Hi Seahag,
I have been duped into my share of frauds in the past, and every time the “want to believe” syndrome was the driving factor. I approached SEVU with a skeptical, but open, mind. I am sure you recall the skepticism I had when we coordinated on a meeting agenda. I recognized that I was again afflicted with the “want to believe syndrome”. The story was GREAT. The SEC fillings showed major growth in sales and profits. (BTW, willfully filling false SEC documents are in itself a criminal offense). There were, however, major questions to be answered. For example, why were accounts receivable growing at such a horrendous rate? What were the terms of the dealer floor-plan arrangements? Why has so much more stock been issued? What’s the deal with the convertible debentures? Why are holders of convertible debentures having such a hard time redeeming their shares? What is the nature of RM’s criminal background? Why was it not disclosed? Does RM think that SEVU has a credibility issue?
As I remember, all these issues were discussed at that meeting, and we had a firm agenda, including many HARD questions. But upon arriving at SEVU headquarters, we were greeted with a handout stating that NO ACCOUNTING ISSUES WILL BE discussed. And during the “open-meeting”, all accounting issues were in fact not discussed. Except one…. Rich stated that he had repaid his loan from the company.
There were other issues raised at that meeting: For example, the purchase of a 20% interest in the springs for 150,000 shares, which by the boards approval, was to be paid back by RM within a certain number of days. To date, we still have no evidence of the payback. I raised, as I’m sure you remember, the issue of the missing stock certificates. Subsequently, RM answered those questions to my satisfaction, and I AGAIN “wanted to believe.”
Back to the original question…why did I continue to invest after I knew it was a fraud? Truth be told, I didn’t know for sure, although I should have, until RM failed to file the required documents with the SEC about his publicly declared purchases of SEVU stock. Purchases in April, documents filed by May 10. No fillings. No fillings on the supposed Private Placement with officers for $1.5M either. And to top it off, NO PROXY!!!
So Seahag, that’s my story with SEVU. As I told you in a PM a couple of months ago, my attention has been distracted because THE major holding I have (SUND) is about to taken over, it’s coming soon, and I have to play this one right. (Anyone that doubts this is welcome to contact Seahag for conformation).
One last comment…..look at the Raging Bull board of FDNI……people “believed” all the way down…even with a 99% loss, they “still believed”.
Bill Branum
