, low-carbohydrate, high-protein, weight-loss product."
By late 2002, Thinka hadn't generated a single dollar of sales. Lois resigned, and the company acquired a California insurance company that had developed "a unique proprietary emergency travel assistance benefits package."