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Submit Comments on File No. S7-19-07 Amendments to Regulation SHO
http://www.sec.gov/cgi-bin/ruling-comments?ruling=s71907&rule_path=/comments/s7-19-07&file_n...
Judge orders receiver for Universal Express
South Florida Business Journal - 9:00 AM EDT Wednesday, September 5, 2007by Brian Bandell
New York Federal Court Judge Gerard Lynch ordered a receiver to take over Boca Raton-based Universal Express, which would end Richard Altomare's tenure as chairman and chief executive officer.
The Aug. 31 ruling also told co-defendants Altomare and general counsel Chris Gunderson to report for an Oct. 12 hearing, during which they must show cause why they should not be held in contempt for disobeying earlier rulings and jailed to compel compliance.
Universal Express (OTCBB: USXP) issued a press release vowing to file a motion to stay Lynch's ruling in appeals court. The company appealed the judge's earlier ruling in the civil case, brought by the Securities and Exchange Commission, that it sold unregistered securities and issued false and misleading press releases. That resulted in fines against the executives and the company totaling $25.7 million, and injunctions demanding that the company stop the violations, Altomare and Gunderson not participate in penny stock offerings, and that Altomare resign. The SEC argued that the defendants violated all of these orders - and Lynch agreed.
"The repeated actions of defendants demonstrate not only defendants' clear lack of respect for the orders of this court and federal securities laws, but also the necessity of this court's judgments remaining in full force pending appeal," Lynch wrote in his ruling.
On Aug. 3, Lynch denied Universal Express' motion to stay the penalties pending appeal.
Boca Raton Attorney Jim Sallah, who used to work in enforcement for the SEC, said the next step is Lynch will name the receiver - most likely from a pool of people recommended by the SEC. If the receiver is named before the appeals court rules to stay, the receiver can withdraw the appeal on behalf of the company, Sallah said.
The receiver can forcibly take control of the company and dismiss any employees, but the receiver doesn't have to shut the company down. Sometimes receivers have kept companies going for more than a year, Sallah said.
Altomare said in a release that Lynch's ruling should be overturned in favor of a jury trial on the issue of naked short selling - which is when investors short sell stocks they don't own or borrow. The company believes the SEC is persecuting it because it was outspoken against it.
"The actual legal merits of this case do not necessitate this draconian action," Altomare said. "It will be the responsibility of a full hearing, not one misinformed appointee, to determine the future of our 23-year-old company."
Altomare has led Universal Express since taking it over during its 1994 bankruptcy. He launched its luggage shipping service, acquired Michael Jackson family memorabilia to auction and bought a small air charter service in Boca Raton. The company has also been involved in frequent litigation, including pending lawsuits against its landlord and an advertising agency, which countersued.
Lynch's order states that he has "little confidence" in Altomare's ability to run Universal Express or find his replacement. Because the company's $21 million share of the judgment greatly exceeds its assets, a receiver appointed by the court should take over to bring it into SEC compliance and determine the company's financial state, Lynch ruled.
Motion for contempt
Although the judge's order supports finding the defendants in contempt, he gave them "one last opportunity" to follow his orders or rebut the SEC's case.
The judge agreed with the SEC's findings that Universal Express issued 15.5 billion unregistered shares after his April 2 ruling that the company illegally issued 500 million unregistered shares. Altomare and Gunderson participated in those offers.
"Their active participation in the issuance of billions of unregistered shares of penny stock demonstrates that their violation of the court order was due not to lack of reasonable diligence or even recklessness, but to sheer willfulness," Lynch wrote.
The judge also said that Universal Express continue to make false statements concerning litigation and its business in its SEC filings, none of the defendants have paid the fines and that Altomare violated his order by refusing to resign.
Universal Express shares traded at .04 of a cent on Sept. 4. No 52-week high/low information was available.
Puppy, question about entg 45 million shares.
1. Even if distributed what would have happened to odd lots?
2. Wasnt the distribution created so Casavant could clean up when he started his own transfer agentcy where he would have got $15 dollars from each shareholder when they got their shares or if the company paid the $15 transfer agent fee.
quick math
60,000 shareholders
X $15
--------------
$900,000
Las Vegas Party Pics
http://web.archive.org/web/20050421033142/www.cmkxpics.com/vegas/
takes time to load. Be patient
The Deli Dog House was a special treat for all the CMKX guests who attended the race.
“The Jim Dunn Racing team wants to extend our thanks to Marco and Betty Glisson of the Deli Dog House from Janesville, Wisconsin for supplying our team and the CMKX shareholders with food and drinks throughout the weekend,” said Jim Dunn. “Hopefully we can welcome them again when we return to Route 66 Raceway in the fall.”
“The Deli Dog House was a welcomed addition to our Got CMKX? pit area in Chicago,” said Urban Casavant. “I'd like to personally thank Marco and Betty and their entire staff for helping to make our weekend a success.”
http://www.nhra.com/apcm/APCMviewer_sp.asp?a=5410&print=yes
Jim Dunn Racing, CMKXtreme and The Deli Dog House have teamed up to provide a special treat to CMKX shareholders at the NHRA Drag Race in Chicago, Illinois. The Deli Dog House is going to provide free Chicago Style Hot Dog's Saturday & Sunday to CMKX shareholders at the Jim Dunn Racing/Got CMKX? Funny Car Hospitality Area located in the pit area for CMKXtreme Team. http://www.delidoghouse.com/nhrachicago.htm
GALAXY MINERALS, INC. : ORDER MAKING FINDINGS AND
: REVOKING REGISTRATION BY : DEFAULT
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 56326/August 28, 2007
ADMINISTRATIVE PROCEEDING
File No. 3-12700
___________________________________
In the Matter of :
:
GALAXY MINERALS, INC. : ORDER MAKING FINDINGS AND
: REVOKING REGISTRATION BY : DEFAULT
___________________________________
The Securities and Exchange Commission (Commission) issued its Order Instituting Proceedings (OIP) on July 18, 2007, pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Exchange Act). Galaxy Minerals, Inc. (Galaxy), received notice of the OIP on August 2, 2007, at Lake Villa, Illinois, in a manner that complies with Rule 141(a)(2)(ii) of the Commission’s Rules of Practice. Galaxy did not file an Answer and the time for filing has expired.
I then ordered Galaxy to show cause, by August 24, 2007, why it should not be held in default and have the registration of its securities revoked. To date, Galaxy has not responded to the Show Cause Order. Accordingly, it is in default. See 17 C.F.R. § 201.155(a), .220(f). As authorized by Rule 155(a) of the Commission’s Rules of Practice, the following allegations of the OIP are deemed to be true.
Galaxy (CIK No. 1102217) is a Florida corporation with offices in Lake Villa, Illinois. It has a class of securities registered with the Commission pursuant to Exchange Act Section 12(g). Galaxy is delinquent in its periodic filings with the Commission, having not filed a periodic report since it filed a Form 10-QSB for the period ended September 30, 2005. Galaxy also failed to heed a notice sent to it by the Division of Enforcement, notifying it of its failure.
Exchange Act Section 13(a) and the rules promulgated thereunder require issuers of securities registered pursuant to Exchange Act Section 12 to file with the Commission current and accurate information in periodic reports, even if the registration is voluntary under Section 12(g). Specifically, Rule 13a-1 requires issuers to file annual reports (Forms 10-K or 10-KSB) and Rule 13a-13 requires issuers to file quarterly reports (Forms 10-Q or 10-QSB).
As a result of the foregoing, Galaxy has failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder.
2
IT IS ORDERED THAT, pursuant to Section 12(j) of the Securities Exchange Act of 1934, the registration of each class of registered securities of Galaxy Minerals, Inc., is revoked.
_____________________
James T. Kelly
Administrative Law Judge
Post Unavailable
Additional Information
Dave Patch from Investigatethesec.com on PalTalk
(CMKX) October 3, 2004
http://cmkx.yazzi.com/dave_patch_-_paltalk_100304.htm
"In a writ made public on Friday, three U.S. men are seeking money they left in trust with Mr. Saxena's lawyer, Russell Chamberlain, for shares of Global Explorations Corp., a former pink sheets listing."
"1999, Global changed its name to Global Explorations Inc. and listed on the Nasdaq Stock Market."
Title VSD
MAHEU, ROBERT
3523 COCHISE
LAS VEGAS NV 89109
http://www.sunbiz.org/scripts/cordet.exe?action=DETFIL&inq_doc_number=F96000005563&inq_came_...
GLOBAL GEOPHYSICAL EXPLORATIONS COMPANY, INC.
Cross Reference Name
GLOBAL EXPLORATIONS COMPANY, INC.
Filing Information
Document Number F96000005563
FEI Number NONE
Date Filed 10/24/1996
State NV
Status INACTIVE
Last Event REVOKED FOR ANNUAL REPORT
Event Date Filed 09/26/1997
Event Effective Date NONE
Principal Address
7421 NW 176TH ST
ALACHUA FL 32615
Mailing Address
7421 NW 176TH ST
ALACHUA FL 32615
Registered Agent Name & Address
WEBB, HERBERT M PA
4400 NW 23RD AVE, SUITE E
GAINESVILLE FL 32606 US
Registered Agent Resigned: 10/17/2000
Officer/Director Detail
Name & Address
Title C
JONES, CLIFFORD A
300 S. 4TH ST #700
LAS VEGAS NV 89101
Title PTD
SCOTT, NORMAN
7421 NW 176TH ST
ALACHUA FL 32615
Title VSD
MAHEU, ROBERT
3523 COCHISE
LAS VEGAS NV 89109
Annual Reports
No Annual Reports Filed
Document Images
10/17/2000 -- Reg. Agent Resignation
Note: This is not official record. See documents if question or conflict.
Global ex Saxena sued for undelivered shares
2007-08-21 15:30 ET - Street Wire
Also Street Wire (C-AHI) Asean Holdings Inc
by Mike Caswell
Three U.S. residents are suing fugitive Thai financier Rakesh Saxena over undelivered shares from eight years ago. Larry Kau, Anthony D'Aquisto and William Miller say they paid for shares of Global Explorations Corp. in 1999 but they did not receive the stock.
The claim was made public on Friday in a brief writ filed in B.C. Supreme Court.
Mr. Saxena, who was a financial backer of the Vancouver Stock Exchange-listed and much-touted Asean Holdings Inc., has been living under self-financed house arrest in the Vancouver area for much of the past 11 years. The Thai government is trying to extradite him on charges that he embezzled $88-million from the Bangkok Bank of Commerce.
Missing shares
In a writ made public on Friday, three U.S. men are seeking money they left in trust with Mr. Saxena's lawyer, Russell Chamberlain, for shares of Global Explorations Corp., a former pink sheets listing.
The amounts claimed vary. Mr. Kau says he lost $20,000, Mr. D'Aquisto says he lost $75,240 (U.S.) and Mr. Miller says he lost $25,000 (U.S.). The transactions took place in June and August of 1999.
The men claim they left the money in trust but did not receive any shares. They are seeking a court order allowing them to trace the money. They are also asking for damages for breach of trust "in the wrongful payment, receipt and appropriation of the funds."
Mr. Saxena has not answered the allegations.
Global Explorations
In 1999 Global Explorations was a Saxena-backed company. The company had incorporated two subsidiaries in India, where it planned to "conclude marketing joint ventures with prominent Indian industrial houses active in the print advertising business for over two decades."
On July 9, 1999, the Vancouver Stock Exchange halted the company, citing Mr. Saxena's involvement. The VSE said it wanted "clarification of market activity" after the recently dormant company came to life. It traded for a nickel in the spring, but went to a $2.03 high by July.
The exchange did not detail the problem, but in an interview Mr. Saxena said the exchange took exception to his involvement. The financier said would he take the company elsewhere. In November, 1999, Global changed its name to Global Explorations Inc. and listed on the Nasdaq Stock Market.
That same month, Mr. Saxena disclosed ownership of 2,612,550 shares of the company, or approximately 22.5 per cent of its voting securities.
The stock reached a $4.25 high in January, 2000, but quickly fizzled. It was at $2 by March and at 25 cents in May.
Saxena's 11-year-and-counting extradition
Mr. Saxena, an Indian national, has been fighting extradition to Thailand for 11 years. Other than one year in jail, he has spent most of his time living under $43,000-per-month self-financed house arrest. He currently lives in a $1.13-million riverfront house in Richmond.
In 1996 Thai authorities accused Mr. Saxena of fraudulently borrowing $88-million from the Bangkok Bank of Commerce. They claimed he sent the money to Swiss bank accounts and used it to repay personal debts.
Mr. Saxena denied the allegations.
The RCMP arrested Mr. Saxena at a luxury hotel in Whistler, B.C., on July 7, 1996, at the request of the Royal Thai Police. Thai authorities had been looking for Mr. Saxena in London, Switzerland and New York before he turned up in Whistler.
After the arrest Thailand sought the financier's extradition. He is still here.
From the start Mr. Saxena fought deportation, claiming that he would be killed if he was returned. In February, 1998, a judge released him on $2.5-million bail.
The ensuing hearing was the longest extradition trial in Canadian history. The decision, delivered after 92 days in court, came on Sept. 15, 2000. B.C. Supreme Court Justice Frank Maczko ordered the fugitive financier returned home.
Mr. Saxena appealed, but in November, 2003, then-Minister of Justice Martin Cauchon ordered the financier back to Thailand. Mr. Saxena appealed that decision too, but ultimately lost.
In March, 2006, three B.C. Court of Appeal judges affirmed Mr. Saxena's extradition. The judges also decided that Mr. Saxena imposed a flight risk and ordered him immediately jailed.
Jail was not where he would stay, however. The fugitive financier remained behind bars until last September, when a military coup in Thailand delayed his extradition. After the coup Mr. Saxena made a special request to Justice Minister Vic Toews, asking for permission to remain in Canada because there was no assurance Thailand's military rulers would treat him fairly.
Mr. Toews agreed, and Mr. Saxena returned to his house in Richmond.
Saxena linked to bank robber
Mr. Saxena was recently linked to another fugitive, accused bank robber Luke Sommer. U.S. authorities say Mr. Sommer masterminded an Aug. 7, 2006, robbery of a Bank of America branch in Tacoma, Wash. A former U.S. Army Ranger, Mr. Sommer was one of four masked gunmen who entered the bank at 5 p.m. with handguns and AK-47s. They left with $54,011 (U.S.) in cash.
All four were arrested within days, including Mr. Sommer, who was found at a grocery store in Westbank, B.C. Prosecutors in the U.S. began proceedings to extradite the Kelowna native. Meanwhile a B.C. judge placed him under house arrest and sent him to his mother's ranch in Peachland to await a deportation hearing.
Fearing he would be jailed for 30 years if deported, Mr. Sommer ran away from home this June.
In an unusual twist, he left a goodbye note and a CD for RCMP. Among other things, the CD contained 100 e-mails between himself and Mr. Saxena. The e-mails suggested Mr. Sommer worked with the fugitive financier on shell companies over a 10-month period.
One of the companies mentioned was American United Gold Corp., a junior miner trading on the OTC Bulletin Board. It has a 52-week high of 50 cents, and last traded at 1.8 cents.
Mr. Sommer said he met Mr. Saxena at the North Fraser Pretrial Centre in Port Coquitlam. The former U.S. Army Ranger also claimed he had been working with an Indo-Canadian gang on a plan to smuggle heroin into Canada.
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The wheels of justice turn slowly ok. But what is more interesting to me is that a Robert Maheu was also involved in this company I believe. The same Robert Maheu who was involved with CMKM Diamonds Inc....and we all KNOW how long that story is taking. Stay tuned...
Type in GLOBAL EXPLORATIONS COMPANY, INC. It is the 2nd one on the list! http://www.sunbiz.org/corinam.html
Posted by HndtoHnd @ 2007-08-21 16:28
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This guy has been ripping off investors for years, how does he get away with it?
Posted by Victim @ 2007-08-21 16:32
--------------------------------------------------------------------------------
"how does he get away with it?"
Because Canada doesn't have the balls to deport him. So, instead he delays and delays, appeal after appeal. Total joke.
Posted by Du-Rag @ 2007-08-21 18:00
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Forgot to add... when you look at Global and Anthony D Aquisto in the 10SB12G filed on 12/16/2002
You will see THOMSON KERNAGHAN.
They tie in directly to Mark Valentine and the CHELL GROUP. Which employed one Christina Hanneman as their IR person. Oh yeah, she also worked as IR for US Canadian Minerals...
But that is a small coincidence I am sure. lol
Posted by HndtoHnd @ 2007-08-21 18:31
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That slimebag Rakesh Saxena hung me out to try at Georgia Pacific!
Posted by Francois Otto @ 2007-08-21 23:08
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If CMKX can ger rid of the Grandmutha clause for revolked companies with imaginary naked short sales then you have something.
SEC Files Charges Against Ponzi Scheme Operators in $20 Million Mining Claim Securities Fraud
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20237 / August 10, 2007
SEC v. Earthly Mineral Solutions, Inc., Natural Minerals Processing Company, Roy D. Higgs, Frank L. Schwartz, and Rick Lawton, Civil Action No. 2:07-CV-01057 (D. Nev.)
SEC Files Charges Against Ponzi Scheme Operators in $20 Million Mining Claim Securities Fraud
On August 9, 2007, the Securities and Exchange Commission filed charges against two Nevada companies and their officers for perpetrating a $20 million Ponzi scheme involving mining claim interests. The Commission filed charges against Earthly Mineral Solutions, Inc. ("EMS"), Natural Minerals Processing Company ("NMPC"), both based in Henderson, Nevada, and their three principal officers, Roy D. Higgs, age 65 of Henderson, Nevada, Frank L. Schwartz, age 43 of Henderson, Nevada, and Rick Lawton, age 60 of Reno, Nevada, (collectively, "the defendants").
Also on August 9, 2007, the United States Attorney for the Eastern District of Missouri filed criminal charges against EMS, Higgs, and Schwartz for conduct alleged in the Commission's complaint.
The Commission's complaint alleges that between 2003 and 2006, the defendants offered and sold investors mining claims interests based on false and misleading information. As alleged in the complaint, the defendants claimed that investors' funds would be used to expand EMS' and NMPC's mineral processing and fertilizer production businesses. The defendants guaranteed investors a 7% to 9% annual return their on investment, which was to be paid out of the operating revenue from the mining and fertilizer businesses. In reality, the defendants were running a Ponzi scheme; neither EMS nor NMPC operated a functioning mining or fertilizer business, and the returns promised to investors were paid using the investments of new investors. The complaint further alleges that the defendants' scheme raised approximately $20 million from over 100 investors nationwide, many of whom had been saving for retirement and liquidated their personal Individual Retirement Accounts ("IRAs") to invest in the mining claims.
The Commission charged EMS, Higgs, Schwartz, and Lawton with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"). In addition, the Commission charged EMS, NMPC, Higgs, Schwartz, and Lawton with violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Commission also charged Higgs, Schwartz, and Lawton with violating the broker-dealer registration provision of Section 15(a) of the Exchange Act. The Commission seeks a permanent injunction, disgorgement with prejudgment interest, and civil penalties against all of the defendants.
The Commission acknowledges the valuable assistance the United States Attorney's Office for the Eastern District of Missouri, the Bureau of Land Management, and the Federal Bureau of Investigation in bringing this case.
SEC Complaint in this matter
http://www.sec.gov/litigation/litreleases/2007/lr20237.htm
--------------------------------------------------------------------------------
Home | Previous Page Modified: 08/10/2007
Community Property Laws
and Assets Protection
In the United States, nine jurisdictions have community property schemes. These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. The laws pertaining to community property raise some interesting questions concerning protecting assets from creditors, either for one spouse or the other. The questions discussed will by analyzed through use of the laws of California and Nevada. The statutory schemes of these two states are representative of the laws of all nine community property states, and will provide an answer to the questions raised.
I.
The community property laws of both states under review allow a married person to own separate property. This property can be used by the married couple in the marriage, or be held by the spouse who owns it separate and apart from the marriage community. This raises an important question. Does separate property receive different protection from a business creditor as it does from a personal creditor? Further, can a creditor of one spouse reach the separate property of the other spouse in order to satisfy the debt? The laws of both states provide a clear answer to both questions.
In Nevada, the right of a spouse to separate property is constitutional. Article 4, § 31 of the state constitution reads:
All property, both real and personal, of a married person owned or claimed by such person before marriage, and that acquired afterward by gift, devise or descent, shall be the separate property of such person. The legislature shall more clearly define the rights of married persons in relation to their separate property and other property.
The Nevada Supreme Court has strictly construed this section since its inception, making it abundantly clear that a spouse has a right to separate property. See, e.g., Walker v. Walker, 41Nev. 4, 164 P. 653, 169 P. 459 (1917); Thomas v. Nevans, 67 Ney. 122, 215 P.2d 244 (1950); Verheyden v. Verheyden, 104 Nev. 342, 757 P.2d 1328 (]988).
Responding to the constitutional section regarding separate property, the Nevada Legislature enacted Nevada Revised Statutes (NRS) 123.I30, which reads
1. All property of the wife owned by her before marriage, and that acquired by her afterwards by gift, bequest, devise, descent or by an award for personal injury damages, with the rents, issues and profits thereof, is her separate property.
2. All property of the husband owned by him before marriage, and that acquired by him afterwards by gift, bequest, devise, descent or by an award for personal injury damages, with the rents, issues and profits thereof, is his separate property.
Under this statute, an asset which comes under its terms is the separate property of one of the spouses in the absence of clear and convincing proof that the asset was purchased with community funds or credit, or was acquired by the spouse's community toil or talent. See, e.g., Kelly v. Kelly, 86 Ney. 301, 468 P.2d 359 (1970); Pryor v. Pryor, 103 Ney. 148, 734 P.2d 718 (]987);
Smith v. Smith, 94 Ney. 249, 578 P.2d 319 (1978). (All property acquired during marriage which does not come within the terms of NRS 123.130 is presumed to be community property. See NRS 123.220; Hardy v. United States, 918 F. Supp. 312 (D. Nev. ]996); Breliant v. Preferred Equities Corp., 112 Ney. 663, 918 P.2d 314 (1996); Norwest Fin. v. Lawyer, 109 Ney. 242, 849 P.2d 324 (1993)).
Given the above rules in Nevada, the questions presented can be answered, generally, in the negative. A creditor of a single spouse simply cannot reach the separate property of the other spouse to satisfy a debt. This is true whether or not the creditor is a business creditor or a personal creditor. Cf. Norwest Fin. v. Lawyer, 109 Ney. 242, 849 P.2d 324 (1993)(where wife did not put up her separate property as security for a loan to the couple, and husband declared bankruptcy, creditor could not attach the separate property of the wife to satisfy the debt). This result is sensible; to further the basic constitutional protection of property for those who have not themselves created a debt, or pledged their own property as security for the debt of another. (This rule also pertains to debts incurred prior to marriage. See NRS 123.050, which states that the separate property of a spouse is not liable for the debts of the other spouse contracted before marriage.)
Despite this general rule in Nevada, there are certain statutory exceptions. NRS 123.090 reads:
If the husband neglects to make adequate provision for the support of his wife, any other person may in good faith supply her with articles necessary for her support, and recover the reasonable value thereof from the husband. The separate property of the husband is liable for the cost of such necessities if the community property of the spouses is not sufficient to satisfy such debt. (Emphasis added.)
Notice that this statute concerns only the duty of a husband to support his wife. NRS 123.110 imposes a similar duty on a wife to support her husband:
The wife must support the husband out of her separate property when he has no separate property and they have no community property and he, from infirmity, is not able or competent to support himself. (Emphasis added.)
This statute requires a wife to pay creditors out of her separate property if they supply necessaries of life to an infirm, impecunious husband. See, e.g., Swogger v. Sunrise Hospital, 88 Ney. 300, 496 P.2d 751 (1972); United Fire Ins. Co. v. McClelland, 105 Ney. 504, 780 P.2d 193 (1989).
These two statutory exceptions to the protection of separate property only apply if a creditor supplies goods or services "necessary" for the life of the other spouse. Although the limits of this have not been defined, the Nevada Supreme Court has held that a husband cannot be held personally liable under NRS 123.090 for the debts of his wife which were incurred pursuant to a contract to rent an automobile. Ferreira v. P.C.H. Inc., 105 Ney. 305, 774 P.2d 1041 (1989). Thus, it is likely that the word "necessary" will be narrowly construed by the Nevada courts, therefore providing protection for the personal property of spouses.
The rules in California are quite similar as they pertain to separate property. The right to separate property is also constitutional in origin. Article 1, § 21 of the California Constitution reads:
Property owned before marriage or acquired during marriage by gift, will, or inheritance is separate property.
Similar to Nevada, the California courts have strictly construed this constitutional provision, making it clear that spouses have a right to own separate property. See, e.g., Snyder v. Webb, 3 Cal. 83 (1853); Lewis v. Johns, 24 Cal. 98 (1864); In re Spencer, 82 Cal. 1]0, 23 P. 37, aff'd, 83 Cal. 460, 23 P. 395 (1890). Not only this, but the separate property of one spouse simply cannot constitutionally be made to answer for any debt of the other spouse. Lewis v. Johns, supra; George v. Ransom, 15 Cal. 322 (1860).
The California Legislature has enacted community property statutes to further the policy of Article 1, § 21 of the state constitution. Family Code (FC) section 770 reads:
(a) Separate property of a married person includes all of the following:
(1) All property owned by the person before marriage.
(2) All property acquired by the person after marriage by gift, bequest, devise, or descent.
(3) The rents, issues, and profits of the property described in this section.
(b) A married person may, without the consent of the person's spouse, convey the person's separate property.
The cases interpreting this section leave it without doubt that spouses can own separate property. See, e.g., Peteira v. Peteira, 156 Cal. 1, 103 P. 488 (1909); In re Dargie's Estate, 179 Cai. 418, 177 P. 165 (1918); Ia re Jafeman's Marriage, 29 Cal. App.3d 244, 105 Cal. Rptr. 483 (1972).
California law also deals specifically with the questions under discussion. FC section 913 reads, in pertinent part:
(a) The separate property of a married person is liable for a debt incurred by the person before or during marriage.
(b) Except as otherwise provided by statute:
(1) The separate property of a married person is not liable for a debt incurred by the person's spouse before or during marriage. (Emphasis added.)
This statute has been strictly enforced, freeing the separate property of one spouse from the liability of the other spouse’s creditors of all types. See, e.g., Kennedy v. Taylor, 155 Cal. App.3d 126. 201 Cal. Rptr. 779 (1984); Mariners Say. & Loan Ass'n v. Nell, 22 Cal. App.3d 232, 99 Cal. Rptr. 238 (1971). (The result, of course, is different if both spouses jointly incur an obligation, thus subjecting the personal property of each to the reach of creditors. See, e.g., In re Setrakian's Estate, 178 Cai. App.2d 833, 3 Cal. Rptr. 444 (1960); Garthofner v. Edmonds, 74 Cal. App.2d 15, 167 P.2d 789 (1946). And, of course, community property is liable for the repayment of a debt incurred by either spouse while married. See In re Marriage of Braendle, 46 Cal. App.4th 1037, 54 Cai. Rptr.2d 397 (1996)).
Similar to Nevada, there is a statutory exception to the protection of separate property. FC section 914 reads, in pertinent part:
(a) Notwithstanding Section 913, a married person is personally liable for the following debts incurred by the person's spouse during marriage:
(1) A debt incurred for necessaries of life of the person's spouse while the spouses are living together.
* * *
(b) The separate property of a married person may be applied to the satisfaction of a debt for which the person is personally liable pursuant to this section. (Emphasis added.)
Under this statute, "necessaries of life" are those that are required to sustain life. See, e.g., Ratzlaff v. Portillo, 14 Cal. App.3d 1013, 92 Cal. Rptr. 722 (1971). Thus, like Nevada's exception, California's exception is quite narrow and will rarely be invoked to harm the separate property of a spouse.
All of the above clearly indicates that both Nevada and California would answer the questions under discussion in the negative. Because of this, the rules also provide a planning opportunity. If one spouse owns a business and fears the possibility that a creditor may come after him, the family assets can be protected by having the other spouse own a majority of the assets as her separate property. The laws of both states make this possible.
NRS 123.070 allows a husband and wife to make contracts with one another respecting property, which any unmarried person could make. Thus, a husband could gift his separate property or his portion of community property to his spouse, thus making her the owner of a great deal of separate property. See, e.g., Kerley v. Kerley, 112 Nev. 36, 910 P.2d 279 (1996); Campbell v. Campbell, 101 Ney. 380, 705 P.2d 154 (1985); Schmit v. United States, 896 F.2d 352 (9th Cir. 1989). As the wife's separate property, the husband's creditors simply could not reach the property.
The laws of California allow the same type of transfer to occur. See FC sections 850, 851, 852; Estate of Petersen, 28 Cal. App.4th 1742, 34 Cal. Rptr.2d 449 (1994); In re Roosevelt, 87 F.3d 311, opinion amended on denial of rehearing, 98 F.3d 1169 (9th Cir. 1996).
There are two things which must be remembered regarding such transmutations of property. First, the laws regarding fraudulent conveyances must not be violated. The transfer to the other spouse should occur prior to any attempt of a creditor to reach the property. Second, once the transfer occurs, the other spouse owns the now-separate property outright, with full power to control the property. Cf. NRS 123.170. And, if the spouses later divorce, the separate property belongs entirely to its owner. Thus, one must be sure of the solidity of their marriage before attempting such transfers for protection from potential creditors.
II.
After what has been stated above, the remaining questions under consideration can be answered in a more concise manner: How does a charging order against one spouse affect the property rights of a married couple in a community property state? What if the charging order is against both spouses?
As we know, a charging order, be it against a partner or a member of an LLC, merely gives the creditor the right to step into the shoes of the business owner and collect any money that the business owner would have been entitled to, up until the point that the debt has been satisfied. This rule applies in community property states as well as non-community property states. Thus, in the ordinary course of events, community property laws will have no effect whatsoever in a situation involving a charging order against either one spouse or both spouses.
Although no authority has been discovered to support the notion that a charging order, if it does not satisfy the debt, can be "converted" into an order to take over the partner's or member's interest in the business, it might be theoretically possible for this to occur. If so, if the business interest belongs to only one spouse as their separate property, it obviously can be reached by the creditor. Also, as stated above, the community property can be reached as well. But so long as the other spouse did not jointly incur the obligation, her separate property simply could not be reached by the creditor.
Given the lack of authority regarding a charging order being used in such a manner, it is highly unlikely that such an event will ever occur.
If it did, however, and both spouses jointly owned the business interest at stake, then the separate property of both would potentially be at risk, if the business interest itself was not of sufficient value to satisfy the debt. One way to avoid this risk would be for only one spouse to hold an interest in any business wherein a charging order may be used by a creditor at some point. Since this would interfere with the already-created businesses of literally millions of people, this is not a realistic choice. This is just further evidence of why a court will never allow a judgment creditor to do more with a charging order than they are designed to do.
III.
In conclusion, the separate property rules of community property schemes provide a great deal of protection for non-debtor spouses, no matter if the creditor is a business creditor or a personal creditor. As regards the charging order issue, it is basically a chimera.
Zinc lozenges for a cold: useless as lips on a chicken
By SooToday.com Staff
SooToday.com
Friday, August 03, 2007
NEWS RELEASE
INFECTIOUS DISEASES
SOCIETY OF AMERICA
http://sootoday.com/content/news/full_story.asp?StoryNumber=26363
Blogger Jerome Armstrong Settles Stock-Touting Suit with SEC http://watchingthewatchers.org/news/1285/blogger-jerome-armstrong-settles
By Rogers Cadenhead
Watching the Watchers
Influential liberal blogger Jerome Armstrong, the founder of MyDD and an originator of the netroots movement, has agreed to pay $29,000 in fines and penalties to settle a 2003 SEC suit accusing him of touting a stock on Internet message boards without disclosing his financial interest in the company.
The Commission's Complaint, filed on April 14, 2003, alleged that beginning on March 6, 2000, Armstrong touted the stock of BluePoint Linux Software Corporation ("BluePoint") by posting unsubstantiated, favorable buy recommendations on the Raging Bull internet site. Armstrong posted over eighty such recommendations during the first three weeks that the stock of BluePoint was publicly traded. According to the Complaint, Armstrong praised BluePoint's investment value and encouraged investors who were experiencing trouble having their orders filled to keep trying. The Complaint further alleged that the promoters of BluePoint were secretly transferring stock in three other companies to Armstrong at prices below the then current market for those three stocks and that Armstrong made at least $20,000 by selling the shares he received from the promoters of BluePoint.
Along with business partner Markos Moulitsas, Armstrong helped spark the netroots movement, an Internet-fueled effort to elect Democrats and counter conservative success in other media. Moulitsas credits him with the inspiration to created Daily Kos.
Although the settlement states that Armstrong neither admits nor denies the SEC allegations, he made an August 2003 court filing that acknowledged posting messages on Raging Bull about BluePoint while he had a financial relationship with company insiders Michael Markow and Francois Goelo.
Armstrong's message board postings related to Bluepoint are no longer online, but there are dozens of messages on the InvestorsHub site in which he promoted a related company before a merger, never revealing he was given 25,000 shares before the deal.
An SEC filing reveals that Armstrong received the shares in a reverse merger executed by the Chinese wireless startup AccessTel, which acquired a publicly traded online mall called Shopss.Com on Dec. 18, 2000. Markow's Global Guarantee Corporation received 1.5 million shares in the AccessTel merger.
From September 2000 to March 2002, Armstrong posted 95 messages using the account myDDdotcom on AccessTel's InvestorsHub board. He predicted great potential for its technology and a big increase in price, deriding skeptics as "bashers." None of his postings mention his relationship with the company, formed by executives who created Bluepoint.
On the day of the merger, Armstrong announced on InvestorsHub that he had just bought 250 shares of the company:
... i did DD call quite a bit this weekend, and am satisfied to continue holding, patient for their plan to become widely known. Today I just bought a whopping 250 shares in my son's (Jackson) educational IRA that I just set up for the toddler, hope it grows as much as he is.
Bluepoint laid off all employees in 2005 after a failed attempt to develop Linux software for the car industry. The company exists today as an empty shell hoping for a merger, stating in its 2006 annual report that its only remaining asset is $6 cash. More than 4.5 million shares of its stock are owned by the public, which reached a high of $21 during the period Armstrong was accused of touting and last sold for $0.04 cents.
AccessTel are currently worth one cent, down from around $1.25 at the time of the merger. The New Jersey company has left the wireless business and sells ladies pantyhose in Lebanon.
When allegations against Armstrong were first reported in June 2006, Moulitsas asked a private mailing list of liberal bloggers to ignore the story until it was settled:
Jerome can't talk about it now since the case is not fully closed. But once it is, he'll go on the offensive. That should be a couple of months off. ...
My request to you guys is that you ignore this for now. It would make my life easier if we can confine the story. Then, once Jerome can speak and defend himself, then I'll go on the offensive (which is when I would file any lawsuits) and anyone can pile on. If any of us blog on this right now, we fuel the story.
Under a December 2003 agreement reached with the SEC, Armstrong is prohibited from making any public statement denying the charges or suggesting the complaint is factually untrue.
Moulitsas has not made any statement regarding the settlement since news broke Wednesday. Armstrong told New York Times blogger Chris Suellentrop in an email, "It's good to see the matter finally end."
In April, Armstrong received the Paul and Sheila Wellstone Award for Political Organizing from the Twenty-First Century Democrats "for his visionary leadership in working to create the online netroots community, which has changed the face of politics forever in America by creating a mechanism for people to come together and demand accountability from their leaders."
The group has removed all references to Armstrong from its web site, including his photo and the announcement of his award, which was cached by Google July 20.
When Armstrong began MyDD.Com in 2001, the site's name stood for "My Due Diligence." In stock trading, due diligence refers to the care that should be taken to review all facts related to an investment prior to purchase.
Disclosure: In 2005, the author of this piece was a member of an ad network that included Daily Kos, a professional collaboration that crashed and burned.
Filed at 10:32 AM | 0 COMMENTS | permalink
Comments
R. Steven Davidson Chairman of the Board since May 4, 2007
http://www.secinfo.com/dV3p8.u1W3.htm
Hedge Funnies Launches Paid Bashing Subsidiary
http://www.hedgefunnies.com/
And it's not easy to take the company's claims for safety of the product at face value when the man who claims to have developed the product, one Robert S. DAVIDSON, parts his name in the middle (as in R. Steven DAVIDSON) and boasts a Ph.D. in "biopharmacuetical project management" from the so-called American University of Asturias, a Spanish-based diploma mill "university" that was shut down by the Spanish government after being caught issuing what purported to be advanced degrees in almost anything, to anyone whose checks didn't bounce.
Requests for an interview with DAVIDSON were fielded at his California office by a cagey fellow who identified himself simply as "Dave," and promised to get the request to DAVIDSON.
At press-time neither man had returned the call.
* Please send e-mail to: cBYRON@nypost.com
==========================
COLD-EEZE SQUEEZE
By CHRISTOPHER BYRON
November 8, 2004 -- Remember when all of a sudden there wasn't enough flu vaccine to go around, and the subject somehow came up in one of the Presidential debates? And remember when George Bush said, in so many words, "Look, it's simple, just don't get a flu shot this year..."?
Well, out here at Curmudgeonly Arms, where the baleful moan of the cold north wind sweeps over the moors from November to May sending the body count of its victims soaring, the Curmudgeonlies stood brave, tall and true, for we figured, No flu vaccine? No problem!
That is because we Curmudgeonlies have long known the secret to a winter free of the wheezing and sneezing that afflicts the rest of humankind when the cruel winds blow.
Our secret is, of course, Cold-eeze throat lozenges, which a person may purchase at any reputable pharmacy (or indeed 7-Eleven), for $5.00 at retail give or take ? which is to say, for roughly half the price of a standup pepperoni-and-cheese pie at Ray's Famous Pizza.
So imagine our consternation upon learning, from a wanderer through the wintry gloom, that Cold-eeze ? when spritzed into the nose as a nasal aerosol instead of taken orally as a lozenge ? might not actually kill you but can apparently destroy your sense of smell.
What's that? Cold-eeze nasal spray, a health menace?
Yes, verily it is so ? at least if one is to judge from a lawsuit that was filed last week in Bucks County, Penn.
As reported by our informant, his words broken by the staccato of his hacking and consumptive cough, eight different consumer plaintiffs in the suit say they used Cold-eeze nasal spray and now wouldn't be able to smell Osama bin Laden if he were standing right next to them.
Fortunately, the honest tradesmen at Quigley Corp., producers of Cold-eeze, had already begun heading for the nasal spray exit door when the lawsuit hit.
They had informed their distributors in mid-September that the company had decided to drop the nasal spray product line because consumer demand for it hadn't developed as expected.
THIS was followed in due course by last week's lawsuit, and quicker than you could say "Anybody got a Kleenex?" the company response had hit the PR newswires, asserting that even a "cursory look" at the suit had been enough to convince Quigley brass that the complaint was "frivolous and without merit," and that the company intends to defend itself "vigorously" because the only thing Cold-eeze destroys is germs.
Being of an odd and suspicious sort, it thus took no time at all before our shingle-wracked manservant, Igor, could be observed struggling up the twisting stairway to my writer's garret at the top of the north tower.
Presenting himself breathless at the doorway, and with his hunchback blocking further progress, he declared: "Here, sire, take a whiff of these...!" and placed upon the floor before me a folio of Quigley Corp. documents.
He had arranged them for ex-Clinton national security affairs advisor Sandy Berger to filch from the files of the U.S. Securities and Exchange Commission.
Then cackling in his special way, he departed, maneuvering his hunchback down the darkened staircase and across the courtyard to his abode in the corn crib, his parting words still ringing hauntingly, and mysteriously, in my ears: "Beware the ides of evil, sire, when darkness exhalts the moor."
The documents that Igor left behind for my perusal do give one pause, for they show that lawsuits by customers claiming damages from the use of Cold-eeze nasal spray had been accumulating against Quigley since as early as February of this year, when a Connecticut woman named Paige D. DAVIDSON claimed using Cold-eeze nasal spray destroyed her sense of smell and that she'd never gotten it back.
Then in September, a Minnesota couple ? Sheryl and Howard Polski ? claimed the same thing, asserting that they too used had some Cold-eeze nasal spray, in December 2003, and that their colds had gone away but so had their senses of smell and taste, never to return.
In fact, even as lawyers for the Polskis were preparing their complaint, Quigley's brass were informing the company's distributors that they were dropping the nasal spray form of Cold-eeze from Quigley's product list. A month later, on Oct. 13, the company filed a Form 8K report at the SEC, making the news public to everyone.
QUIGLEY'S strategy for waving away these claims with words like "frivolous" and "without merit" seems to rest heavily on the assertion that Cold-eeze nasal spray was exhaustively safety-tested in what last week's press release from the company described as a "double-blind, placebo-controlled study" prior to introducing it to the market in September 2003.
But Igor's documents showed that references to double- blind placebo-controlled studies have appeared nearly two dozen times in Quigley's SEC filings over the last seven years, and the references have nothing to do with the nasal spray form of the treatment.
Instead, the references all involve one or the other of two early 1990s studies that purported to test the efficacy of the key ingredient in Cold- eeze ? so-called zinc gluconate ? when consumed in lozenge form as a means of treating the common cold.
In fact, it would appear that Quigley would never have become involved in the marketing of a zinc-based nasal spray had it not been for the apparent success a rival company called Matrixx Initiatives Inc. had been having with its own zinc- based nasal spray, which it called Zicam, and had begun marketing in late 1999.
But by the time Quigley announced in February 2003 that it was going to be bringing its own version of a zinc-based nasal spray to market later that year, Matrixx Initiatives was already hip-deep in lawsuits from nearly 100 customers who claimed that they'd used Zicam and lost their sense of smell.
Those claimants now top 175 and are continuing to grow.
And it's not easy to take the company's claims for safety of the product at face value when the man who claims to have developed the product, one Robert S. DAVIDSON, parts his name in the middle (as in R. Steven DAVIDSON) and boasts a Ph.D. in "biopharmacuetical project management" from the so-called American University of Asturias, a Spanish-based diploma mill "university" that was shut down by the Spanish government after being caught issuing what purported to be advanced degrees in almost anything, to anyone whose checks didn't bounce.
Requests for an interview with DAVIDSON were fielded at his California office by a cagey fellow who identified himself simply as "Dave," and promised to get the request to DAVIDSON.
At press-time neither man had returned the call.
* Please send e-mail to: cBYRON@nypost.com
Robert Steven Davidson and his bogus MBA/Ph.D diploma mill degrees. "Dr" R. Steven Davidson never did explain how he got his diploma mill MBA with only havng a High School degree at the time.
The Men Behind Zicam
http://www.washingtonpost.com/wp-dyn/content/article/2006/01/30/AR2006013001255.html
Tuesday, January 31, 2006; Page HE05
Like other scientific entrepreneurs, Robert Steven DAVIDSON thought zinc might be a promising treatment for the common cold. But unlike many inventors of drugs, DAVIDSON and his colleague Charles B. HENSLEY, who hold patents on Zicam, have unusual backgrounds.
DAVIDSON received a bachelor's degree in 2004 from a "virtual" university, Excelsior College in Albany, N.Y. He lists himself as a PhD, a degree he obtained from an unaccredited and now-defunct university in Spain.
His colleague and co-inventor HENSLEY holds a doctorate in physiology from the University of Southern California and is currently chief executive officer of PRB Pharmaceuticals based in Cypress, Calif. HENSLEY recently received a warning letter from the Food and Drug Administration (FDA) about the sale over the Internet of an unapproved drug his company makes to treat bird flu. HENSLEY previously developed a weight-loss remedy that involves sniffing "specially developed aromas."
DAVIDSON, who has contributed articles to Men's Fitness magazine, says his doctorate in biopharmaceutical project management and his MBA in international finance were earned at the American University of ASTURIAS in ASTURIAS, Spain, in the late 1990s. The school was closed in 2000 for violations of Spanish law, records show, and is considered a DIPLOMA mill by American authorities.
DAVIDSON, who sold his interest in Zicam several years ago when he left to start another biotech firm, said he was unaware of any problems with the school in Spain. It is unusual to earn a doctorate before a bachelor's degree, he said in an interview, but his advanced degrees are legitimate. "I did work, a research paper and a dissertation."
He declined to discuss whether any safety questions arose during Zicam's development and testing.
DAVIDSON said he met HENSLEY years ago at Cleveland Chiropractic College in Los Angeles, where he was taking classes and HENSLEY was a professor.
On Nov. 23, the FDA sent HENSLEY a letter about Vira 38, an antiviral compound marketed on PRB's Web site as effective in treating influenza, bird flu and SARS. The regulatory agency told HENSLEY he was violating federal law by selling an unapproved drug and warned that he and his company could face further legal action including "seizure of illegal products."
HENSLEY did not respond to e-mails or telephone calls.
-- Sandra G. Boodman
=======================================================
"If you do the same workout every day, you're going to plateau. It's the same with your diet," says R. Steven DAVIDSON, who holds a Ph.D. in biochemistry from Columbia University. "By changing up the amount of carbs you consume per day [while maintaining an exercise regimen], you create an uncertainty that boosts your body's metabolic rate." To make it easy for you, we've provided specific meal plans for both high- and low-carb days.
http://www.mensfitness.com/nutrition/24
Eat Carbs to Lose Fat
That's right. Burn fat fast (without starving) with our easy carb-rotation plan.
Originally featured in:
Men's Fitness April, 2001
Written by: Steve Stiefel Photos by: David Roth/Stone
p a g e 1 | 2
Insanity has been defined as expecting different results from repeating the same behavior. Professional athletes take this concept into account when trying to make improvements in their performance. When Andre Agassi's ATP Tour ranking plummeted from No. 1 to No. 110 several years back, he knew he had to do more than just endlessly hit balls across the net if he wanted to regain his previous dominance. After embarking on a cross-training and weightlifting program, he eventually made it back to the top of the tennis world.
Too many carbs make you fat, and too few make you tired. What's the answer? Rotation.
You may have made a similar adjustment with regard to your weight-training or cardio program. However, this acquired sanity tends to take a leap out the window when it comes to nutrition. Many guys go on low-calorie crash diets to shed body fat, only to balloon back up when they revert back to their previous eating mode. If you've been working out regularly but haven't been able to shrink a recalcitrant gut, try the simple strategy of rotating the amount of carbs you eat on a daily basis. Simply put, eat different amounts of carbs on certain days of the week to create an environment in which your body is more likely to tap into body-fat stores for energy.
"If you do the same workout every day, you're going to plateau. It's the same with your diet," says R. Steven DAVIDSON, who holds a Ph.D. in biochemistry from Columbia University. "By changing up the amount of carbs you consume per day [while maintaining an exercise regimen], you create an uncertainty that boosts your body's metabolic rate." To make it easy for you, we've provided specific meal plans for both high- and low-carb days.
The Low-Carb Depression
Low-calorie diets usually fail for a couple of reasons. First, they tend to reduce your calories so low that you just can't put up with the hunger pangs and withdrawal for very long. Second, such diets actually reduce your metabolic rate, making you burn calories slower than you did before. By drastically cutting calories, you send your body the message that it needs to survive on less, so it reduces the amount it burns. When you return to your normal eating patterns, you've turned your body into a fat-storing machine, and you start to blubber back up in the precise places where you had lost body fat, often surpassing previous fat stores.
"Carbohydrates are the preferred fuel in most tissues of the body," says Lyle McDonald, author of The Ketogenic Diet. "When carbohydrates are available, they're burned first, instead of fat. Basically, the more carbohydrates you eat, the less fat you burn; the fewer carbohydrates you eat, the more body fat you burn."
But low-carb diets have limitations; you may begin to feel sluggish and depleted, especially when you work out, and you may not be able to maintain that level of deprivation. You may also become agitated, anxious and depressed. Carbohydrates give you the physical and mental energy you need to work out, and this creates a Catch-22: If you eat a lot of carbohydrates, you keep your muscles primed for training, but you won't eliminate body fat. If you drastically reduce carbohydrate intake, you deplete your muscle-glycogen stores, which makes for poor progress while training. How do you have your cake and eat it, too? Rotate those carbs, man.
Benefits of Cycling Carbs
To lose body fat and keep it off for good, you must accomplish two seemingly contradictory objectives: 1) reduce calories below the level you need for bodyweight maintenance, and 2) provide your body with all the energy and nutrients it needs to function at full capacity. A nutrition plan that has you cycling high- and low-carbohydrate intake throughout the week helps you do both. "Carbohydrate cycling allows the benefits of fat-burning while still maintaining high-intensity exercise performance and results," McDonald says.
On days when you eat fewer carbs, your body taps into fat stores for energy. On days when you consume more carbs, you'll be refueling your muscles, keeping you primed for your workouts over the next few days. The eating program outlined below provides you with virtually the same amount of calories each day. On low-carb days, increase your consumption of protein and healthy fats; on high-carb days, decrease these foods. The only stipulation is that you must consume 10 percent to 15 percent fewer calories than you need for maintenance, because you can't lose body fat if you're taking in more calories than you're burning.
Real-Guy Rotation Plan
This diet plan is designed for people who live in the real world, i.e., you. We don't expect you to spend all your time counting and weighing every gram of food that passes your lips. The idea is simply to keep your carbohydrates low on Monday, Tuesday, Thursday and Friday, and to elevate them on Wednesday, Saturday and Sunday. This rotation seems to best fit most people's schedules, but feel free to change up the days to better suit your lifestyle.
On low-carb days, eat no more than 150 grams of carbs. We've outlined full nutrition plans for two days to give you an indication of the types and quantities of foods to consume. On the "off" days, eat around 300 grams of carbs. A little cheating is okay, and even encouraged on high-carb days, because that helps keep your body in a state of metabolic confusion, and keeps fat-burning channels open. Use our sample menus to help create combinations that appeal to you and your lifestyle. If you put particular emphasis on decreasing your carbs on the down days while sticking to your exercise regimen, you'll begin to see that stubborn body fat finally disappear. 1 | p a g e 2
Steve Stiefel orders a protein-heavy breakfast every morning, but the deli never gets it right.
http://www.mensfitness.com/nutrition/24
================================================
DAVIDSON'SKNACK GOES BACK TO HIS DIPLOMA MILL DAYS:
=================================================
DAVIDSON's knack for business goes back to his days at American University in Asturias, Spain where he examined the European way of doing business. "I wanted to understand how people in the rest of the world did business and how those cultures worked," he said. "It was very informal and it made me realize I wanted to start my own business instead of working for somebody else."
Growing up in a small family in New York, DAVIDSON felt he always had a knack for learning and science. With a police officer for a father and a mother involved in various businesses, DAVIDSON quickly learned the value of hard work and perseverance. "I knew that you always had to try harder to get where you wanted to go," he said.
Business over medicine
Although he had originally set his eyes on a medical degree, DAVIDSON was fascinated by the intricacies and challenges of business and eventually earned a master's degree in business administration and a doctorate in biopharmaceutical studies.
"I really loved medicine, but I thought business was the best direction for me," he said.
Soon DAVIDSON established biotech startup Biotem Cytotechnologies and later formed Gel Tech LLC which eventually became Zengen where he developed Zicam.
==================================================
The following article was also published in the Orange County Register around the same time period.
San Fernando Valley Business Journal, June 23, 2003 v8 i13 p16(1)
His business acumen helps company in biotech world. (Best Companies in the Valley--A Special Report). (biotechnology company Zengen Inc.)(president R. Steven DAVIDSON)(Company Profile) Carlos Martinez.
Full Text: COPYRIGHT 2003 CBJ, L.P.
*****Article Begins*****
His business acumen helps company in biotech world.
R. Steven "Rob" DAVIDSON always felt he was a problem solver. As president and CEO of Woodland Hills-based Zengen Inc., the 37-year-old DAVIDSON heads what is arguably one of the best financed startup biotechs in the Valley.
DAVIDSON, who is the business brains behind the company, is the architect of the firm's plan that relies on developing over the counter drugs to help fund ongoing research into the company's proprietary peptide technology.
Peptides are compounds derived from two or more amino acids combined. Amino acids are the chief components of proteins which are synthesized by living cells.
It was just two years ago that Zengen sold off its interest in Zicam, an over-the-counter cold remedy and nose spray it developed, for $17 million which went toward ongoing research into peptides.
"It's a strategy that's managed to work well for us," said DAVIDSON, who helped engineer the deal.
DAVIDSON figured that since over-the-counter medicines have fewer regulatory issues than prescription-based pharmaceuticals, they could be developed and marketed quickly, giving the company needed revenue to fund research.
Today, DAVIDSON hopes to strike gold again with over-the-counter eyedrops that the company is developing to further fund research efforts.
Such funding strategy is unusual in an industry where research dollars are at a premium, said Brent Reinke, an attorney with Crosby Heafey Roach & May, who helps put together funding deals for biotechs.
"It's not unheard of, but it's a creative way of getting funding," Reinke said.
DAVIDSON's knack for business goes back to his days at American University in Asturias, Spain where he examined the European way of doing business. "I wanted to understand how people in the rest of the world did business and how those cultures worked," he said. "It was very informal and it made me realize I wanted to start my own business instead of working for somebody else."
Growing up in a small family in New York, DAVIDSON felt he always had a knack for learning and science. With a police officer for a father and a mother involved in various businesses, DAVIDSON quickly learned the value of hard work and perseverance. "I knew that you always had to try harder to get where you wanted to go," he said.
Business over medicine
Although he had originally set his eyes on a medical degree, DAVIDSON was fascinated by the intricacies and challenges of business and eventually earned a master's degree in business administration and a doctorate in biopharmaceutical studies.
"I really loved medicine, but I thought business was the best direction for me," he said.
Soon DAVIDSON established biotech startup Biotem Cytotechnologies and later formed Gel Tech LLC which eventually became Zengen where he developed Zicam.
By joining with Dr. James Lipton, the creator of the peptide technology, DAVIDSON sought to show the biotech and investment communities that the peptide molecules would work in different anti-bacterial and anti-microbial technologies.
"We could do all kinds of great things, but we couldn't afford to go for the big one," DAVIDSON said.
"We went for a soft target -- so we went for the anti-microbial or a treatment for yeast infections."
So far; the peptide molecules are showing promise in treating yeast and other infections, including serving as a therapy for organ rejection.
DAVIDSON's business strategy and appreciation for the technology isn't lost on Lipton, who has been researching peptide molecules since 1966.
"He really has a remarkable business sense and dedication to the work," Lipton said.
Today, the company has established its subsidiary, Zensano, which develops over-the-counter medicines, to help fund research and. development for biotech products.
With one unit developing over-the-counter products, a second developing products using peptide molecules, and a third unit developing drug delivery systems, DAVIDSON has created a self-sustaining biotech that is arguably the envy of other startups.
As for his future, DAVIDSON hopes to push forward with Zengen's cutting edge technology.
"Big companies never attracted me," he said.
"Here, we're doing a lot of different things so we're not just a one trick pony. That's exciting."
Maybe Unversal Express can deliver the Payout? lol
Praise the Lord and pass the java
Coffeehouse opens in old downtown church
Michael Clancy
The Arizona Republic
May. 17, 2003 12:00 AM
A quaint old church at the edge of downtown Phoenix has become home to a new and unusual non-denominational church that uses telemarketing to raise money and will open a coffeehouse today to spread the word.
Faithworks Contemporary Christian Church operates out of the old Zion Lutheran Church buildings at Ninth Avenue and Van Buren Street.
"We have a unique piece of history here," said DeWayne Reeves, president of Handi-Net, a telemarketing company, and pastor of Faithworks Contemporary Christian Church.
Reeves, who describes himself as a former drug and alcohol addict, said he has no congregation yet but hopes to develop one through the coffeehouse.
It will be called Sweet Daddy's Christian Coffee House, not as a flip reference to God, but because in acquiring a security system from a defunct Tempe pool parlor, the neon sign came with it.
"We want to create a bridge between the secular world and the Christian world," he said. "This is going to be an environment where people can come and realize that Christians do have a life."
The first night for the coffeehouse is tonight, with performances by Noel Barto, Dolph's in Love and Bethany, all contemporary Christian entertainers.
Reeves acquired the church property with a bid just prior to a foreclosure sale, minutes before a higher bid came in.
He and the 20 members of his telemarketing company moved in on Nov. 1.
He employs people from the street, he said, recovering addicts and alcoholics, to work on the business side. He said the company, which markets several products, has 30,000 regular customers.
He said he particularly is interested in serving the homeless and disenfranchised. It comes from being that way himself.
"I was eating out of a dumpster at the Burger King at 16th Street and Thomas when I had my epiphany," he said. "That night I just surrendered."
That was seven years ago, and things started to change, he said. He got away from self-pity and turned his concern outward.
"Once I began to focus on others, I felt a joy unspeakable," he said.
With the proceeds from the business, he and his wife, Anne-Marie, have started or helped support a domestic violence shelter, a mission in Rocky Point and an orphanage in Uganda.
He is particularly proud of the orphanage in Uganda. The couple met Pastor Chris Lubega at a pastors conference in Phoenix, invited him to speak at their own church, Grace Covenant Fellowship, and developed a relationship that has resulted in a dormitory, a church and a school.
"What you can do on the other side of the world with a few dollars is mind-boggling," he said.
The coffeehouse fits in, Reeves said, because it also will help people develop relationships with God.
"People have a negative image of church," he said. "We're trying to help people get to heaven and have an abundant life on top of it."
Contact the reporter at mike.clancy@arizonarepublic.com or at (602) 444-8550.
Casavant 1 carot dimonds. lol the "Casavant" brand name
===================================================
"They have entered into the NHRA racing to get exposure as a mining
company to show company strength and to boost investments. Urban explained. "I
saw an opportunity where aligning myself with drag racing would have benefits
to all of our thousands of shareholders. Not only does it get the word out
about the exact work we do, we think it will also help attract additional
investors." In addition the company will merchandise purchased diamonds under
the "Casavant" brand name. "
http://groups.google.com/group/alt.invest.penny-stocks/browse_thread/thread/ac497f89fd6c8aec/eb955c2...
CMKX) CMKD Diamonds Inc. Information
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DHorton42 View profile
More options Apr 20 2004, 5:11 pm
Newsgroups: alt.invest.penny-stocks
From: dhorto...@aol.com (DHorton42)
Date: 20 Apr 2004 21:10:36 GMT
Local: Tues, Apr 20 2004 5:10 pm
Subject: (CMKX) CMKD Diamonds Inc. Information
Reply to author | Forward | Print | Individual message | Show original | Report this message | Find messages by this author
Hello,
I tried posting this information yesterday, but was having problems with
this message base. So here it is again..
Here is some information that I have found researching CMKM Diamonds Inc. I
hope this will put to rest some of the rumors that have been floating around
that have no merit, and is useful to those that are thinking about investing in
CMKX. Personally I love this stock.. I like the idea of owning shares in a
diamond mining operation.. and this stock looks promising to me. Who knows were
it will be in 15 years. But one thing about it once they do take off it will
never be this cheap to get in again.
CMKM Diamonds, Inc. is a small company based in Las Vegas publicly
traded in the over-the-counter securities markets. Being located in the United
States gives the company access to the money needed for its planned drilling.
They hold mineral claims to more than 1.9 million acres rich with
diamondiferous kimberlite deposits. They have acquired professional Geologists
and Geophysicists and have obtained good financial backing. Have recently
purchased their own drill rig and have begun drilling in the Kimberlite Pipes
region in Saskatchewan, Canada. Company Web Page http://www.casavantmining.com/
Canadian Urban Casavant doubles as President and CEO. “I’ve
been at this prospecting and claiming land for about 15 years now. So I’ve
been chasing this for a long time, and it’s finally all going to come
together.” Urban Casavant
The Kimberlite Pipes region which is near Prince Albert, Saskatchewan, and
which the CMKM company owns mineral rights to, is regarded as one of the most
promising sites in the world. Casavant named the Kimberlite Pipe currently
being drilled for core samples after his wife Carolyn (He wouldn't have named
it after his wife unless he was sure that it was diamond-ferrous.) Recently
CMKM Diamonds Inc. Announced that the drilling in the 'Carolyn Pipe' is at 900+
Feet and Still in Kimberlite
They have been retiring authorized shares of stock that the company has
on hand, to help strengthen the company. O/S (outstanding shares) cannot be
retired unless the company first purchases those from stockholders.
They have entered into the NHRA racing to get exposure as a mining
company to show company strength and to boost investments. Urban explained. "I
saw an opportunity where aligning myself with drag racing would have benefits
to all of our thousands of shareholders. Not only does it get the word out
about the exact work we do, we think it will also help attract additional
investors." In addition the company will merchandise purchased diamonds under
the "Casavant" brand name.
So far everything has been done that needs to be done to produce
profits in the long term. They have the fundamentals that a mining company
needs to sustain growth and obtain a world presence as a legitimate mining
company. For the past two years they have accomplished everything that has been
disclosed in PR's and news releases.
They have been paying dividends in the form of shares, 1 share for each
share held. The last time dividends were paid Oct. 3, 2003.
CMKM stocks is listed in the Pink Sheets which is regulated by the
NASD. If CMKM were releasing false PR's as has been rumored. They would be
fined and trading halted at once.
What CMKM Diamonds Inc. needs right now is a diamond strike. I believe
that with the volume that we have been seeing the past few days, that news of a
diamond strike will cause this stock to increase a small percentage. On the
other hand, if it doesn't, than that might be an indication that we are in for
a long, long wait before this stock ever goes anywhere.
My plans for this one, is to purchase 10 million shares to hold long
term, and an additional 10 million or so to sell at any sizeable profit to be
made. Your comments are welcome, and if you have any information to share about
CMKX I would appreciate it greatly..
L8ter
Dan
The Conspiracy Widens http://garyweiss.blogspot.com/
Former SEC Lawyer Fights SEC Suit
Miriam Rozen and Brenda Sapino Jeffreys
Texas Lawyer
06-25-2007
Phillip Offill Jr. has refused to do work for some prospective clients -- but maybe not enough of them.
"There are probably some I should have turned away that I didn't," says Offill.
The Dallas lawyer, who earlier this year started a solo practice, was named as a defendant in a civil complaint filed by the U.S. Securities and Exchange Commission on June 14 in the U.S. District Court for the Eastern District of Michigan.
The 48-year-old former SEC lawyer until recently was chairman of the securities section at the Dallas-based firm now known as Godwin Pappas Ronquillo.
In Securities and Exchange Commission v. Peter W. Fisher, et al., the SEC alleges that Offill participated in a "scheme" with others to issue stock unlawfully without disclosing a company's financial problems.
In the SEC's complaint in SEC v. Fisher, the federal government alleges that Offill controlled investment companies that made "sham" purchases of penny stock. Those purchases, the SEC alleges, were made to help a company, owned by Canadian Peter W. Fisher, avoid registration requirements with the SEC.
According to the SEC's Web site, penny stocks generally refer to low-priced, speculative securities of very small companies.
In its complaint, the SEC alleges the intermediary investment companies, some of which the agency alleges were controlled by Offill, improperly evaded registration by claiming that they intended to purchase the shares for "investment purposes" and that they had no intention to sell the shares. But, the complaint states, "these companies were not long-term investors" and instead Offill and his co-defendants arranged for "the quick transfer of the vast majority of shares to Peter Fisher, his family, his investment company or his business associates." Fisher, the SEC alleges, then subsequently sold a large number of shares to the public without disclosure of any important information about the company.
The SEC complaint alleges that the company did not disclose its unsuccessful business operations and its faltering finances and instead dispatched misleading press releases touting the company's economic prospects.
In the complaint, the SEC claims Offill and others violated §§5(a) and 5(c) of the Securities Act of 1933 for the unregistered offer and sale of securities.
The SEC seeks to bar Offill from participating in any future penny stock offerings and seeks a judgment requiring him to pay civil penalties for his alleged violations of securities laws.
Offill, who says he has not yet been served with the SEC's complaint nor hired a lawyer to defend himself, says, "I don't think I have anything to hide."
"Do I think the allegations against me are indefensible?" Offill asks and answers: "Absolutely not. And if I have to, I will go to court to defend myself. I deny any role or involvement in any manner of promotional scheme, pump and dump or whatever. I was simply an attorney representing a client, and I intend to vigorously defend myself."
The SEC defines "a pump-and-dump scheme" in a proposed rule it published on April 21, 2004, in the Federal Register: It involves using shell companies to mislead investors and having promoters pump up the price of a stock through unduly positive press releases.
The SEC complaint says Fisher lives in Ontario. An online search of a Canadian telephone directory resulted in a listing for one Peter W. Fisher in Ontario. A man at that number declines to confirm that he is the Peter W. Fisher named in the complaint. The court file lists no defense attorney for Fisher.
Offill's friends and former colleagues are puzzled -- and in one case, downright shocked -- by the SEC's allegations.
How could a former regulatory lawyer become entangled in allegations of violating the very rules governing securities that he used to enforce?
Richard Hull, a former partner in the firm then known as Godwin Gruber who is a friend of Offill's, says he is very surprised his former colleague is a defendant in SEC v. Fisher.
"I'd do anything I can to help him," says Hull, who practiced with Offill at Godwin Gruber before returning to Hull & Associates, a firm he had launched 20 years ago. "He's a smart guy, and he is an ethical guy. I've known him for 15 years. I find it hard to believe he would cross over either line -- ethical or legal," Hull says about Offill.
Dallas lawyer Keith Langley, who left the firm then known as Godwin Pappas Langley Ronquillo in March to start Dallas' Langley Weinstein Hamel, says, "There was a belief at the firm about Phil that things were fine. He was doing what he was supposed to do in an area where he had a particular expertise."
Godwin Pappas is not a defendant in SEC v. Fisher.
Offill is a smart lawyer, says Spencer Barasch, a partner in Andrews Kurth in Dallas who was once Offill's boss at the SEC.
While at the SEC, Offill handled civil suits alleging that defendants participated in Ponzi schemes or scams in the oil patch. He also handled suits alleging that small brokerage firms violated securities laws, Barasch says. In addition, says Barasch, Offill handled a number of suits alleging unlawful sale of penny stocks.
Barasch, who is a former associate director for the SEC in Fort Worth, Texas, and head of enforcement in the Southwest, worked with Offill at the SEC when they were both trial lawyers and later supervised him.
"He was very effective, very sharp, very good at putting a stop to these types of scams, a real strong aptitude for that," says Barasch, referring to the kind of suits Offill handled while at the SEC.
After earning his law degree from the University of Oklahoma in 1983, Offill went immediately to work for a state agency enforcing the securities laws -- the Oklahoma Department of Securities -- where he later became chief counsel, he says.
In 1985, Offill, a Texas native, went to work for the SEC in Fort Worth, starting as a staff lawyer and eventually becoming a senior trial counsel.
In 1999, he left the SEC to join Dallas-based Krage & Janvey, a six-lawyer firm, where Offill says he parlayed the firm's securities transactional clients into litigation clients and then back again.
In early 2003, however, management at the much larger firm then known as Godwin Gruber, which was expanding at the time, approached him, Offill says.
"They asked me nice. They had an interesting case for me to work. And they offered me a whole bunch of money," Offill recalls about the offer.
But shortly after he started at the firm, Offill says, he realized that the firm's heavy emphasis on litigation meant it didn't have a base of clients looking for lawyers for securities transactional work. The firm's large corporate clients came to the firm exclusively for litigation matters. So, Offill says, he started to develop his own base of clients seeking transactional work, typically smaller companies.
"I do the work that my clients bring me," says Offill. "You're not going to start with a big old thumper of a corporate client. The best way is to start with a smaller company, to find a company that you can grow with."
Neither Don Godwin, the chairman and CEO of the firm now known as Godwin Pappas Ronquillo, who was in New York, nor its managing partner Marcos Ronquillo, who was out of the country, responded to two telephone calls to each of their offices seeking comment for this story.
As Offill entered the private practice world, his former government colleague Barasch says he was not surprised to see the one-time SEC lawyer defend companies and individuals from SEC investigations, since many former government lawyers make that same transition.
Hull, too, says he is not surprised that Offill agreed to represent penny-stock-related clients. Any former securities regulator who goes into private practice, says Hull, will usually encounter penny-stock promoters seeking their counsel. "These guys always come to you. I have had those kind of clients," he says.
But Hull, who considers himself a close friend of Offill, says, "It is fair to say that there are a lot of abuses going on" in the penny stock area, in terms of violations of the securities laws by companies not disclosing in specific enough terms the financial and economic conditions of concerns they are promoting to investors.
"You can do it right, but, in general, the industry is weighted in favor of abuse," Hull says.
For his part, Offill makes no apologies for representing smaller companies seeking access to the public markets.
"There are thousands of companies who require and deserve access to the public markets. They are the foundation of the American economy. They require competent legal counsel," he says.
Hull says he would be surprised if allegations made in the SEC complaint turn out to be true.
EARLIER SUIT
Offill has been sued before in connection with his work for another penny stock client.
In Consolidated Sports Media Group v. Godwin Gruber, et al, filed in the 101st District Court in Dallas County, the plaintiffs, former clients of Offill, allege in their third amended petition that he helped forge and falsify corporate records to evade SEC regulations. In their third amended petition, the plaintiff, Consolidated Sports Media Group, and the plaintiff-in-intervention, Scott Schepper, who is president of CSMG, also allege Offill concealed conflicts of interest and lied to the SEC in connection to his work for them.
In the third amended petition, CSMG and Schepper allege that Offill and others conspired to carry out an illegal "pump and dump scheme" whereby they, or entities controlled by them, illicitly bought and sold stock in CSMG and made millions of dollars in a few months but left CSMG crippled by financial and legal problems. The third amended petition alleged, among other things against "Offill and Godwin Gruber n/k/a Godwin Pappas Langley Ronquillo," claims of legal malpractice, breaches of fiduciary duty and common law and statutory fraud.
The defendants denied the allegations.
Richard Sayles, a partner in Dallas' Sayles Werbner, who defended the firm and Offill in the case, which settled about two months ago, says his clients have denied the allegations and continue to do so.
Offill specifically denies the allegations, saying that, although he settled, he still considers the allegations in the CSMG suit to be outrageous and wrong.
After the suit was filed, Darrell Jordan Jr., who was managing partner of the firm then known as Godwin Pappas Langley Ronquillo, said, "We'll contest the matter vigorously, and we expect to prevail. "
When the plaintiffs settled with Offill and the firm, all sides agreed to keep the terms confidential, according to lawyers on both sides: Sayles and Jennifer Stephens, of counsel with Sifford, Anderson & Co. of Dallas, who represented CSMG.
CSMG also previously settled with other defendants, the two attorneys say.
The third amended petition, filed in October 2006, did make some additional allegations about Offill. The plaintiffs allege in the petition that, when asked by his then-managing partner Jordan to turn over CSMG's and Schepper's file to the plaintiffs, Offill failed to do so and instead sent it to the home of a co-defendant in the case. In turn, the co-defendant had the documents "deep six[ed]" or "caused to be thrown into a trash Dumpster," the amended petition alleges.
As alleged in the petition, a private investigator working for the plaintiffs was able to retrieve the documents from the Dumpster. Those documents ultimately helped the plaintiffs bolster allegations that Offill forged alternative documents, the petition alleges. The plaintiffs allege they identified the forged documents only because they had acquired originals from the Dumpster.
Offill says the allegations are absolutely false. He says he believes the documents were actually stolen from an office.
Langley says the firm's management, including Jordan, who was managing partner during the course of that litigation but left the firm on June 1, and Godwin were caught totally off guard by the Dumpster-related allegations.
"They had no part in those shenanigans," Langley says about Jordan and Godwin.
Jordan, who is officing temporarily at Webb & Ackels in Dallas, did not return a telephone message seeking comment before press time.
Overall, Langley says, Offill is "a well-intentioned person that got on a slippery slope." Langley says Offill may have seen penny stock transactions "as an opportunity to increase his volume of business."
Historically, the firm now known as Godwin Pappas Ronquillo has and continues to reward rainmakers and docks those who can't drum up the billable hours, Godwin has said previously.
The firm management has regularly pruned partners and associates who it deemed not profitable enough. By doing so for years, the firm maintained its profits per partner at levels that towered over most other Texas firms, coming in at $2.214 million in profits per partner in 2004, but PPP dropped to $625,000 in 2005 and $500,000 in 2006, according to several of 's annual reports on firm finance.
Offill says, however, he never had trouble meeting his hourly billing targets at Godwin Pappas and left the firm in January to "pursue other business opportunities." He opened the Law Offices of Phillip Offill Jr. in January.
http://www.law.com/jsp/article.jsp?id=1182503150562
( GARY WAYNE WALTERS)
( 2998 BEL AIR DRIVE)
( LAS VEGAS NEVADA 89109)
( 702-732-2413)
Appellant, In Propria Persona
(DISTRICT COURT 11)
HONERABLE JUDGE ELIZIBETH GONZALES
JUDGMENT/DECREE TO BE APPEALED WAS ENTERED
AUGUST 28TH, 2006
_EXXCODE INC
RICHARD TAULLI
PLAINTIFFS_____________________)
_______________________________) No.(03-A-474992- (WHICH JUDGMENT TO BE
_______________________________) APPEALED WAS ENTERED)
GARY WAYNE WALTERS ____________)
DEFENDANT,___________________ _)
_______________________________) NOTICE OF APPEAL
_______________________________)
_______________________________)
_______________________________)
NOTICE IS GIVEN that ( GARY WAYNE WALTERS ) hereby Appeals from the District Court 11 Honorable Judge Elizabeth Gonzales pursuit to her order of judgment in favor of Plaintiff and where by this NOTICE OF APEAL is in compliance with all NRS Statues and is timely filed herein.
Therefore , Gary Wayne Walters hereby files this notice September 1ST , 2006 and states that he is preparing an appeal to the Honorable Judges decision that she awarded Plaintiff Richard Taulli / Exxcode Inc. Plaintiffs “ ISSUED JUDGEMENT IN ERROR”.
An unjustly amount of judgment of $2.1 million dollars plus attorney fees etc . when in fact Richard Taulli /Exxcode Inc. failed to tell the court that they had forward split the stock of EXXCODE INC 50 to 1 shares for them to take advantage of innocent persons in the Acquisition merger with a publicly held corporation named MicroSignal Corp whereby defendant Gary w Walters was not an officer , director , or controlling shareholder , and had no say as to the actual merger between the parties ,
However once defendant discovered that the Plantiffs was creating the “BOX JOB” defendant terminated their employment as BBX EQUITY MEMEBRS for their illegal and questionable activities and one of the parties Shawn Hackman a securities attorney whom worked for the BBX was fired as well who was caught with Richard Taulli three days after Mr. Shawn Hackman was fired, he was indicted by the honorable Us attorney Danial G. Bogden 3 days latter and appointed to prosecute Mr. Hackman was Gregory Damm assistant to the US attorney .
Shawn Hackman was convicted and he pleaded guily to the “BOX JOB “ Whereby Rick Taulli and his attorney are involved in an elaborate scheme knowingly that they to are involved in one of the last “BOX JOBS” HACKMAN TAULLI, AND COOK AND DEVORAK both attorneys whom writes ghost work opinions for Hackman and both whom have benefited by creating and dumping free trading shares to a disadvantaged group of blindfolded public investors whom absolutely has know knowledge of their illegal BOXING OF THE STOCK and stealing the publics money resulting in massive losses by innocent investors and brokers as well. The criminal acts by these parties and circumventing and undermining the defendant and courts, their false filings and developing schemes that has caused the Honorable Judge Elizabeth Gonzales to error dramatically and allow this criminal activity to go unnoticed and she condoned their activities skillfully orchestrated by Thomas Cook attorney and co heart to Richard Taulli in committing and violating the dignity and peace of solvent people and the free enterprise stock markets..
Rick Taulli admitted to establishing his shareholder base of nominees etc in Exxcode Inc. a fabricated corporation purchased and set up by Mr. Cort Christi. This is what happened to RICK Taulli’s co heart Shawn Hackman whom has done many of these “BOX JOBS” and was caught outright by the defendant Gary W Walters and fired and again as previously mentioned Shawn Hackman the ring leader in this illegal scam of “BOX JOB’S” and the rest of them Brian Devorak , Rad berrett, and Rick Taulli WERE ALL FIRED AND Shawn Hackman was indicted 3 days latter ,
Rick Taulli , Brian Devorak and Rad Berrett was devising schemes to do many other companies this way and has continued to do so with SHYCORP , Minerals Mining , Gemm , and many other Taulli specials that are currently continuing to duke the innocent out of multi millions of dollars to this ongoing day..
There are not only raised questions of Jurisdiction Issues that the Court and Honerable Elizabeth Gonzales was confronted with by defendents legal counsel at the time and as her reaserch showed the court and judge had no Legal right to continue the hearing to prove up damages by the Plaintiff they had lost their rights for failure to pay the arbritiration fees in a timely manner and since arbritration fees are all that these arbritrators receive for their services the Ligislation and written into NRS STATUES THAT SAYS FAILURE TO NOT PAY YOUR ARBRITRATION FEES IN A TIMELY MANNER RESULTS IN THE FORFITURE OF ANY REMEDY EVEN THE VIOD OF JUDGEMENT AND VOIRDEIR.,
All prove up’s by Plaintiff and his attorney and co heart were no more than mere fabrications of the groups of bandits themselves complementing each others fabricated documents. It was Shawn Hackman whom prepared the S-4 Registration statement with the assistance of Rick Taulli and Mat Mchoney of the former CEO of Microsignal corp. and whom gave Rick Tauli 2 million free trading shares of Micro Signal Corp. and by which believed that Shawn Hackman or Devorak wrote the legal opinion to remove the legend on the stock so Rick Taulli dumped it for $160,000.00 dollars plus and latterly stole innocent public investors money and diverted it to himself and suspected the others got some as well .
Normally it is just a filing of an intent to file an appeal , but do to the circumstances surrounding these individuals whom are continuing to rob the public perhaps the Honorable Judge Mahan whom is familiar with this type of criminal activity could intervene immediately in this critical scam going on with these lawyers and financial planner Richard Taulli and reprimand this appeal to be immediately re –opened for new trial and seek all law enforcement agencies to immediately get involved and secure these bank accounts and assets that have been stolen from the innocent public ASAP and void the judgment by the Plaintiffs against the Defendant.
Here is a narrative in support of the issues FOR GRANTING AN APEAL TO DEFENDENT.
five defendants charged in August 2003 with participating in an elaborate corporate and securities fraud scheme in Nevada and elsewhere, pleaded guilty today before U.S. District Judge James C. Mahan, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
SHAWN HACKMAN, age 35, a former attorney from Las Vegas, pleaded guilty to one count of Racketeering Conspiracy and agreed to a Criminal Forfeiture (of property obtained through Racketeering). He is facing up to 20 years in prison and a $250,000 fine when he appears before Judge Mahan for sentencing at 9:00 a.m. on May 10, 2004.
On August 7, 2003, SHAWN HACKMAN and three other attorneys, Sean Flanagan, Daniel Chapman, Herbert Jacobi, and stock transfer agent James Farrell, were charged in a 64-count Indictment. The Indictment alleges that between 1994 and 1999, they participated in a scheme involving the creation and sale of fraudulent shell corporations, commonly known in the securities industry as "box jobs." A few of the shell corporations involved in the scheme included Professional Mining Consultants, Inc., Dream Team International, Inc., and K-9 Protection, Inc. These shell corporations were fraudulent because promoters obtained hidden control of the entire supply of the public company's securities creating a secret monopoly in which control of the shell corporation and its stock was concealed by the use of nominee officers, directors and shareholders. When a company's securities are secretly "locked up" by the promoters, it is not possible for free-market trading to take place. The promoters are able to push stock prices up arbitrarily by simply restricting the supply, and once the price is at the desired level, the promoters and their associates "dump" their stock holdings on the market causing an immediate crash of the price of the stock. The public buyers caught in the middle lose most or all of their investment.
HACKMAN admitted in his plea agreement that, from at least July 1995 to about November 30, 2001, he and co-defendants Sean Flanagan, Daniel Chapman, Herbert Jacobi, James Farrell, and others known and unknown, were members of a criminal organization whose members engaged in securities fraud, money laundering, wire fraud, mail fraud, interstate transportation of stolen securities and receipt and sale of stolen securities for the purpose of enriching the members and deceiving the Securities and Exchange Commission.
In addition to the creation of shell corporations and installation of nominee officers and directors, HACKMAN admitted that the scheme involved among other things:
• fabrication of corporate records and stock records;
• mergers of the shell corporations with private companies,
• formation of companies in the Bahamas to cover up the fraud;
• Retaining of attorneys to issue false and misleading legal opinions indicating that the stocks of the shell corporations were freely tradable pursuant to federal securities laws, when in fact, they were not.
HACKMAN also admitted that another Las Vegas resident, Peter Berney, hired him and the other attorneys to issue false and misleading legal opinions, caused the nominees to be installed, and arranged for the mergers of the shell corporations with the private companies.
Investigators determined that Peter Berney and numerous other individuals were involved in the creation and sale of over 60 boxed companies between 1994 and 1999 for proceeds in excess of $35 million. Peter Berney, his wife Rebecca Berney, and another Las Vegas resident, Robert Potter, were indicted in July 2001 and charged with Money Laundering Conspiracy. Potter pleaded guilty and the charges against Rebecca Berney were dismissed following successful completion of a pretrial diversion program. Court information regarding Peter Berney is sealed.
HACKMAN is released on a personal recognizance bond pending sentencing.
Co-defendants Sean Flanagan, Daniel Chapman, Herbert Jacobi, and James Farrell are currently scheduled for trial on June 15, 2004.
This case is being investigated by Internal Revenue Service-Criminal Investigation and the FBI's Organized Crime Squad, and is being prosecuted by Assistant U.S. Attorney J. Gregory Damm.
IN LIEU OF FACTUAL EVIDENCE PRESENTED IN SEVRAL CASES INVOLVING CONVICTED FELLON SHAWN HACKMAN AND NOW DISCOVERING THE SAME BOX JOB WAS DONE WITH EXXCODE BY RICHARD TAULLI BRIAN DEVORAK, THOMAS COOK CO CONSPIRECY KNOWINGLY SHELTERING THE TRUE INDUCEMENTS AND CONCLUSSIONS OF ONGOING CRIMINAL ACTIVITIES
DEFENDANT PARAYS THAT THE COURT OF APPEALS ACCEPTS THIS ECEPTION TO THE NORMAL DELAYS AND FILINGS OF THE APEAL ITESLF AND ORDER THAT EVEIDENCE IS STRONG TO WARRANT THE VOID OF JUDGEMENT AGAINST THE DEFENDANT AND THAT DEFENDANT INJOINS IN BECOMING A MATERIAL STATES WITNESS AGAINST THESE UNLAWFUL PERPRETRATORS OF FRAUD THEFT AND DECIET. AS THEIR NAMES AND THEIR OWN ADMISSIONS OF THIS TYPE OF ACTIVITY GOING ON WITH THE DESIGN OF EXXCODE INC, BY HACKMAN AND TAULLI TO DEFRAUD THE INNOCENT PUBLIC AND NOW THE HONERABLE COURT OF ELEIZIBETH GONZALES WHOM RICK TAULLI IS NOW MAKING A MOKERY OF ON A CHAT BOARD “RAGING BULL”
AGAIN ALL OF THIS CRIMINAL CONDUCT THE APEALS COURT IMMEDIALY RESPONDS TO THIS NOTICE OF APEAL AND ACCEPTS THE EXCERSISE OF ITS CITICENSHIP AS AN US CITIZEN AND LIVING AND CONDUCTING BUSINESS WITHIN THE STATE OF NEVADA BORDERS HUBLY PRAYS THAT THE QUARUM OF JUDGES FOR THE APPELATE COURTS TAKES IMMEDIATE ACVTION TO STOP THIS ONGOING CRIMES.
DEFENDANT WILL COPERATE FULLY AND WILL SEEK ANY AND ALL PUNITVE DAMAGES AND OTHER AFFORDED RIGHTS AS THEY BECOME APPARENT.
THEREFORE , DEFENDANT HUMBLY PRAYS THAT THE COURTS AT THE HIGHEST LEVEL NOW TAKE LEGAL ACTION AND SET THE MATTER FOR REHEARING AT THE SAME TIME RECOMMEND TO THE ATTORNEY GENERAL APPROIATE LEGAL CRIMINAL CHARGES AND PROSECUTION AGAINST THE PLANTIFF AND ALL HIS CO CONSPIRITORS NOW.
I HEREBY AFFIRM THAT THE STATEMENTS AND INFORMATION I HAVE AFFIRMED HEREIN IS TRUE AND ACCURATE.
IN PROER PERSON
GARY WAYNE WALTERS
APPELLANT/ PROSE
Las Vegas Judge Rules Michael Jackson May Get Belongings Back
July 16, 2007 05:44 PM EDT
Michael Jackson may get his belongings back after a decision was made in court Monday. A judge ruled that the business, Universal Express, was in contempt of court and must return the items.
Universal Express held an auction in May for a collection of Jackson family materials it had previously purchased, but the company held some items back.
Jackson now faces another court date with Universal Express Friday in New Jersey. If the judge rules in favor of Jackson, he will get his belongings back next week.
http://www.klas-tv.com/Global/story.asp?S=6796552
Mark Faulk's penny stock investing history. Maybe he could tell us all which companies he had invested in on his next radio show for full disclosure? What ever happened to the listed on the Berlin exchange without permission penny stock promotion scam?
"EDITOR's note: I own small positions in eleven OTC companies (less than $1,200.00 invested in each company), which I have held without buying of selling since the beginning of this series of articles. After posting this article, I checked the Berliner Freiverkehr list to see if any of those companies were listed. Of the eleven, ten were on the list, two who have already begun the delisting process, and eight who didn't have a clue that they were listed on the Berlin-Bremen Stock Exchange, didn't give their permission, and weren't notified by Berliner Freiverkehr. That's how prevalant this problem is, and how much work remains to be done. I am in the process of contacting those companies right now."
================================
Commentary - Jun 20, 2004 - Printable Version
- A Call To Arms: Firing The First Shots
by Mark FAULK
The privately owned JMC, headed by Noel Frenzel and James (Jay) McFadden, had been incorporated in Nevada just four months prior to the transaction with Juina.
Mr. Frenzel, who was 35 years old at the time of Juina's last regulatory filing, had spent eight years as the operator of a California towing company and five years as a principal of Industrial Equipment Locators before moving to Reno, Nev., and co-founding JMC.
The 36-year old Mr. McFadden worked as a mortgage officer with a California company before joining Laughlin Associates Inc. of Carson City, Nev., as vice-president of sales "responsible for the implementation of corporate infrastructures for emerging corporations."
With this pool of executive experience, noticeably lacking in anything related to mining or exploration, privately owned JMC executed an asset purchase agreement with a private Brazilian company, Mineracao Juina Mirim Ltda., on Nov. 7, 1997.
Under the terms of the agreement inked just a month before JMC was folded into Juina, JMC acquired a 70-per-cent working interest in Property 1000 from Mineracao Juina in exchange for 4.5 million shares. Those 4.5 million shares were exchanged for an equal number of restricted shares of Juina when the public company acquired JMC and its 70-per-cent stake in Property 1000 on Dec. 12, 1997.
Following the paper shuffle, Mr. Frenzel took on the roles of president, secretary and treasurer of Juina. Mr. McFadden rounded out the company's rather short list of officers and directors, joining Mr. Frenzel as a director. Together, they headed a company with 1,600 listed shareholders and approximately 16.4 million shares outstanding as at Sept. 24, 1999.
Evidently virtually penniless Juina had high hopes for the property it acquired in the cashless double-shuffle.
According to the Oct. 1, 1999, SEC filing, the company anticipated recovering 4.55 million carats valued at $90.6-million and sponging up more than $40-million in retained earnings in the first five years. Juina's 20-year projections envisioned the recovery of 22.55 million carats valued at $451-million and retained earnings of more than $227-million.
Alas, that was the company's last regulatory filing, leaving a considerable gap with respect to information regarding the company's operations, financial condition, share structure and so on.
At least some of that gap can be filled with snippets gleaned from archived news releases and from regulatory filings by other companies that have had dealings with Juina during the intervening years.
http://www.marketmillionaires.com/hot-micro-cap-stock-picks-under-1-00/1335-cmkm-diamonds-fraud.html
45. Custable also engaged in a scheme to conduct a sham S-8 offering with Sharecom. Beginning in approximately October 2001, Custable offered to have Suburban Capital provide financing to Sharecom in exchange for options to purchase at least 165 million shares of S-8 stock. Custable informed Sharecom's former president, Brad Nordling ("Nordling"), that although Sharecom could not sell S-8 stock to Custable, Sharecom could obtain money from Custable by issuing options to purchase S-8 stock to individuals whom Custable would designate.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,
Plaintiff,
v.
FRANK J. CUSTABLE, JR., SARA WETZEL,
SUBURBAN CAPITAL CORPORATION,
FRANCIS SCOTT WIDEN, WASATCH
PHARMACEUTICAL INC.,
DAVID GILES, GARY HEESCH, PACEL
CORPORATION, DAVID CALKINS,
GATEWAY DISTRIBUTORS, LTD.,
RICHARD BAILEY, and THERMOELASTIC
TECHNOLOGIES, INC.
Defendants,
PINE SERVICES, LTD.,
Relief Defendant.
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CIVIL ACTION
FILE NO.
COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF
Plaintiff Securities and Exchange Commission (the "Commission") for its Complaint for Injunctive and Other Equitable Relief, states as follows:
NATURE OF THE ACTION
1. This case concerns an ongoing scheme to violate the registration, antifraud and reporting provisions of the federal securities laws. Defendant Frank J. Custable, Jr. ("Custable"), a recidivist securities law violator, has orchestrated the multi-faceted scheme from its inception in 2001 until the present. Custable's scheme has involved the securities of at least seven small public companies and has generated more than $4 million in ill-gotten gains.
2. Custable's scheme involves illegally obtaining large positions in penny stock issuers and then using nominees to engage in unregistered offerings of the stock, while fraudulently concealing Custable's interest in the stock. To carry out his scheme, Custable has used Defendant Suburban Capital Corporation ("Suburban Capital"), a company controlled by Custable that purports to provide financing and consulting services to small public companies, as well as Defendants Sara Wetzel ("Wetzel"), and Francis Scott Widen ("Widen"), two individuals who work for Custable at Suburban Capital. Custable has also used various other individuals as nominees to obtain stock for his benefit without disclosing his interest in the stock. Acting at Custable's direction, Suburban Capital, Wetzel, Widen and other nominees have repeatedly obtained large amounts of stock from penny stock issuers and then promptly sold the stock to the investing public in violation of the registration provisions.
3. A significant amount of the stock that Suburban Capital, Wetzel, Widen and others have obtained for Custable's benefit was fraudulently obtained. The fraud involved includes sham Commission Form S-8 registration statements, forged stock authorization forms, and at least one bogus attorney opinion letter arranged by Custable.
4. Custable, through various "straw men" consultants, has obtained stock by Commission Form S-8 registration statements, which state that the issuer may only issue S-8 securities to consultants in exchange for bona fide consulting services and not in connection with a capital-raising transaction. In the case of stock that Custable's straw men obtained from Defendants Wasatch Pharmaceutical, Inc. ("Wasatch"), Gateway Distributors, Inc. ("Gateway"), Pacel Corporation ("Pacel"), and ThermoElastic Technologies, Inc. ("ThermoElastic"), as well as from Sharecom, Inc. ("Sharecom"), the issuers either obtained little or no bona fide services in exchange for the stock, or issued the stock in connection with a capital-raising transaction. The Commission has named as defendants in this action certain officers of the issuers involved in the sham S-8 registration statements. The officer defendants are: 1) Gary Heesch ("Heesch"), and David Giles ("Giles") of Wasatch, 2) David Calkins ("Calkins") of Pacel, and 3) Richard Bailey ("Bailey") of Gateway.
5. In the case of Blagman Media International, Inc. ("BMII"), Custable, Suburban Capital and Wetzel engineered a scheme in which they forged share issuance authorizations so that they could obtain and liquidate approximately 5.4 billion counterfeit shares of BMII.
6. In the case of Sharecom, Custable arranged for a significant amount of restricted Sharecom stock to become unrestricted and freely tradable through an attorney opinion letter premised on the fiction that the stock was owed for work performed more than two years before.
7. In carrying out this scheme, Custable has meticulously avoided using his name wherever possible. Custable has concealed his interest in the penny stocks involved in this action by using Wetzel, Widen, Suburban Capital and various straw men to effect stock transactions on his behalf. Custable has done so because he is rightly concerned that shareholders would be suspicious of any company in which Custable, a recidivist violator of the securities laws, had a substantial interest. In going to such lengths to conceal his interest in the penny stocks, he has fraudulently evaded the reporting requirements of the federal securities laws, which require reporting by anyone with an interest in more than 5% of the outstanding stock of a public company.
8. Custable has consistently dumped on the unsuspecting investing public the shares that he has obtained through his confederates and other straw men. In order to liquidate the large stock positions accumulated on his behalf, Custable has enlisted the assistance of individuals and entities to send, by e-mail and fax, huge volumes of unsolicited stock newsletters to the investing public. The stock newsletters have touted the stock that Custable has accumulated and stimulated market demand for the stock that Custable has then dumped on the market. Custable has generally paid for this "spamming" of potential investors with stock that he has acquired-legitimately or illegitimately-from the various small issuers enmeshed in his scheme.
9. Custable has tightly controlled the ill-gotten gains from his scheme. He controls Suburban Capital's bank accounts, which is where Wetzel, Widen and the straw men that Custable has used generally direct proceeds from their stock sales. Custable has also directed at least $235,000 in proceeds from his scheme to offshore accounts and entities. Custable has also set up an entity in the offshore jurisdiction of Nevis, to shield his assets from recovery. Since at least June 2002, Pine Services, Ltd. ("Pine Services"), the relief defendant, has facilitated Custable's attempts to move assets beyond the reach of U.S. law enforcement by directing stocks and cash to bank accounts in Costa Rica.
10. By the above conduct, Custable has violated Sections 5(a), 5(c), 17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act of 1933 ("Securities Act"), Sections 10(b) and 13(d) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rules 10b-5, 13d-1 and 13d-2 thereunder. Suburban Capital and Wetzel have violated Sections 5(a), 5(c), 17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Widen has violated Sections 5(a) and 5(c) of the Securities Act.
11. The Commission is requesting emergency injunctive and other equitable relief against Custable, Suburban Capital, Wetzel and Widen. The Commission requests that the Court issue a temporary restraining order and preliminary injunction against them enjoining further violations of the federal securities laws. Given the continuous nature of their illegal conduct, emergency injunctive relief is appropriate. The Commission further requests that the Court grant other emergency equitable relief against them, including an order requiring them to provide accountings, freezing their assets, prohibiting them from destroying or concealing documents and requiring them to repatriate assets to the U.S. The Commission further requests that the Court impose a temporary, preliminary and permanent penny stock bar against Custable and Suburban Capital, and bar them from further trading of securities during the pendency of this action. The Commission requests this equitable relief based on Custable's orchestration of a long-running and brazen scheme to violate the federal securities laws. The Commission also requests that the Court impose a permanent penny stock bar against Wetzel and Widen. The Commission further requests permanent injunctive relief, disgorgement, civil penalties and penny stock bars against Custable, Suburban Capital, Wetzel and Widen based on their conduct in this scheme.
12. The Commission requests disgorgement from relief defendant, Pine Services because it has been unjustly enriched through its receipt of ill-gotten gains from the scheme. The Commission further requests emergency equitable relief against Pine Services, including an asset freeze and repatriation order, as well as an order requiring a detailed accounting from Pine Services of its assets and for the transactions that are the subject of this action, and an order prohibiting Pine Services from destroying or concealing documents that are relevant to this action.
13. By the above conduct, Wasatch, Heesch and Giles have violated Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act. The Commission requests that the Court permanently enjoin Wasatch, Heesch and Giles from further violations, order them to pay disgorgement and civil penalties and enter an officer and director bar against Heesch and Giles. The Commission further requests that the Court impose a permanent penny stock bar against Heesch and Giles. As part of the requested temporary restraining order, the Commission seeks to have the Court require Wasatch, Heesch and Giles to provide an accounting of their assets and for the transactions that are the subject of this action and to be prohibited from destroying or concealing documents relevant to this action.
14. By the above conduct, Pacel, Calkins, Gateway and Bailey have violated Section 17(a) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act. The Commission requests that the Court permanently enjoin Pacel, Calkins, Gateway and Bailey from further violations, order them to pay disgorgement and civil penalties and enter a officer and director bar against Calkins and Bailey. As part of the requested temporary restraining order, the Commission seeks to have the Court require Pacel, Calkins, Gateway and Bailey to provide an accounting of their assets and for the transactions that are the subject of this action and to be prohibited from destroying or concealing documents relevant to this action.
JURISDICTION
15. The Court has jurisdiction over this action pursuant to Sections 20 [15 U.S.C. §77t] and 22 of the Securities Act [15 U.S.C. §77v] and Sections 21(d)[15 U.S.C. §78u(d)] and 27 of the Exchange Act [15 U.S.C. §78aa].
16. The defendants have, directly and indirectly, made, and are making, use of the mails, and of the means and instrumentalities of interstate commerce, in connection with the transactions, acts, practices and courses of business alleged in this Complaint.
17. There is a reasonable likelihood that the defendants will, unless enjoined, continue to engage in the transactions, acts, practices and courses of business set forth in this Complaint, and transactions, acts, practices and courses of business of similar purport and object.
THE DEFENDANTS
18. Suburban Capital Corporation, is a Delaware corporation headquartered in Addison, Illinois. Suburban Capital purports to provide financing and consulting services to small public companies. Custable runs the operations of Suburban Capital. Many of the nominees used to accumulate stock for Custable's benefit were either employed by Suburban Capital or did consulting work for Suburban Capital. Throughout the scheme alleged in this action, Suburban Capital accumulated stock for Custable's benefit and took control of the ill-gotten gains generated by the scheme.
19. Frank J. Custable, Jr. is a resident of Glendale Heights, Illinois. Custable is the president of Suburban Capital and has also identified himself as its secretary. Custable was a registered representative with various broker-dealer firms until February 1992. Custable has a significant disciplinary history in the securities industry. In 1994, as part of a Commission action, Custable and F.C. Financial Corp. ("F.C. Financial"), an entity that he operated and controlled, were permanently enjoined from violating the antifraud provisions of the Securities Act and the Exchange Act and ordered to pay disgorgement of $324,970 and a civil penalty of $60,000. The prior Commission action resulted from a fraudulent offering involving mortgage-backed promissory notes. In 1994, as a result of the Commission enforcement action, the State of Illinois entered an order permanently prohibiting Custable and F.C. Financial from offering or selling any securities in Illinois and fined him $10,000. In 1992, the NASD censured Custable, barred him from association with any member firm, and fined him $20,000 as a result of his execution of unauthorized trades in customers' accounts and guaranteeing a return on the investments he sold to customers. In 1991, the State of Indiana ordered Custable to cease and desist from committing violations of the Indiana Securities Act and ordered him to pay a $15,000 civil penalty and $11,000 in restitution for fraud and other misconduct related his sales of investments. In 1992, the State of Wisconsin entered a Summary Order of Prohibition and Revocation of Exemptions against Custable for his failure to disclose his disciplinary history and other misrepresentations related to his sale of mortgage-related investments.
20. Sara Wetzel ("Wetzel") is a resident of Glenview, Illinois. Wetzel, like Custable, has identified herself as the president and secretary of Suburban Capital. At times relevant to this action, Wetzel was Custable's primary assistant at Suburban Capital and supervises its administrative staff. According to S-8 registration statements filed with the Commission, Wetzel has supposedly provided consulting services to Sharecom, Wasatch, and Pacel in exchange for S-8 stock.
21. Francis Scott Widen ("Widen") is a resident of Buffalo Grove, Illinois. At times relevant to this action, Widen was the head of Suburban Capital's "mergers and acquisitions department" and supervises the consultants who work for Suburban Capital. According to S-8 registration statements filed with the Commission, Widen has supposedly provided consulting services to Sharecom and Pacel in exchange for S-8 stock.
22. Wasatch Pharmaceutical, Inc. ("Wasatch") is a Utah corporation headquartered in Murray, Utah. The securities of Wasatch are registered with the Commission pursuant to Section 12(g) of the Exchange Act and are quoted on the OTC Electronic Bulletin Board, under the symbol WSCH. Wasatch purports to be engaged in designing, manufacturing, and marketing pharmaceutical and dermatological products.
23. Gary Heesch ("Heesch") is the Chief Executive Officer and a director of Wasatch and a resident of Utah.
24. David Giles ("Giles") is the Chief Financial Officer and secretary of Wasatch and a resident of Utah.
25. Pacel Corporation ("Pacel") is a Virginia corporation headquartered in Manassas, Virginia. The securities of Pacel are registered with the Commission pursuant to Section 12(g) of the Exchange Act and are quoted on the OTC Electronic Bulletin Board, under the symbol PCEL. Pacel purports to be a software development and systems integration company.
26. David Calkins ("Calkins") is a resident of Amissville, Virginia and is the president and a director of Pacel.
27. Gateway Distributors, Ltd. ("Gateway") is a Nevada corporation headquartered in Las Vegas, Nevada. The securities of Gateway are registered with the Commission pursuant to Section 12(g) of the Exchange Act and are quoted on the OTC Electronic Bulletin Board under the symbol GTWY. Gateway purports to market and distribute nutritional and health supplements.
28. Richard Bailey ("Bailey") is a resident of Las Vegas, Nevada and is the president, Chief Financial Officer, and a director of Gateway.
29. ThermoElastic Technologies, Inc. ("ThermoElastic") is a Colorado corporation headquartered in Fox Island, Washington. The securities of ThermoElastic are registered with the Commission pursuant to Section 12(g) of the Exchange Act and are quoted on the OTC Electronic Bulletin Board under the symbol TMRO. ThermoElastic purports to market and distribute dental care and other oral hygiene products.
FACTS
Custable and Suburban Capital's Relationship with the Issuers
30. From at least November 2001 to the present, Custable, through Suburban Capital, an entity that he controls, has been engaged in providing small public companies with financing and consulting services. The companies that have worked with Suburban Capital are very small public companies, typically with market capitalizations under $10 million. During the pendency of Custable's scheme, the stock of these companies generally traded at prices under $.10 per share, and frequently traded for less than $.01 per share. The stocks involved in this scheme are considered penny stocks. The stock of the companies involved in this scheme is quoted on the OTC Electronic Bulletin Board, which is a quotation service provided by the NASD.
31. Suburban Capital holds itself out to small public companies as a "one stop shop," capable of providing these companies with assistance in raising capital and other consulting services required by the small public companies. Although Custable controls Suburban Capital, he delegates various significant tasks to Wetzel and Widen. At times relevant to this action, Wetzel has served as Custable's primary assistant at Suburban Capital and acts as Suburban Capital's office manager. At times relevant to this action, Widen has served as the head of Suburban Capital's "mergers and acquisition department". In addition to Wetzel and Widen, Suburban Capital employed other consultants, including Robert Romine ("Romine"), James Carroll ("Carroll") and Paul Munnich ("Munnich"), to allegedly provide consulting services to the issuers identified in this Complaint. Where Custable has retained an individual to obtain stock on his behalf, such as Munnich, Carroll and Romine, the individual is referred to herein as a "straw man".
32. Through this relationship, Custable and Suburban Capital have obtained significant amounts of stock in the issuers identified in this Complaint.
33. One way that Custable has accumulated large positions in the penny stocks is through stock issued pursuant to a Form S-8 registration statement filed with the Commission by the issuer. Form S-8 registration is available to issuers who compensate their consultants in the form of securities, rather than cash. Small public companies use S-8 securities to fund their operations because they frequently do not have sufficient cash to do so. The instructions to Commission Form S-8 state that Form S-8 is available to register securities offered and sold to the issuer's consultants and employees "only if (i) they are natural persons; (ii) they provide bona fide services to the registrant; and (iii) 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..." Custable accumulated significant positions in the issuers by having individuals acting on his behalf, such as Wetzel and Widen, identified on Form S-8 registration statements as consultants to the issuers. Wetzel, Widen and Custable's straw men thus have received S-8 stock from the issuers and, at Custable's direction, they have either sold such stock or transferred it to Suburban Capital or to another entity or individual.
34. Another way that Custable has provided capital to issuers is through secured loans made by Suburban Capital to the issuers. Such loans have been secured by shares of the issuer's restricted stock, which are shares owned by one or more of the officers, directors or other persons affiliated with the issuer. Stock issued by a public company without the filing of a registration statement, and stock issued to the officers, directors, or other affiliates of a public company, is considered restricted stock at the time of its issuance. Restricted stock is restricted from resale or transfer pursuant to the federal securities laws. Restricted stock may be sold or transferred by the owner only upon the fulfillment of certain conditions, including a minimum time period for which the owner must hold the stock and limitations on the amount of restricted stock that can be sold during a certain time period. Certificates of restricted stock bear a restrictive legend that can only be lifted by the stock transfer agent. Transfer agents requested to lift the restrictive legend on restricted stock are required to assure themselves that it is appropriate to do so under the federal securities laws. Transfer agents generally do so by requiring an attorney opinion letter reflecting a legal opinion that it is appropriate to lift the restrictive legend. Custable has accumulated significant positions in the penny stocks involved in this scheme by foreclosing on the restricted stock pledged as collateral for loans made by Suburban Capital to the issuers. When Custable obtains restricted stock, he generally arranges for an attorney to provide to the issuer's transfer agent an opinion letter stating that it is appropriate to remove the restrictive legend from the stock certificates. Once the restrictive legend is removed, shares of stock may then be traded on the secondary market. Custable has used such stock as currency to fund his illegal enterprise.
Custable's Accumulation and Liquidation of S-8 Stock
The Accumulation of S-8 Stock
35. Between November 2001 to the present, Wetzel, Widen and the straw men, as well as entities controlled by Custable, including Suburban Capital, North Coast Investments, Inc., and Metropolitan Ventures, have obtained S-8 stock in Sharecom, Wasatch, Pacel, Premier Axium, Gateway, BMII and ThermoElastic.
36. Wetzel, Widen and the straw men received this stock purportedly in exchange for providing consulting services to the issuers. Wetzel, Widen and the straw men would execute consulting agreements with the issuers, under which they were supposed to provide the issuers with strategic and marketing consulting services.
37. Pursuant to these consulting agreements, the issuers would file Form S-8 registration statements with the Commission. The issuers would then issue the S-8 stock, or options to purchase S-8 stock, to Wetzel, Widen and the straw men. In the event that Wetzel, Widen or the straw men received options to purchase the issuer's S-8 stock, Custable and Suburban Capital would pay to exercise the option.
38. The issuer's S-8 stock issued to Wetzel, Widen and the straw men often represented approximately 10 to 30 percent of the issuers' issued and outstanding stock at the time of issuance.
The Sham Form S-8 Registrations
39. Custable, Suburban Capital, Pacel, Calkins, Wasatch, Giles, Heesch, Gateway, Bailey, and ThermoElastic engaged in a scheme to issue S-8 stock to the straw men for services of little or no value or in exchange for financing.
40. Between April and July 2002, Munnich acted as a straw man with respect to Form S-8 registrations for Wasatch, Gateway and ThermoElastic. During this time period, Munnich was employed by Suburban Capital in its "mergers and acquisitions" department. Custable decided to hire Munnich after interviewing him. Munnich is a high-school graduate who had experience working for a travel agency before going to work for Suburban Capital. At Suburban Capital, Munnich primarily made "cold calls" to private companies on behalf of Suburban Capital's public company clients. The purpose of these calls was to see if a private company was willing to be acquired by the public company in exchange for stock in the public company. When he worked for Suburban Capital, Munnich reported to Widen and Custable. Munnich quit working for Suburban Capital in July 2002, having never closed a merger or acquisition. He was paid approximately $10,000 in cash for his work at Suburban Capital.
41. Between April and July 2002, Munnich received approximately 380 million shares of Wasatch S-8 stock, 3.5 billion shares of Gateway S-8 stock, and 40 million shares of ThermoElastic S-8 stock. At the time the stock was issued, the Wasatch, Gateway, and ThermoElastic stock had a value of approximately $1.52 million, $4.25 million, and $1.76 million, respectively. The stock that Munnich received represented a significant amount of the issued and outstanding stock of Wasatch, Gateway and Thermo Elastic, as detailed in Exhibit 1. Under the consulting agreements with Wasatch, Gateway and ThermoElastic, Munnich was supposed to assist the issuers with short and long range strategic planning, help develop and implement a marketing program, assist in recruiting of marketing and sales personnel, and identify, evaluate, structure, negotiate, and close strategic alliances. Munnich was unqualified to perform most of these services.
42. The Form S-8 registration statements for which Munnich was identified as a consultant were shams. Munnich never provided any services to ThermoElastic. Thermo Elastic had previously agreed with Custable that it would issue the stock that it registered on Form S-8 in the name of Munnich in exchange for financing from Suburban Capital in the form of a restricted stock purchase agreement. In addition, Munnich worked approximately 5 hours under the two consulting agreements with Wasatch, and approximately 40 to 80 hours under his consulting agreement with Gateway. The little work that Munnich did for Wasatch and Gateway consisted of cold calling private businesses and inquiring whether they would be interested in being acquired by Gateway or Wasatch. Defendants Heesch and Giles signed the Form S-8 registration statements under which Munnich received Wasatch stock. Defendant Bailey signed the registration form under which Munnich received Gateway stock. In so doing, Heesch, Giles and Bailey falsely represented that Munnich was receiving securities for bona fide services and not in connection with a capital-raising transaction. Bailey, Heesch and Giles, as executive officers of small public companies, either knew at the time of the Form S-8 registrations, or were reckless in not knowing, that these representations were false.
43. Rather than provide ThermoElastic, Wasatch and Gateway with valuable services, Munnich acted as a straw man for Custable. Custable and Wetzel directed Munnich to transfer the stock that he received from ThermoElastic, Wasatch and Gateway to Suburban Capital and to individuals and entities associated with Custable and Suburban Capital. As a result, Munnich was merely a nominal consultant to the issuers and a nominal owner of the issuers' stock. Custable, through Suburban Capital, was the one with the real interest in the Thermo Elastic, Wasatch and Gateway stock issued in Munnich's name. For the most part, this stock was subsequently sold out of Suburban Capital's brokerage accounts.
44. Custable and Wasatch expressly agreed that the S-8 stock issued to Munnich was issued in exchange for financing. Specifically, the 380 million shares of Wasatch S-8 stock issued to Munnich was expressly in exchange for a $100,000 loan from Custable and Suburban Capital. In a letter from Giles to Custable on May 13, 2002, Giles described the $100,000 loan and the 380 million share S-8 issuance to Munnich as "one transaction."
45. Custable also engaged in a scheme to conduct a sham S-8 offering with Sharecom. Beginning in approximately October 2001, Custable offered to have Suburban Capital provide financing to Sharecom in exchange for options to purchase at least 165 million shares of S-8 stock. Custable informed Sharecom's former president, Brad Nordling ("Nordling"), that although Sharecom could not sell S-8 stock to Custable, Sharecom could obtain money from Custable by issuing options to purchase S-8 stock to individuals whom Custable would designate.
46. The capital raising arrangement agreed to by Custable and Nordling required Sharecom to issue options to purchase its S-8 stock to Wetzel, Widen, and another Suburban Capital consultant, Carroll, pursuant to three separate consulting agreements. On November 21, 2001, Sharecom issued to Wetzel and Widen an option to purchase 130 million shares of Sharecom's S-8 stock. Under the consulting agreements with Wetzel and Widen, the options to purchase 65 million shares of Sharecom stock had an exercise price of $.000923 per share. On January 4, 2002, Sharecom entered into a consulting agreement with Carroll. Under this consulting agreement, Sharecom issued to Carroll an option to purchase 35 million shares of its S-8 stock. Under the consulting agreement with Carroll, the option to purchase 35 million shares of Sharecom stock had an exercise price of $.003 per share. All of the options provided for in the consulting agreements with Wetzel, Widen and Carroll were immediately exercised, with Suburban Capital paying the exercise price. Custable also entered into a similar arrangement with Wasatch. Under this arrangement, Wasatch issued warrants to purchase its S-8 stock to Romine, Wetzel and Carroll in approximately January or February 2002. These warrants were exercised and the exercise price was received, directly or indirectly, from Custable and Suburban Capital.
47. Although Sharecom received some consulting services in exchange for the S-8 stock issued to Wetzel, Widen and Carroll, the primary purpose of the consulting agreements was to raise capital to maintain Sharecom's business operations. If Sharecom had not received financing in the form of the option exercise price, it would not have issued the options to Wetzel, Widen, and Carroll. Between November 2001 and April 2002, Sharecom received at least $212,995 directly or indirectly from Suburban Capital.
48. Custable also used Romine as a straw man for at least one S-8 registration statements. Romine is an independent contractor who has worked for Suburban Capital and its clients. In or about January or February 2002, Wetzel requested that Romine open up a brokerage account in which he could receive stock. In or about January or February 2002, Romine opened up the brokerage account as Wetzel requested and signed paperwork giving Wetzel the authority to sell and transfer stock out of his account.
49. Pursuant to a Form S-8 registration statement dated February 29, 2002, Romine obtained 33 million shares of Pacel. Romine did not provide any consulting services in exchange for the Pacel stock and was unaware that the Pacel stock was issued in his name until October 2002. This stock was sold out of Romine's brokerage account without his knowledge and the proceeds transferred into a bank account controlled by Custable. Calkins signed the Form S-8 registration statement on behalf of Pacel and thereby falsely represented that the Pacel stock was issued to Romine in exchange for bona fide consulting services and not in connection with a capital-raising transaction. Calkins knew, or was reckless in not knowing, that he made misrepresentations in connection with the Form S-8 registration involving Romine.
Custable Arranges for Spam Stock Newsletters to Create
Market Demand for the Stock He Accumulated
50. After accumulating large positions in the issuers' stock, Custable took steps to create market demand for the sales he intended to make. Custable primarily created market demand by hiring several individuals ("spammers") to prepare and widely disseminate e-mail and fax newsletters to the investing public. The newsletters touted the stock of the companies as good investments. Many of these newsletters appear to have had a significant market effect, generally corresponding to a significant increase in trading volume and, at times, a price increase.
51. Custable arranged for the spammers to be compensated in unrestricted stock and cash for preparing the newsletters. In many cases, the stock paid as compensation for the stock newsletters was originally issued to third parties as restricted stock, allegedly for services rendered over two years in the past. Without receiving anything directly in return, these third parties then transferred the restricted stock to the spammer, at the direction of Custable.
52. After directing the transfer of restricted stock to the spammers, Custable retained attorneys to prepare opinion letters stating that because the stock was issued for services rendered over two years in the past, the restrictive legend on the stock should be removed. The stock was then reissued in the name of the spammer, without a restrictive legend. The spammers then sold the stock.
53. In or about November or December 2001, Custable arranged for the restrictive legend on certain shares of Sharecom to be lifted based on a bogus attorney letter. In or about November or December 2001, Custable agreed with Nordling that Sharecom would issue 15 million shares of its stock to a so-called "friendly party", Thomas Wetzel (who is not related to Defendant Sara Wetzel). Because the stock Custable anticipated that Sharecom would issue to Thomas Wetzel would not be registered on Form S-8, Sharecom would be required to issue it as restricted stock. Custable, however, had devised a plan to instantaneously lift the restriction on the Sharecom stock to be issued to Thomas Wetzel, so that it could be sold in the secondary market. Under Custable's plan, Nordling had to fabricate a compensation dispute with Thomas Wetzel in which Thomas Wetzel demanded compensation for services that he provided to Sharecom more than two years earlier, for which he had not been compensated.
54. Thomas Wetzel had performed work for Sharecom in the past, but he was paid for the work that he had performed at or about the time that he performed the work. At the time that Thomas Wetzel demanded that Sharecom pay him stock for services that he had performed in the past, Sharecom did not owe Thomas Wetzel any stock, or any other form of compensation. Although Nordling told Custable these facts, Custable devised the fiction that Thomas Wetzel was owed this stock for work performed more than two years earlier. Custable then directed Nordling to prepare paperwork documenting Thomas Wetzel's demand for payment in stock for services previously rendered to Sharecom. Custable reviewed Nordling's paperwork documenting Thomas Wetzel's false demand at the time that the paperwork was prepared. After Nordling prepared the paperwork to Custable's satisfaction, Custable arranged for an attorney opinion letter to be prepared so that Sharecom's transfer agent would allow the Thomas Wetzel stock to be issued without a restrictive legend. Sharecom's transfer agent did issue 15 million shares of unrestricted stock to Thomas Wetzel.
55. At or about the time that Sharecom issued 15 million shares of unrestricted stock to Thomas Wetzel, Thomas Wetzel directed the transfer agent to transfer the stock to various individuals involved in producing spam newsletters for Custable's benefit. Thomas Wetzel requested that the stock issued to him be immediately transferred based on Custable's request, which was communicated to Thomas Wetzel through Nordling.
Wetzel, Widen and the Straw Men Liquidate S-8 Stock for Custable's Benefit in Unregistered Offerings
56. After accumulating large positions in the issuers' stock and arranging for spam newsletters, Custable would then used Wetzel, Widen and the straw men to liquidate the stock through massive selling to the investing public. Between November 2001 and the present, Suburban Capital, Wetzel, and Widen engaged in unregistered offerings of the stock of Wasatch, Gateway, Pacel, Thermo Elastic, BMII, Premier Axium and Sharecom. The unregistered offerings are detailed in a summary schedule, which is attached to Glaser's Declaration as Exhibit 1 and incorporated herein by reference. They did so by selling the issuer's stock they had accumulated for Custable's benefit almost immediately after receiving it from the issuers. These stock sales by Suburban Capital, Wetzel and Widen show that they acquired the stock from the issuers with a view to distributing it to the investing public.
57. Custable, Suburban Capital, Wetzel, Widen and the straw men did not file a registration statement with the Commission for the sales of stock detailed in Exhibit 1, even though many of the sales accounted for a significant amount of the issuer's outstanding stock at the time of the sales.
58. The sales made during the unregistered offerings were done through myriad brokerage accounts in order to conceal Custable's beneficial interest in the stock. In some instances, sales were made out of brokerage accounts in the name of Suburban Capital, Wetzel, Widen or one of the straw men used by Custable. In such instances, most of the proceeds from the stock sales were then transferred to a Suburban Capital bank account that Custable controlled. In other instances, Custable directed Wetzel, Widen and the straw men to transfer stock issued in their name to Suburban Capital. This stock would then be sold out of Suburban Capital's brokerage account. No matter which method was employed, the vast majority of the proceeds from the unregistered offerings were directed to Suburban Capital's bank account, which is an account controlled exclusively by Custable. Between November 2001 to the present, Suburban Capital, Wetzel, Widen and the straw men transferred at least $4.3 million in proceeds from the unregistered offerings of stock into Suburban Capital's bank account. Custable then directed a small portion of these proceeds to Wetzel, Widen and the straw men.
Custable's Concealment of Beneficial Ownership
59. As a result of the issuances of stock described in this action, at various times between November 2001 and the present, Custable beneficially owned more than 5% of the issued and outstanding stock in Wasatch, Pacel, Gateway, ThermoElastic, Sharecom, and Premier Axium.
60. The federal securities laws require individuals and entities who accumulate a position of 5% or more of the issued and outstanding stock of an issuer to file a Schedule 13D disclosing their interest. A Schedule 13D discloses, among other things, the filer's beneficial ownership of stock in the issuer, the purpose of the stock acquisition and all material changes in beneficial ownership of the stock disclosed.
61. With the exception of two recently filed Schedules 13D disclosing his ownership in Wasatch and Gateway, Custable never filed a Schedule 13D, or any other documents, disclosing his personal beneficial ownership of any of these securities. Further, Custable did not file any statements or supplemental Schedules 13D disclosing the sales of stock in the issuers for his benefit.
62. Custable intentionally concealed his beneficial ownership of stock by not filing Schedules 13D. He did so because he knew that the investing public would be suspicious of investing in stock associated with Custable, a recidivist securities law violator.
Issuance and Sale of Counterfeit BMII Stock
63. Suburban Capital, Custable, and Wetzel also engaged in a fraudulent scheme to issue counterfeit shares of BMII to use for their own benefit. BMII is a bulletin board company that specializes in direct marketing. In Spring 2001, Custable approached Robert Blagman ("Blagman"), the chief executive officer of BMII, about providing BMII with financing and consulting services through Suburban Capital. Blagman agreed and thereafter Custable arranged for Suburban Capital and others to loan Blagman and BMII more than $1 million, with Blagman's restricted stock of BMII pledged as collateral. When Blagman and BMII failed to repay these loans, Custable foreclosed on the BMII stock pledged as collateral.
64. The relationship between Custable and Blagman began to break down around March 2002 when Custable failed to come through with additional financing that he had promised BMII. Custable requested that Blagman provide him with more BMII stock and Blagman refused. Thereafter, Custable, Suburban Capital and Wetzel executed a scheme to issue counterfeit BMII stock for their own benefit.
65. Between at least April 12 and May 22, 2002, Custable, through Suburban Capital and Wetzel, sent to BMII's transfer agent, the entity responsible for issuing physical certificates of BMII stock, numerous BMII share issuance authorizations purportedly from BMII and signed by Blagman. These share issuance authorizations resulted in the issuance of approximately 5.4 billion shares of BMII stock.
66. This stock was issued without the authorization of Blagman or BMII. The share issuance authorizations used to obtain the counterfeit BMII stock were forgeries. Blagman's signature and handwriting were forged on the share issuance authorization forms. Blagman has identified some of the handwriting used to forge the share issuance authorization forms as Wetzel's handwriting. The federal criminal authorities seized many of the original share issuance resolutions used to obtain the unauthorized BMII stock when they executed a search warrant at Suburban Capital's office in Addison, Illinois.
67. In addition to forged issuance authorization forms, Custable, Suburban Capital and Wetzel also fabricated consulting agreements to make it appear to BMII's transfer agent that the share issuances were pursuant to Form S-8 registration statements. They did so by forging Blagman's signature on the consulting agreements. The consulting agreements supposedly justifying the issuance of the counterfeit BMII stock were never agreed to by BMII. The federal criminal authorities seized some of the forged consulting agreements during their execution of the search warrant on Suburban Capital's offices.
68. Based on the forged issuance authorization forms, the transfer agent delivered the unauthorized BMII stock directly to Suburban Capital's offices. As of May 22, 2002, the counterfeit BMII stock accounted for approximately half of BMII's issued and outstanding stock.
69. Custable, Suburban Capital and Wetzel controlled the counterfeit stock after its issuance. Wetzel sold at least 240 million shares of the counterfeit BMII stock, out of two separate accounts, generating proceeds of at least $242,000, which she transferred to Suburban Capital's bank account. Other shares of the counterfeit BMII stock were transferred to individuals and entities that are involved in disseminating spam stock newsletters.
Expatriation of Assets
70. Since at least 2002, Custable has taken steps to direct his ill-gotten gains beyond the reach of U.S. law enforcement. In the summer of 2002, Custable set up an entity in Nevis, an offshore jurisdiction, to protect his assets from any potential civil or criminal judgment. Further, since June 2002, Custable and Suburban Capital have transferred over $110,000 into an account at a Costa Rican bank for the eventual credit of Pine Services, or Suburban Capital. Pine Services is a Costa Rican entity located in San Juan. The business operations of Pine Services, outside of its affiliation with Custable and Suburban Capital, are unknown.
71. As recently as February 14, 2003, Gateway issued Custable shares of its S-8 stock in exchange for purported consulting services. In most cases, Custable has immediately transferred this stock to Pine Services. Pine Services then transfers this stock into a brokerage account and sells the Gateway stock. Pine Services then transfers these sales proceeds into an account at Banco Nacional de Costa Rica.
72. Neither Pine Services, nor Custable, has ever filed a registration statement for these sales of Gateway stock.
COUNT I
Violations of Section 17(a)(1) of the Securities Act [15 U.S.C. §77q(a)(1)]
73. Paragraphs 1 through 72 are hereby realleged and incorporated by reference herein.
74. From at least November 2001 through the present, Custable, Wetzel, Suburban Capital, Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic in the offer and sale of securities, by the use of the means and instruments of transportation and communication in interstate commerce and by the use of the mails, directly and indirectly, have employed and are employing devices, schemes and artifices to defraud.
75. Custable, Wetzel, Suburban Capital, Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic knew or were reckless in not knowing the facts and circumstances described in Paragraphs 1 through 74 above.
76. By reason of the foregoing, Custable, Wetzel, Suburban Capital, Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic have violated and are violating Section 17(a)(1) of the Securities Act.
COUNT II
Violations of Section 17(a)(2) and 17(a)(3)
of the Securities Act [15 U.S.C. § 77q(a)(2) and § 77q(a)(3)]
77. Paragraphs 1 through 76 are hereby realleged and incorporated by reference herein.
78. From at least November 2001 through the present, Custable, Wetzel, Suburban Capital, Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic, in the offer and sale of securities, by the use of the means and instruments of transportation and communication in interstate commerce and by use of the mails, directly and indirectly, have obtained and are obtaining money and property by means of untrue statements of material fact and have omitted and are omitting to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and have engaged and are engaging in transactions, practices and courses of business which operated and will operate as a fraud and deceit upon purchasers and prospective purchasers of stock in the issuers.
79. By reason of foregoing, Custable, Wetzel, Suburban Capital, Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic have violated and are violating Sections 17(a)(2) and 17(a)(3) of the Securities Act.
COUNT III
Violations of Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)]
and Rule 10b-5 [17 C.F.R. 240.10b-5] thereunder
80. Paragraphs 1 through 79 are hereby realleged and incorporated by reference herein.
81. From at least November 2001 through the present, Custable, Wetzel, Suburban Capital, Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic, in the offer and sale of securities, by the use of the means and instrumentalities of interstate commerce and of the mails, directly and indirectly, have employed and are employing devices, schemes and artifices to defraud; have made and are making untrue statements of material fact and have omitted and are omitting to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and have engaged and are engaging in acts, practices and courses of business which operated and will operate as a fraud and deceit upon purchasers and sellers of such securities.
82. Custable, Wetzel, Suburban Capital, Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic, knew or were reckless in not knowing of the activities described in Paragraphs 1 through 81 above.
83. By reason of foregoing, Custable, Wetzel, Suburban Capital, Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic, have violated and are violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
COUNT IV
Violations of Section 5(a) and (c) of the Securities Act [15 U.S.C. § 77e(a) and (c)]
84. Paragraphs 1 through 83 above are realleged and incorporated herein by reference.
85. From at least November 2001 to the present, Custable, Suburban Capital, Wetzel, Widen, Wasatch, Heesch and Giles directly and indirectly, and notwithstanding that there was no applicable exemption: (i) made use of means or instruments of transportation or communication in interstate commerce or of the mails to sell, through the use or medium of a prospectus or otherwise, securities as to which no registration statement was in effect; (ii) for the purpose of sale or delivery after sale, carried and/or caused to be carried through the mails or in interstate commerce, by means or instruments of transportation, securities as to which no registration statement was in effect; and (iii) made use of means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell, through the use or medium of a prospectus or otherwise, securities as to which no registration statement had been filed.
86. No valid registration statement was filed with the Commission in connection with Custable, Suburban Capital, Wetzel, Widen, Wasatch, Heesch and Giles' sales of, and offers to sell, securities in the issuers identified in this complaint.
87. By reason of the foregoing, Custable, Suburban Capital, Wetzel, and Widen have violated and are violating Sections 5(a) and (c) of the Securities Act [15 U.S.C. § 77e(a) and (c)].
COUNT V
Violations of Section 13(d) of the Exchange Act [15 U.S.C. § 78m(d)], and Rule 13d-1 and 13d-2 thereunder [17 CFR 240.13d-1, 13d-2]
88. Paragraphs 1 through 87 above are realleged and incorporated herein by reference.
89. Section 13(d) of the Exchange Act and Rule 13d-1 thereunder require that any person that acquires more than 5% of a company's class of stock registered under Section 12 of the Exchange Act must notify the issuer and the Commission within 10 days of the acquisition. Exchange Act Rule 13d-2 requires that the person notify the issuer and the Commission of any material increases or decreases in the percentage of beneficial ownership.
90. From at least November 2001 to the present, Defendant Custable 1) beneficially owned more than 5% of the issued and outstanding stock of Sharecom, Wasatch, Pacel, Premier Axium, Gateway, and ThermoElastic; and 2) failed to file a Schedule 13D, or any other report or schedule, disclosing his beneficial ownership interest in Sharecom, Wasatch, Pacel, Premier Axium, Gateway, and ThermoElastic.
91. By reason of foregoing, Custable violated and, unless enjoined, will continue to violate Section 13(d) of the Exchange Act [15 U.S.C. §78m(d)] and Rules 13d-1 and 13d-2 thereunder [17 C.F.R. 240.13d-1, 13d-2].
RELIEF REQUESTED
WHEREFORE, the Commission respectfully requests that the Court:
A. Grant a Temporary Restraining Order, Order of Preliminary Injunction, and Order of Permanent Injunction, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining:
(1) Custable, Suburban Capital, Wetzel, and Widen from violating Sections 5(a) and (c) of the Securities Act [15 U.S.C. § 77e(a) and (c)];
(2) Custable, Suburban Capital and Wetzel, their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of the Temporary Restraining Order, Order of Preliminary Injunction, and Order of Permanent Injunction by personal service or otherwise from directly or indirectly engaging in acts practices or courses of business described above, or in conduct of a similar purport and object, in violation of Section 17(a)(1), (2), and (3) of the Securities Act [15 U.S.C. § 77q(a)];
(3) Custable, Suburban Capital and Wetzel, their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of the Temporary Restraining Order, Order of Preliminary Injunction, and Order of Permanent Injunction by personal service or otherwise from directly or indirectly engaging in acts, practices or courses of business described above, or in conduct of a similar purport and object, in violation of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule 10b-5 [17 C.F.R. § 240.10b-5], thereunder; and
(4) Custable, his officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of the Temporary Restraining Order, Order of Preliminary Injunction, and Order of Permanent Injunction by personal service or otherwise from directly or indirectly engaging in acts, practices or courses of business described above, or in conduct of a similar purport and object, in violation of Section 13(d) of the Exchange Act [15 U.S.C § 78m(d)] and Rules 13d-1 and 13d-2 thereunder [17 CFR 240.13d-1, 13d-2].
B. Grant an Order of Permanent Injunction, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining:
(1) Wasatch, Heesch and Giles their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of the Order of Permanent Injunction by personal service or otherwise from directly or indirectly engaging in acts practices or courses of business described above, or in conduct of a similar purport and object, in violation of Sections 5(a) and (c) of the Securities Act [15 U.S.C. § 77e(a) and (c)];
(2) Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of the Order of Permanent Injunction by personal service or otherwise from directly or indirectly engaging in acts practices or courses of business described above, or in conduct of a similar purport and object, in violation of Section 17(a)(1), (2), and (3) of the Securities Act [15 U.S.C. § 77q(a)].
(3) Wasatch, Heesch, Giles, Pacel, Calkins, Gateway, Bailey, and ThermoElastic, their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of the Order of Permanent Injunction by personal service or otherwise from directly or indirectly engaging in acts practices or courses of business described above, or in conduct of a similar purport and object, in violation of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule 10b-5 [17 C.F.R. § 240.10b-5], thereunder.
B. Order Custable, Suburban Capital, Wetzel, Widen, Wasatch, Giles, Heesch, Pacel, Calkins, Gateway, Bailey and ThermoElastic to disgorge any and all ill-gotten gains, plus prejudgment interest and an order requiring Pine Services to disgorge any ill-gotten gains.
C. Impose civil penalties against Custable, Suburban Capital, Wetzel, Widen, Wasatch, Giles, Heesch, Pacel, Calkins, Gateway, Bailey and ThermoElastic pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)], Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].
D. Issue orders (a) freezing the assets of Custable, Suburban Capital, Wetzel, Widen and Pine Services, their officers, agents, servants, employees, attorneys and those persons in active concert with them who receive actual notice of the asset freeze by personal service or otherwise, (b) requiring all the defendants and relief defendant Pine Services to identify assets and to provide an accounting; and (c) prohibiting all of the defendants and relief defendant Pine Services from destroying documents;
E. Issue an order temporarily, preliminarily, and permanently prohibiting Custable and Suburban Capital from participating in any offering of penny stock pursuant to Section 20 of the Securities Act [15 U.S.C. § 77t] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].
F. Issue an order permanently prohibiting Wetzel, Widen, Heesch and Giles from participating in any offering of penny stock pursuant to Section 20 of the Securities Act [15 U.S.C. § 77t] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].
G. Issue an order imposing interim equitable relief, including (1) an order temporarily and preliminarily barring Custable and Suburban Capital from trading, directly or indirectly, in securities, and (2) an order temporarily and preliminarily requiring Custable and Suburban Capital to report any securities transaction after the filing of this action in which they have any direct, indirect, or beneficial interest.
H. Issue an order requiring Custable, Suburban Capital, Wetzel, Widen and Pine Services to repatriate to U.S. financial institutions all assets in which they have a direct, indirect or beneficial interest.
I. Issue an order permanently barring Heesch, Giles, Bailey and Calkins from serving as an officer or director of any public company pursuant to Section 20 of the Securities Act [15 U.S.C. § 77t] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].
J. Issue an order appointing a receiver for Suburban Capital.
K. Grant such other and further relief as may be necessary and appropriate.
L. Retain jurisdiction over this action to implement and carry out the terms of all orders and decrees that may hereby be entered, or to entertain any suitable application or motion by the Commission for additional relief within the jurisdiction of this Court.
Respectfully submitted,
Dated: March 27, 2003
_____________________________
Jerome P. Tomas
Staff Attorney
Direct Dial No.: (312) 353-0881
John J. Sikora, Jr.
Deputy Assistant Regional Director
Direct Dial No.: (312) 353-7418
Steven J. Levine
Senior Trial Counsel
Direct Dial No. (312) 886-1774
Attorneys for Plaintiff
UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
175 W. Jackson, Suite 900
Chicago, IL 60604
Telephone: (312) 353-7390
Facsimile: (312) 886-8514
http://www.sec.gov/litigation/complaints/comp18057.htm
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I get Eitens emails and try to warn people like yourself about him.
Check out Eitens track record. Most companies end up going to knothing.
He is a liar and a thief and just plain no good
Wow, Eiten here too http://www.junkfax.org/fax/profiles/wsp/wsp.htm
Geoffrey Eiten also mentioned in this article:
Sewer Pipes
Nathan Vardi 02.12.07
http://www.forbes.com/forbes/2007/0212/064_print.html
Hedge funds are posting nice returns from deals that may involve ex-cons, stock scammers--even the Mob.
If your entrepreneurial venture were desperate for capital, would you get it from a hedge fund? Sometimes that's not such a good idea. Consider Laurus Master Fund. The Cayman Islands hedge fund opened with $5 million under management in 2001 and has grown to $1.6 billion making investments in so-called PIPEs, or private investments in public equities.
In those deals the fund invests in a cash-starved, thinly traded public company. In exchange it gets securities--notes that charge interest, warrants and options--convertible into common shares of the company. Laurus claims it has achieved an annualized net return of 18.5% since inception. The people running Laurus from New York--brothers Eugene Grin, 49, and David Grin, 37--are making out pretty well, too. In addition to the standard 2% of assets and 20% cut of profits, they also collect a closing fee, an average 3.5% of each deal, which they liken to points on a mortgage. As for the companies they invest in? Not so well. On average they lose 30% of their stock price within a year of signing a Laurus pipe, says PlacementTracker, a San Diego research service.
PIPEs are a big business, drawing $28 billion last year from hedge funds. Some of the companies raising the capital are large, but most are desperate indeed, too small or too weak financially to raise money with a public stock offering. Some of the hedge funds providing the money are not financiers that you would select if you had a choice.
Originally from Ukraine, Eugene Grin became a vacuum cleaner salesman when he landed in the U.S. in 1979. Then he worked as a broker of penny stocks, among other investments, at F.N. Wolf & Co., the boiler room shut down by regulators in 1994. At Wolf one of Grin's clients was Gilbert Bornstein, a 54-year-old unemployed man who invested $32,000 with Grin after being convinced he could safely double his money through penny stocks. (Grin says he never made that claim.) Bornstein was soon stuck with $27,000 in losses. Nine years later a New York State judge determined that Grin owed Bornstein $40,000. Grin has yet to pay that bill, and the judgment remains outstanding. "He was superwealthy," Grin shrugs, by way of an excuse. "There was money in the family."
Today Grin and his younger brother, David, still traffic in penny stocks. But they do so through PIPEs. Hedge funds love these deals because the shares they get are often priced at a discount to the market to compensate for the fact that they can't be traded until they are registered with the Securities & Exchange Commission, which can take months. Meantime, though, hedge funds can value those PIPE warrants and options pretty much any way they want and calculate their net asset value accordingly. The larger the gain in a fund's NAV, of course, the more attractive it is to new investors.
And the more attention these deals may draw from regulators. "Improper trading practices in connection with PIPEs is a concern," says David Markowitz, an SEC assistant regional director in New York. "It's an area that SEC enforcement is looking at." The feds have so far focused on the improper shorting of stock. It is mighty tempting for a PIPE buyer to double-cross the company it is investing in by shorting the company's stock and using the conversion privileges with the PIPE investment to cover its short position. That earns the investor a quick spread but wrecks the target's ability to raise more equity capital. Such shorting is forbidden by Section 5 of the Securities Act. In September a U.S. Attorney charged Hilary Shane, a former hedge fund manager, with insider trading, accusing her of shorting Compudyne's stock after learning that Compudyne was contemplating a pipe fundraising. On Jan. 4 Joseph Spiegel, a onetime portfolio manager for a New York hedge fund, settled SEC allegations of his using PIPE shares to cover short trades and paid a $110,000 penalty.
Andrew Worden, 41, runs Barron Partners, a $150 million hedge fund that has invested $85 million in pipes since 2003. The fund flogs its expertise in microcap companies. It doesn't promote the fact that Worden in 1994 pleaded guilty to wire fraud--he stiffed brokers on shares they bought for him that decreased in value--and served two years' probation. "I was 23 years old," Worden says of his indiscretions, which were not prosecuted for five years.
In March 2005 Barron Partners invested $1.5 million in Cordia Corp., a Winter Garden, Fla. Internet-phone outfit 54% owned by Alexander G. Minella, who in 1993 was sentenced to up to six years in prison. Minella, then president of broker Wakefield Financial Corp., pleaded guilty to having "secretly rigged the trading in certain Nasdaq securities" by getting brokers to trade among themselves to manipulate prices.
Corey Ribotsky, 36, heads N.I.R. Group, a handful of Roslyn, N.Y. hedge funds with $630 million under management. His first business partner successfully sued him for stealing away their marketing and consulting firm. The florist at Ribotsky's wedding filed a $7,275 claim against him for failing to pay the bill.
So how does he do as a hedge fund manager? A Ribotsky PIPE, on average, precedes a stock-price drop of 54% a year after the deal, according to PlacementTracker. That still works for Ribotsky because of the way he structures a PIPE: He receives debt securities convertible into discounted stock, in an amount determined by dividing the principal by the price of the shares at the time of conversion, less a steep discount. The further a stock falls, the more shares he gets.
Since Ribotsky invested $1.5 million in 2005, shares in Med Gen are down from $1 on the o-t-c bulletin board to a fraction of a penny. The Boca Raton, Fla. company had less than $1 million in sales from an antisnoring spray, diet pills and supplements. (Its biggest shareholder and chief executive is Paul B. Kravitz, the former president of AppleTree Cos., who paid a $25,000 penalty in 1996 to settle SEC claims that he failed to tell investors in an AppleTree offering that he planned to invest $250,000 in a gambling casino.) Ribotsky converted the debt into 171 million shares of Med Gen, at discounts of 40%, by September 2006. Did he sell his stake, triggering the stock-price plunge? N.I.R. lawyer Jonathan Schechter declines to say. "It is not us that makes a company lose its value--maybe a company hasn't executed its business plan," he says, adding that N.I.R. never shorts a stock.
One of Ribotsky's PIPEs, a $1 million investment in Roanoke Technology, a Rocky Mount, N.C. Web site designer, allowed N.I.R. to purchase newly issued shares at a discount of 50%; Roanoke's shares then traded hands on the o-t-c bulletin board at 12 cents. After Ribotsky sued Roanoke when it didn't meet its loan payments, Roanoke countersued, claiming that N.I.R.'s selloff of shares was destroying the company. Indeed, trading volume of Roanoke stock jumped from 180,000 to 2.4 million shares on the days Ribotsky's funds filed conversion notices, say court documents, and the stock price plunged to less than a penny. Both suits were settled. Roanoke chief David L. Smith Jr. ended up leaving the company and settling SEC charges in August 2006 that he improperly issued stock to consultants who sold them for $7 million and kicked back $4 million to him. Smith has been barred from acting as an officer or director of a public company.
When it comes to dicey partners, though, few are as accomplished as the Grins. They financed Francis O'Donnell, who has gotten to know the feds pretty well. Taking over as chief of Searchhound.com, an o-t-c bulletin board stock in 2003, O'Donnell changed its name to Coach Industries, quickly built up a controlling stake in the Cooper City, Fla. firm and started acquiring limousine companies. Laurus backed him with a $6 million loan. On Jan. 5 O'Donnell pleaded guilty to being an associate of the Genovese crime family. The indictment also claimed that an FBI agent posing as a drug dealer was asked to launder proceeds through Coach in exchange for a fee. In addition O'Donnell is accused of luring a victim to his office, where Clement (Clemmie) Santoro allegedly held a gun to his head and demanded a $1.5 million payment.
The Grins invested $1.5 million in April 2004 with Magic Lantern Group, which marketed Canadian educational videos. Their introduction to the company came through National Financial Communications, owned by GEOFFREY EITEN, a Needham, Mass. newsletter writer who flogged companies and claimed to show readers "how to make 5,000%" on their money. Magic Lantern's biggest backer was Lancer Management Group, a New York City hedge fund that blew up amid accusations of fraud.
Magic Lantern, which lost $15.9 million on sales of $2.7 million in 2004, began to disintegrate. EITEN was sued in September 2006 by William Galvin, Massachusetts secretary of state, for engaging in "widespread 'pump and dump' transactions by publicly promoting certain stocks at the same time he was selling them." Galvin released chummy e-mails between Eugene Grin and EITEN's company suggesting they team up to sell Magic Lantern shares. EITEN denies any wrongdoing. Laurus managed to eke out what it calls "a nominal profit" before Magic Lantern's stock collapsed.
In November 2004 Laurus agreed to lend Thomas Equipment, which makes skid loaders and hydraulic equipment in Canada, $22 million to finance acquisitions and operations. At the time the stock traded at 88 cents. Most of Laurus' loans were convertible into stock at prices of $1.50 a share; the Grins also bought 2 million shares for a penny each and received options to purchase 4 million more for a cent apiece. Helped by a steady stream of press releases, Thomas shares touched $8.99 in January 2005 on light volume.
What was driving the stock? James Patty, former interim chief executive at Thomas and a current board member, says that David Grin was constantly focused on Thomas Equipment's share price, even though the lack of liquidity in the stock meant that Laurus could not sell too many shares without driving down the price. Word came down from David Grin, says Patty, "that he couldn't allow that type of hit to his portfolio." Why? "My assumption would be he was looking at a valuation of the company in order to attract additional money into his fund," Patty says.
Ridiculous, says Eugene Grin. The effect of Thomas' high stock price on Laurus' net asset value "was never material." His valuation model, he claims, discounts severely for the lack of trading volume in a stock like Thomas. A good thing for Laurus: Thomas Equipment's two main units have filed for insolvency in Canada; it was yanked off the American Stock Exchange and now trades for 8 cents.
Eugene Grin says he never shorts a stock. He also insists that Laurus provides a valuable service--and is more like a bank than a hedge fund. "We have tens of thousands of people working because of our investments," he says. "It's a beautiful thing."
http://www.forbes.com/forbes/2007/0212/064_print.html
Here is an article which mentions Eiten:
PIPEs Clogged With Criminals?
http://www.dealbreaker.com/2007/01/pipes_clogged_with_criminals_1.php
You know that friend of yours, who’s really a great girl with looks and personality and that special something who, inexplicably, is constantly drawn to scumbags? That sort of magnetism seems to be at work between PIPEs and hedge funds run by people who are/or are involved with criminals, as discussed in Forbes’s “Sewer Pipes,” this week. If you suspect that your neighbor was able to afford that gold-plated Statue of the David on his front lawn because his hedge fund posted some fantastic returns last year—almost too fantastic, you should check it out. We’ll just offer you some interesting facticles on the phenomenon’s poster child, Eugene Grin (and his younger brother, David):
+Originally from Ukraine, Eugene Grin became a vacuum cleaner salesman when he landed in the U.S. in 1979. Then he worked as a broker of penny stocks, among other investments, at F.N. Wolf & Co., the boiler room shut down by regulators in 1994. At Wolf one of Grin's clients was Gilbert Bornstein, a 54-year-old unemployed man who invested $32,000 with Grin after being convinced he could safely double his money through penny stocks. Bornstein was soon stuck with $27,000 in losses. Nine years later a New York State judge determined that Grin owed Bornstein $40,000. Grin has yet to pay that bill, and the judgment remains outstanding. "He was superwealthy," Grin shrugged [while talking to Forbes], by way of an excuse. "There was money in the family."
+ The Grins financed Francis O'Donnell, who has gotten to know the feds pretty well. Taking over as chief of Searchhound.com, an OTC bulletin board stock in 2003, O'Donnell changed its name to Coach Industries, quickly built up a controlling stake in the Cooper City, Fla. firm and started acquiring limousine companies. Laurus backed him with a $6 million loan. On Jan. 5 O'Donnell pleaded guilty to being an associate of the Genovese crime family. The indictment also claimed that an FBI agent posing as a drug dealer was asked to launder proceeds through Coach in exchange for a fee.
+ The Grins invested $1.5 million in April 2004 with Magic Lantern Group, which marketed Canadian educational videos. Their introduction to the company came through National Financial Communications , owned by GEOFFREY EITEN, a Needham, Mass. newsletter writer who flogged companies and claimed to show readers "how to make 5,000%" on their money. Magic Lantern's biggest backer was Lancer Management Group, a New York City hedge fund that blew up amid accusations of fraud.
Sewer Pipes [Forbes]
By Bess Levin | 01.30.07 at 12:42 PM
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This is a publication of OTC Financial Network (OTCFN), a division of National Financial Communications Corp. (NFC), a financial communications and investor relations company. Geoffrey Eiten is the sole owner of NFC and OTCFN. OTCFN has received fees for services, including monthly fee of five thousand dollars and options to purchase an aggregate of one million shares at an exercise price of two cents per share, one million shares at an exercise price of three cents per share, and one million shares at an exercise price of four cents per share, plus expenses for the creation and distribution of materials, including the InvestorFacts report. OTCFN is paid editorial fees for its writing and dissemination of materials, and the companies featured do not have to meet any specific financial criteria. The clients represented by OTCFN are typically development-stage companies that pose a much higher risk to investors. When investing in a speculative stock of this nature, it is possible to lose your entire investment over time. The information contained herein contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1993 and Section 21E of the Securities Exchange Act of 1934, including statements regarding expected continual growth of the featured company. In accordance with Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, the statements contained herein that look forward in time, which include other than historical information, involve risks and uncertainties that may affect actual results of operations. Factors that could cause actual results to differ include the size and growth of the market for the company’s products, the company’s ability to fund its capital requirements in the near term and in the long term, pricing pressures, etc. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives goals, assumptions or future events or performance may be forward-looking statements. Forward-looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties that could cause actual results or events to differ materially from those presently anticipated. Forward-looking statements may be identified through the use of words such as expects, will, anticipates, estimates, believes, or by statements indicating certain actions may, could, should or might occur. This is not an offer to buy or sell securities. Information or opinions presented are solely for informative purposes and are not intended nor should they be construed as investment advice. The information provided in this report is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country. We encourage our readers to invest carefully and read the investor information available at the web sites of the U.S. Securities and Exchange Commission (SEC) at www.sec.gov and the National Association of Securities Dealers (NASD) at www.nasd.com. The NASD has published information on how to invest carefully at its web site. Readers can review all public filings by companies at the SEC's EDGAR page. This report does not purport to be a complete study of the featured Company. Information used and statements of fact have been obtained from the featured Company and other sources, but not verified nor guaranteed by OTCFN as to completeness or accuracy. Such information is subject to change without notice. It should be understood that there is no guarantee past performance will be indicative of future results. Opinions stated herein may be solely Geoffrey Eiten’s, and not necessarily those of the featured Company. Officers, directors, and employees of OTCFN or NFC and anyone mentioned in this report and members of their families, may hold a position and may, from time to time, trade in these securities for their own accounts including when the InvestorFacts report, or other material, is distributed. Specific information in this regard will be furnished upon request. Trademarks are the property of their respective owners. ©2007 OTC Financial Network. All rights reserved. For any additional information call 781-444-6100 or see http://www.otcfn.com.
Geoffrey Eitems M.O.: Usually gets a finders fee from serial dilutor that provides financing to the company. Gets lots of shares from company for so called IR services. Will most likely write a classic "Favorable Report" on the company.
Geoffrey is hired to creat volume so look for alot of meaningless press releases to attract penny investors.
Geoffrey has an account in Canada which he dumps his share so if you see selling dont think its naked short selling from Canada.
In reality it will be a notorious stock promoter dumping shares along side the pipe guys.
Geoffrey Eiten used to promote Allen Wolfsons stocks as well as offshore boiler room type of stocks.
Be careful
He is nothing but stockdung!!
To get a full profile of GEOFFREY EITEN and his pump and dump scam please visit
PROMOTER GEOFFREY EITEN AS SEEN ON SECRETARY GLAVIN'S WEB SITE:
Secretary Galvin Files Against
Pump and Dump Operator
(On September 6, 2006)
EITEN Complaint
http://www.sec.state.ma.us/sct/sctnat/EITEN_complaint.pdf
EITEN Exhibits
http://www.sec.state.ma.us/sct/sctnat/EITEN_exhibits.pdf