"Around this time frame, Vendetti would notify us that Emiro had completed the contractual relationships with the European banks required to execute the credit lines and receive the Dabbs SWIFT. And Dabbs, along with her new hire Mitch Sepentiack, would notify us of a 6 billion USD extension to the Ismet Paez investment contract. Sabra and Mitch would travel to Aruba to execute the extension.
Despite its officer’s representations, for "Holdings Corporation", CSHD held very little. Harris and Stanley falsely represented that CSHD owned and maintained hundreds of millions of dollars in assets, including a "UCC security Note" worth $310 million that CSHD had purchased for $40 million. Harris issued a series of press releases claiming that CSHD owned or controlled entire issuance of foreign sovereign bonds of Venezuela and Finland worth billions of dollars and paying tens of millions in annual interest. Several of these press releases named Stanley alongside Harris as a CSHD contact person. CSHD's 2006 10K filed with the SEC by Harris, claimed assets of $800 million counting the foreign sovereign bonds and the "UCC Security Note" along with income of nearly $20 million in interest from the bonds. CSHD's only income. Stanley and Harris signed a management representation letter in which they attested to the accuracy of financial information provided to an outside auditor who prepared the financial statements attached to the SEC filings. Both Stanley and Harris solicited individual investors and gave statements in radio interviews that confirmed ownership of the sovereign bonds and promoted the value of the company stock.
Investors testified that they relied on these misrepresentations when choosing to invest. All the while, CSHD had few (if any) real assets. The worthless "UCC Security Note" was not legitimate, and CSHD had not purchased it for $40 million. CSHD did not own or control the foreign bonds. The company never earned any revenue and was financed solely by $1.8 million in cash from investors, from which Harris and Stanley each drew more than $300,000 in salary. The co-defendants held significant equity in CSHD. Through much of September 2006, CSHD stock traded around one dollar per share. At the end of that month, as the misrepresentations in press releases and SEC filings took hold, the stock price tripled in forty-eight hours to over three dollars per share and it remained artificially elevated for several weeks. With the "Pump in progress, the "Dump" began. The co-defendants each transferred substantial amounts of stock to close family members who sold hundreds of thousands of shares at inflated prices.
On the eve of my first day of defense after only a few hours of presentation, I would be approached by two armed men who would threaten to murder my family if I returned to trial the next day. They were very insistent."
