Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Motion filed 3 Oct. Hearing scheduled for 23 Oct.
In the SEC case, at the SEC's request under seal, discovery has been further extended thru 15 November.
Some new direction on the investigation?
Bankruptcy case: CR still wriggling on discovery; now it's about what is privileged and what isn't.
In the meantime, the PwC guys have learned enough to want to learn more, and asking the court to allow subpoenas against some more issuers & people associated with them; against parties who apparently got a cut of CR's management fee in return for touting the funds to investors; against Yellin and Groveman; against former corporate counsel; and against the Tucci's.
On the new issuer related stuff:
16. Delmar Janovec, AmeriResources Technologies, Inc., RoboServer Systems Corp., and BizAuctions, Inc. From the documents and information currently available to the Foreign Representatives, Delmar Janovec (“Janovec”) served in a capacity roughly equivalent to a Chief Restructuring Officer at the request of Ribotsky for several issuers. Notably, many of these companies are ones as to whom the records of the AJW Funds are incomplete because they are missing critical documents, such as promissory notes. Janovec is currently the CEO of one issuer, AmeriResources Technologies, Inc. Two of its subsidiaries, RoboServer Systems Corp. and BizAuctions, Inc., are also issuers. Rule 2004 discovery is needed to confirm the existence of debts owed by these issuers and to understand Janovec’s role in these companies and his relationship with Ribotsky.
17. BeautyKO LLC, BeautryKo USA Inc., IGIA, Inc., and Avi Sivan. IGIA, Inc. (“IGIA”) is an issuer that provided more than $8 million of convertible notes to the AJW Funds. IGIA appears defunct, at least since the SEC suspended trading in IGIA’s stock in 2012. Yet, the company’s phone number is answered by a business announcing itself as “BeautyKo,” and it appears that BeautyKo offers products that had previously been offered by IGIA. Avi Sivan is the principal of BeautyKo. The Foreign Representatives seek discovery to investigate potential successor liability, fraudulent transfers, or other claims against these parties.
18. David Walters, Monarch Staffing Inc., Monarch Bay Securities, LLC, and Monarch Bay Associates, LLC. Monarch Staffing (“Monarch”), formerly MT Health, is an issuer that apparently provided approximately $3.8 million in convertible notes to the AJW Funds. However, the files received from NIR do not contain these notes. Monarch appears to be an active company that has a staffing contract with the California Department of Corrections and Rehabilitation. Walters is Monarch’s principal but he has not responded to various efforts to contact him about the company’s debt. Walters’ wife, Mimi Walters, is a California politician, who has made public disclosures about the Walters’ ownership interest in Monarch. These disclosures also suggest that it is a viable business that has ongoing revenue. Monarch Bay Associates, LLC and Monarch Bay Securities LLC appear to be affiliated entities that may have received funds from Monarch as a result of the convertible notes.
19. Eurotech, Ltd. and Andrew Muzzi. Epicus Communications Group, Inc. (“EPCG”) is an issuer that provided convertible securities to one or more of the AJW Funds. The Foreign Representatives’ review of documents has revealed an agreement whereby Eurotech Ltd. (“Eurotech”) entered into a contract, effective as of November 14, 2008, with EPCG whereby Eurotech assumed more than $6 million of EPCG’s debt to the AJW Funds. To date, Eurotech has not responded to efforts to verify this debt and requests for payment. The Foreign Representatives have also located some interest-related notes issued by Eurotech that appear to relate to interest on the transferred obligations which are past-due. Andrew Muzzi is the CEO of Eurotech and is most likely to have information about these transactions and Eurotech’s obligations thereunder.
20. Herbert Leeming. Admiralty Holding Company (“Admiralty”) is an issuer that defaulted on its obligations to one or more of the AJW Funds. Before the appointment of the Foreign Representatives, the AJW Funds commenced litigation against Admiralty in New York State Court. While Admiralty contested the litigation for a few years, it ultimately defaulted, and the Foreign Representatives are now seeking a default judgment against Admiralty.1 The Foreign Representatives are investigating whether the AJW Funds advanced funds when Admiralty was insolvent, and if so, whether funds Admiralty remitted to Leeming which may constitute fraudulent conveyances. Rather than providing value to Admiralty, it seems that Leeming was taking steps to enable a related company, Undersea Recovery Corp (“Undersea”) take over Admiralty’s business.
21. Integrated Armour Systems. Protocall Technologies, Inc. (“Protocall”) is an issuer that provided more than $3 million in notes to the AJW Funds. While Protocall appears to be defunct, the Foreign Representatives are investigating whether Integrated Armor Systems, Inc. (“IAS”) is a successor in interest or otherwise may be liable for the outstanding debt. It appears that the two companies have the same CEO and there is a press release that refers to the acquisition of Protocall by IAS.
On the marketers:
Third-Party Marketers
23. Based on a review of the discovery it has received thus far, the Foreign Representatives have learned that Ribotksy, acting through First Street Manager II, LLC, entered into various agreements with the Third-Party Marketers whereby First Street would pay, on an ongoing basis, a percentage of the management fees or other fees that were attributed to investments referred by the Third-Party Marketers. First Street received management fees based in substantial part on the NAV of the Funds, but the Foreign Representatives are investigating claims based on the misrepresentation of and/or over-statement of the NAV. This may include claims against the Third-Party Marketers for fraudulent transfers.
24. However, the bank records produced by NIR and the other Ribotsky Discovery Parties do not reveal the full extent to which the Third-Party Marketers in fact received compensation from First Street, nor the amounts and timing of such payments. Accordingly, the Foreign Representatives seek Rule 2004 discovery to develop information in connection with these potential claims.
25. Based on a review of discovery already provided, the Foreign Representatives have identified the following U.S.-based Third-Party Marketers that entered into written agreements with First Street: (i) Mondiale Partners, Ltd; (ii) John Cappetta; (iii) vCap Investments LLC; (iv) Azriel Horowitz; (v) The Basel Group, LLC; (vi) Breezy Securities, Inc., (vii) Cyprian Consulting, LLC; (viii) First Allied Securities, Inc.; (ix) Global Capital Management; (x) JP Turner & Company, LLC; (xi) Puritan Securities, Inc.; (xii) Dennis O’Rourke; (xiii) Mac Jenson; (xiv) Robert Jay Singer; (xv) Abby Morgan; (xvi) Sinclair & Company, LLC; (xvii) Summit Capital Advisors, LLC; and (xviii) Randy Gottlieb.
On the Tucci's:
30. Finally, the Foreign Representatives seek to examine Gerald and Michael Tucci, both of whom filed suit against NIR and Ribotsky in 2008 arising from the restructuring of the AJW Funds. While the Tuccis settled their claims less than two months after filing them, the Foreign Representatives reasonably believe that they have information relating to conversations with Ribotsky or other members of NIR which would be relevant to the development of potential claims.
Oops, one final point. The conversion price is stated to be "10% lower than the lowest 3 day avg closing price" in the period 16 July thru 15 Sep.
Why don't they explicitly state what conversion price this calculation delivers? Maybe because the answer is, "Around about 6 cents".
During the period, the 3-day low period looks to be 23 thru 25 July, with an avg close of about $0.065, according to http://www.otcmarkets.com/stock/VGLS/chart
With a 10% discount, about $0.06.
The stock closed at $0.2488 on 2 Oct, the day the deal was announced.
Great negotiating on the part of whoever was supposed to be looking out for the interests of the outside shareholders!
Maybe if/when they get around to filing a quarterly we'll find out that some of this investment has in fact been a buy-out of the DMBM etc notes by Medbridge Venture Fund. This would be the "Tynan/Odell see how easily Haig lets DMBM ravage the outside shareholders and decide that they'd sure like a piece of that action!" scenario.
BTW, you can search the CA SoS site at http://kepler.sos.ca.gov/ to see that Medbridge Venture Fund LLC was created in June, with Odell as registered agent.
The address is the same 121 Gray Ave Santa Barbara as corp HQ for TynanGroup, Medbridge and now VGLS.
Odell also filed a "Medbridge Capital LLC" in August but its status is shown as "Canceled" - no idea what's up with that.
The fundamental question about this new financing from Medbridge Venture Fund LLC: Is it kosher or just a new stock-printing ploy with some different players?
Only time will tell, but anyway ....
- They need to file the whole agreement, not just a terms summary.
- I assume Medbridge Venture Fund LLC is some kind of SPV created by Odell/Tynan to invest in VGLS. Who negotiated the investment from the VGLS side? Haig and his bankrupt brother Arthur? Given the history and Haig's apparent control of the prefs, that gives common holders little reason for comfort.
- The terms as stated are unobjectionable IMO. But of course terms can be changed by agreement between VGL and the LLC (and without having access to the full agreement there is not even any assurance that the summary captures all of the key terms as they currently stand). This happened over & over again with DMBM, with conversion prices re-set to deliver DMBM massive returns regardless of the share price. Given the conflicts and the continuing presence of Haig, what comfort that this won't happen again?
- They need some independents on the board.
- What happens with the prefs? Is the LLC really investing this much while leaving the prefs in control of the company? It makes zero sense for a kosher investment. Ditto with respect to letting Haig/Arthur keep control of the board.
- What happens with the liabilities - the outstanding to DMBM, T&T etc? Paid out from this investment? That would be odd.
- They need to catch up with their quarterlies. Tynan filed a statement on Aug 16th saying that it was "anticipated" that the Q2 info statement and financial would be filed by Aug 20th. This is the common lie by pennytrash companies not interested in providing the market with current information, but it means that VGLS under Tynan is keeping itself in the trash heap. The most optimistic guess is that they are having trouble wrestling information away from Haig and his crony Myron Landin, but who knows?
- Why do they blast this financing out on all the wires, Twitter etc? What purpose would this have except to keep the stock price/liquidity buoyant? Why would they care about that if this is a kosher "venture" investment?
Thnakee
Dumb question: A non-filer still has to file a Form D for a Rule 506 sale of securities, right?
I haven't really followed it very closely, but it does seem that way. I just assume that people trashing Sharp are likely penny-promoters of one kind or another, which doesn't mean that he isn't also one.
A "fraud fighter" doing business with Mazur ... ummmm, OK.
Kaiser plea agreement with DoJ filed - he'll plead guilty; penalty will be $15K fine. No indication of any DoJ interest in digging deeper.
I wonder if this will have any bearing on JF's appeal. That is still stalled, waiting on judge's decision on restitution in the criminal case.
David Marchant (OffShore Alert) has a useful blog post on "How to Identify Red Flags in Investment Schemes": http://www.offshorealert.com/how-to-detect-investment-fraud.aspx
As an investigative reporter, the easiest financial crime for me to detect is a Ponzi scheme. Any investment scheme with a performance chart that is essentially a diagonal line trending upwards with little or no meaningful variation over many months is a Ponzi scheme and, as such, doomed to failure.
...
The names and professional backgrounds of management and directors are irrelevant and it is of no consequence if they don't show up in your KYC database(s). A diagonal line equals fraud, end of story.
Not far behind on my easy-to-detect list is the pump-and-dump securities scam. Tell-tale signs include related-party transactions and offshore companies as significant shareholders. ... For penny stocks, you'd do well to remember this equation: Offshore Shareholders + Related Party Transactions = Fraud. Not some of the time or most of the time but 100% of the time.
Ponzi schemes should take a discerning person seconds to detect, pump-and-dumps a few minutes. It really is that simple. Notwithstanding this, these two types of schemes combined probably account for more losses to victims around the world than any other type of financial crime, losses that are likely to be in the billions of dollars annually.
...
When it comes to conducting due diligence on investment schemes, more emphasis should be placed on how a scheme is structured and presented to investors than the backgrounds of the people involved in its operation and oversight.
Do not make the mistake of relying too heavily on KYC databases to determine whether a scheme is legitimate or not. Many reprobates do not have any criminal, regulatory or professional disciplinary actions against them for no other reason than the mechanisms for holding people accountable for their actions are generally ineffective. This is particularly true for the United Kingdom and its Overseas Territories and Crown Dependencies, where perpetrators of illegal activity are seldom held accountable for their actions, due to corruption, incompetence and lack-of interest on the part of the enforcers.
In a similar vein, an absence of negative press about an individual might have more to do with Britain's [and those of Canada, Australia, New Zealand, Hong Kong ..] miscreant-friendly libel laws deterring publication of negative information than the person never having been involved in wrongdoing.
Ken Kaiser now subject to a criminal ethics violation action for this LocatePlus-related stuff: http://bostonherald.com/news_opinion/local_coverage/2013/09/former_boston_fbi_chief_faces_federal_ethics_charges
He was an FBI Assistant Director in DC, in charge of the criminal investigation division.
In 2009, he was hired away to work for tiny LP, at that time already the subject of FBI, SEC, IRS etc investigations for several years (the company didn't think it was worth worrying the market with any info about all that).
On joining he immediately started to meet with FBI agents, up until that time under his ultimate supervision, to try to influence the LP investigation and (apparently) sell stuff to them. A clear breach of statute carrying criminal penalties.
Why did he do it?? This really does call for more digging.
Case is 13-cr-10264 in MA fed dist court.
Ha! Kenneth Kaiser has now been officially charged with ethics violations for this LP stuff: http://bostonherald.com/news_opinion/local_coverage/2013/09/former_boston_fbi_chief_faces_federal_ethics_charges
Why did he do it? Just for the money? Because he's a meat-head?
I'd be surprised if we don't see a quick resignation from the new auditor.
How stupid would you have to be not to resign at this point?
I kind of assumed that's the case, but who knows.
What I'm *hoping* is that Riad tried to stuff in some of those tired old scam bonds which do the rounds, *and* also acted as the valuation expert. That would be maximally funny.
EDIT: Actually, "maximally funny" would be if Gabor Acs is their transaction advisor.
This is great! The bluntest language I've ever seen in an auditor response letter.
For an outfit like MB to handle it this way it must be that the company is completely, absolutely, ineptly, tripping-over-its-dong-ly incapable of presenting itself as anything but a scam.
As against simply being an obvious scam, like most MB audit clients.
Is that where you go to a restaurant; say nothing to each other for the whole meal; and put a lot of effort into not beating him/her senseless with a chair when he/she asks what "polenta" is for the 15,000th time?
It's too boring to really dig into. Googling some random phrases brings up activist sites etc with the same or very similar passages, but they may all be referenced in the notes.
The photos are hers - not bad to my inexpert eye.
If the real Snooki gives her blessing, you can read it free on-line somewhere. It seems to be compiled mainly from the content of a bunch of bee-activist web sites, but it's far too dull to spend much time on.
A PR, of course: http://www.prnewswire.com/news-releases/bless-the-bees-number-one-on-amazon-kindle-store-for-conservation-and-environment-222943861.html
His dad Snookie thinks it's probably pretty good even though he hasn't read it yet:
http://www.amazon.com/Bless-Bees-Extinction-Pollinators-ebook/product-reviews/B00EYOG02A/ref=cm_cr_dp_synop?ie=UTF8&showViewpoints=0&sortBy=bySubmissionDateDescending#R3M22VBGLUQK3L
5.0 out of 5 stars at last someone is gelping the bees, September 6, 2013
By SNOOKIE (ARIZONA) - See all my reviewsAmazon Verified Purchase(What's this?)
This review is from: Bless the Bees: The Pending Extinction of our Pollinators and What We Can Do to Stop It (Kindle Edition)
MR NAME IS GORDON EADE. KENNETH IS MY SON. I AM AN AUTHOR TO WHO USES THE PEN NAME SNOOKIE.I HAVEN'T READ THE BOOK YET BUT I WILL DO SO SOON.
YOU MAY BE INTERESTED IN WHAT I KNOW ABOUT THE AUTH0R OF THIS CLEVER LITTLE BOOK ABOUT BEES. KENNETH IS MY SON. I AM AN AUTHOR TOO AND USE THE PEN NAME SNOOKIE.AT THE AGE OF FIVE KEN COULD READ THE DAILY NEWSPAPER . ONE DAY WHEN HE CAME HOME FROM I ASKED HIM WHAT DID YOU LEARN IN SCHOOL TODAY. HE SAID THAT THE CLASS HAD TO RECITE LITTLE POEMS THAT THEY HAD LEARNED. SO I SAID LET ME HEAR YOUR POEM AND THE POEM WAS ABOUT 300 WORDS LONG. I SAID DID ANY OTHER STUDENTS HAVE LONG POEMS. HE SAID YES AND SAID DO YOU WANT TO HEAR THEM. WHEN I SAID YES HE RECITED THE POEMS OF THE ENTIRE CLASS WORD BY WORD.
IT WAS THEN I NEW THAT I HAD AN ATORNEY ON MY HANDS.AT THE AGE OF 16 HE GRADUATED FROM LAW SCHOOL AND HAD TO WAIT UNTIL THE AGE OF 18 TO TAKE THE CALIFORNIA BAR EXAMINATION.
Their response to the first PCAOB investigation back in 2005 is a classic: http://pcaobus.org/Inspections/Reports/Documents/2005_Malone_Bailey.pdf
The only people interested in these POS little companies are pennygambling riff-raff who don't read the financials anyway. Who cares if the company actually lost $2M rather than $1M? It's still a POS which nobody who matters cares about. People stupid enough to buy the shares of our clients are beyond help but at least it keeps them occupied and not out on the streets yammering spittle-flecked obscenities & waving their dongs at passers-by.
Does he have The Pennyking University on his resume?
Other VGLS things which haven't changed with the "new team":
- Late filing of quarterlies at OTC Markets. Q2 due 15 August; the usual late notification, this time signed by Tynan, claiming that they would file by 20 August; nothing filed yet.
- 100 share tape paints.
But they do have a twitter feed now: https://twitter.com/vglifesciences
That they are putting effort into this kind of marketing suggests to me that selling shares to penny-punters remains a core business activity for VGLS.
We intend to adopt a Code of Ethics during the coming year.
I know how it feels - every new year I make a resolution to be "ethical" but then somebody comes along and offers me half a KitKat to buy my mother or something ... what you gonna do?
Nothing in these filings, I think.
That's "tax lien".
CR still trying to stall on discovery in the bankruptcy case.
A whiny court filing once again says it's all too hard & expensive for CR. He's getting divorced, he has to support the kids, he's out of a job, the house is being foreclosed on, there's a tax lie.
Boo-frickn-hoo.
I guess it's that, but I suspect there was a lawyerly cat-fight over "Black admitted" (which seems to be what was intended by this change) versus "Black did not deny" formulations.
Conrad Black settles the ancient SEC charges: http://www.sec.gov/litigation/litreleases/2013/lr22781.htm
The thing which caught my eye is this wording: Black consented to the entry of the final judgment without denying the allegations of the Commission's complaint.
Not without "admitting or denying", just "without denying". Is that something new?
I think it was this, from Oct 2010: http://www.fbi.gov/miami/press-releases/2010/mm100710.htm
Here I was thinking how dumb these guys must be to fall for the same fake-hedge-fund-kickback sting the FBI has been running every couple of years or so, since Bermuda Shorts or before.
Falling for it *twice* sets a new low for pennyscammer muttonheaded-ness.
I always get a kick out of the way convicted pennyscammers' lawyers describe their clients' substance abuse issues in sentencing memos, in those rare cases where there's a criminal action.
Ones which stick in memory: Bruce Cowen was on every prescription upper and downer I'd ever heard of, plus a bunch new to me. Jon Latorella apparently smacked himself into oblivion every night with a combination of liquor and anti-depressants.
You'd have to be a pretty dumb and/or substance-addled little scammer to assume otherwise.
wholly owned subsidiary
Ummm, no it isn't. According to their Q1 report at OTC Markets, VGLS owns only 81.65% of VG Energy.
Doesn't increase one's confidence in the "new team" ....
That's a nice run - wonder who's giving it a shove?
Whatever else has changed at VGLS, the printing press is still running hot. An update at OTC Markets says 8.2M shares outstanding as of 8 August.
As of 31 March: 5.4M
As of 31 December: 3.0M
Marty Weisberg finally sentenced. Two years jail plus $500K+ restitution etc, versus the prosecution's 6+ year bid.
Seems light but not surprising. The other perps in the Xybernaut scam got probation or deferred prosecution agts. Marty was also up on charges of stealing from clients (shady Refco/BAWAG-ish types) so maybe that's the reason why the judge gave him time.
Marty Weisberg gets two years, plus $500K+ restitution etc.
The only Xybernaut scammer to do time so far? But he was also up on an unrelated charge of stealing form some clients.
http://www.americanlawyer.com/PubArticleALD.jsp?id=1202614378733&thepage=1
You hit a few of the "runners" the pee ons if you will.
I wouldn't even peon you, you filthy peasant!