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Tuesday, June 12, 2007 1:22:35 PM
Conversion Solutions CEO Harris gets arrested again
2007-06-12 11:43 ET - Street Wire
by Lee M. Webb
Conversion Solutions Holding Corp.'s de facto chief executive officer Rufus Paul Harris, a Georgia promoter being sued for fraud by the U.S. Securities and Exchange Commission (SEC), has been arrested for the second time this year. Mr. Harris, who spent most of January in jail after being nabbed for a probation violation, was arrested and charged with 16 counts of animal cruelty on June 5.
Mr. Harris's latest legal woes stem from his alleged mistreatment of horses. At least three horses under the care of the Georgia stock promoter, who also claims to be a wonderful horse-breeder, died before officials from the U.S. Department of Agriculture assisted by Georgia's Bartow County animal control officers removed the animals.
As previously reported by Stockwatch, the SEC suspended trading in Conversion and filed a civil suit against the company and Mr. Harris in the U.S. District Court for the Northern District of Georgia on Oct. 24, 2006.
At the time, the smelly promotion then trading on the OTC Bulletin Board purported to have a $7.3-billion asset portfolio consisting primarily of bonds and a book value of $70.71 per share. (All amounts are in U.S. dollars.)
According to the SEC complaint and supporting documentation, the outlandish claims made by Conversion and Mr. Harris with respect to the company owning billions of dollars worth of bonds are rubbish.
The SEC claims that Conversion and its chief executive officer committed securities fraud by making a series of false or misleading statements through news releases and regulatory filings regarding owning billions of dollars worth of bonds, fraudulently inflating the share price and trading volume in the process.
The U.S. regulator also alleges that Mr. Harris knowingly recorded fictitious assets on the company's books and certified fraudulent financial statements.
Mr. Harris did not bother to file an answer to the securities fraud lawsuit until April 24, five months after an entry of default had been filed.
The SEC followed up with a motion to strike the belated, unlawyered and sloppy answer, so Mr. Harris gave it another try with a reworked, still lawyerless and only slightly less garbled answer on May 15.
Penniless Conversion has not even hired a lawyer, so apart from Mr. Harris's muddled and procedurally improper attempts to slip some responses on behalf of the company into his belated answer to the securities fraud lawsuit, the corporation is not offering any defence to the SEC's allegations.
Demons galore
Mr. Harris, who has a number of promotional debacles to his credit, has taken to casting himself in the role of a noble and clever crusader for massive market reform valiantly battling against an evil host comprising crooked hedge funds, nasty naked short sellers, manipulative market makers, corrupt regulators and an assortment of other perceived miscreants.
Notwithstanding Mr. Harris's string of failures, his dismal performance as head of a purported multibillion-dollar company or his confused ramblings that point to a remarkable ignorance of even basic market operations and securities regulations, his crusading fantasy is evidently embraced by a naive and gullible cult-like following of Conversion shareholders who congregate on a members-only Internet chat forum opened by the Georgia promoter in February.
Peppering the often cryptic posts to his insular band of loyal followers on his restricted message board with emoticons, multiple exclamation marks, suggestive "Hmmms," talk of "monkeys humping footballs" and snippets of scripture, Mr. Harris natters on about "bashers," "the dark side" and "demons" amid frequent requests to his acolytes to offer up prayers for him and his family.
The Georgia promoter and his shrinking band of Internet zealots link many of his troubles -- from computer problems to the alleged shooting of two of his family's dogs -- to the dastardly deeds of the evil forces arrayed against him in a conspiratorial effort to thwart his quest for a complete market makeover.
Perhaps of little surprise to people familiar with Mr. Harris's fantastic tales, blame-shifting and evident penchant for histrionics, the imaginative tout attempts to tie his most recent legal troubles to his perceived corrupt adversaries.
The stage is set
Mr. Harris spends remarkably little time among his chat site converts discussing anything involving purported multibillion-dollar Conversion's actual business operations, which may well reflect the fact that the penniless company does not really conduct any business.
Instead, the Georgia promoter waxes on about market makers, illegal market activity, "air shares," "the RICO rings of Wall Street" and what he portrays as the inept or corrupt SEC.
(Quotations from Mr. Harris's Internet messages are reproduced here without notations reflecting spelling and grammar errors.)
"The SEC was founded to protect the investors not the fraudsters!!" Mr. Harris exclaimed in a May 24 post on his chat forum. "Just reading that seems dirty doesn't it!!"
According to Mr. Harris, "the SEC and other government agencies sit back and do nothing" about fraudulent market activity, but he has taken up the fight to get Conversion shareholders their "just reward."
"To the negative posters; You either find your peace with the truth of the situation or understand that I and others are working against the Beast and will fight the good fight until victory or just stop posting, vent on IHUB or HSM where negativity is sowed," the promoter went on in his rambling fashion.
"Yes, due to the system and illegal market activity we are where we are today!!" Mr. Harris subsequently wrote, apparently overlooking the matter of the company's bogus assets, no cash, no employees and no operations.
"I can not continue to be the glue that holds the sanity on this board, I have very important meetings coming up and will be around at lot less!!" the promoter advised.
"Things are going very well for us!!" he exclaimed as the stock, which previously traded as high as $4 per share, was heading to subpenny levels.
"Hold on tight we are headed over the last and the roughest rapids of the trip!!" Mr. Harris wrote, serving up one of the frequent warnings subsequently interpreted as being very prescient by his cultish followers.
"Those with peace and foresight; look around and you will see monkeys humping footballs, throwing rocks, throwing crap, and with sticks trying to poke holes in our rafts," the Georgia promoter said in closing out one of his arguably more coherent missives.
With that and similar posts, Mr. Harris's devoted audience was primed for his most recent production.
The drama begins
In fact, Mr. Harris's faithful fans are almost always at-the-ready for one of his performances, so his vague pronouncement marking the start of the latest drama had them quickly rallying around their beloved leader on June 5.
"My family needs your prayers really bad right now, Like never before!" Mr. Harris exclaimed in an opening that would beg for a near-breathless delivery in a stage performance.
"I can not fully explain, serious retaliation after yesterday's exposure of the illegal market activities!!" the promoter continued. "Combined forces using illegal gov corruption!!
"Heavy personal shelling inbound, the personal war has begun!!
"I have passed the torch to another to finish as a precaution!!
"I have done my best to inform you and show you the truth of the markets and how they use them!!
"Caution to all; Please be very careful with what you post, Do not put you livelihood (LLH) at risk!!
"Because of crazy activities, FINAL stage of NSS elimination has began for shareholder exit!!
"Should take 2-3 weeks for torch carrier to make necessary preparations for your exit.
"May God Bless the real shareholder victims of the MM's.
"We (family) are not in physical danger (LLH), they do not use physical means, The corruption is deeply rooted, they use alternate branches to attack via corruption.
"WE WILL PREVAIL, To those that feel this message, my families sacrifices are for you.
"I will continue the fight as long as I can!!
"GODSPEED and Keep your head above the water; If you feel like you are sinking please pray for guidance!!"
Amid speculation as to the nature of the latest nefarious assault on their beloved leader and chatter about his most recent claim of imminent naked short selling elimination, many of Mr. Harris's gullible followers offered up prayers for the safety of the Georgia promoter and his family.
As it turned out, it was not long before some light was shed upon Mr. Harris's new predicament by a poster who was shortly thereafter being vilified by Conversion zealots.
The villains appear
According to an anonymous poster who appeared on Mr. Harris's chat forum with news of his most recent troubles, the Georgia promoter had been arrested again.
It soon emerged that, unlike some of Mr. Harris's earlier arrests, the latest charges did not involve a probation violation or driving under the influence, but cruelty to animals.
Some of Mr. Harris's supporters quickly took on roles as inquisitors, at first barely concealing their suspicion that the poster was an infiltrator allied with Conversion's conspiratorial adversaries as they probed for more information.
As more details surfaced, it was reported that Mr. Harris had been charged with 16 counts of animal cruelty involving horses in his care.
Eventually, even a couple of Mr. Harris's supporters picked up the telephone and confirmed the arrest with the Bartow County Sheriff's office.
An even more disturbing report that at least one of the horses had died appeared on another chat site, this one a public forum that can be read by anyone with an Internet connection.
As the distressing news circulated, some of it fleshed out by James Gee, the former chairman of a controversial shareholders committee that played a role in ousting Mr. Harris from Conversion last year, zealots from the Georgia promoter's site sallied forth to denounce the reports and launch vicious cyber-attacks against Mr. Gee and other critics.
Mr. Gee, in particular, fired back, posting some rather telling information he had obtained from Mr. Harris's computer, including several pages of Conversion's banking transactions. Among other things, those transactions revealed a surprising number of questionable cash withdrawals.
Rather than raising questions or expressing any concerns over the nature of the transactions, Mr. Harris's supporters slammed Mr. Gee for disclosing the information, suggested that he, too, was allied with naked short sellers, thundered on about imminent lawsuits against him and even picked away at his divorce proceedings.
In any event, after accepting that Mr. Harris had indeed been arrested and charged with animal cruelty, the Georgia promoter's faithful followers insisted that they knew very well that he would not mistreat his beloved horses and began proclaiming that the charges against him must be bogus.
Several Conversion shareholders pointed out that, after showing up for a scheduled court hearing involving the SEC fraud suit, they had gathered at Mr. Harris's home last year and were treated to a barbecue.
As it happened, it was raining that day, so Mr. Harris served his guests in the stable, where they got a look at his horses. Reportedly, the horses were all well cared-for and healthy.
As previously reported by Stockwatch, stables valued at $277,000 were recorded as a Conversion asset in unaudited financial statements for the period ending March 31, 2006.
Strangely, when Conversion filed what passed for its audited financial statements for the year ending June 30, 2006, the stables disappeared from the balance sheet without even so much as a hint as to what might have transpired.
While the stables may be more pertinent to the present discussion, more than $13.25-million of a previously reported $33.12-million interest receivable also vanished with nary an explanation.
Apparently the stables have since disappeared from Mr. Harris's control, too. Interestingly, over the past month or so, the Georgia promoter has been musing about moving and has asked his chat site members to keep an eye open for a place to lease or rent that includes a horse pasture.
The plot thickens
After it became evident to even Mr. Harris's most ardent supporters that he had indeed been arrested, he finally got around to acknowledging that he had been charged with "16 accounts of cruelty to animals."
"I never even hit a cell, booked and released," the promoter added.
According to Mr. Harris, that incident was "only the tip of the iceberg of crazy stuff" that had been happening to his family.
"It is a full attack," Mr. Harris wrote in a June 6 message to his chat site.
"Those that know me will tell you that I love my horses as if they were my children and treated them as such," the promoter went on. "Interesting and cool stuff and all in retaliation to my post.
"The first time they showed up and tried this crap was 2.5 hours after my answer hit the federal court in Atlanta.
"Then after my exposure of the illegal trading on here they showed up with reinforcements and forced the issue, locals did not cooperate the first time, but this time they used fed's and threaten to pull the county's funding if they did not move!!"
Mr. Harris also got around to discussing the reports that horses had died.
"I Had one horse die several months ago, I even posted it on the site!!" Mr. Harris wrote. "She was a cribber and cribbed on a wild cherry tree!!"
Cribbing, which can be attributed to a number of causes including lack of long roughage in the diet, stress or simply a bad habit, is when a horse seizes a hard object such as part of the manger or stall or some piece of wood in its teeth and sucks in air, sometimes causing the stomach to distend.
Wild cherry leaves, which contain cyanide, can be toxic and sometimes even fatal to livestock such as cows, sheep and horses, so farmers often remove the trees from pasture areas accessible to their animals.
Given that it is reportedly the ingestion of wild cherry leaves, particularly wilted or dried leaves, that can cause serious problems, especially to pregnant mares and foals, it is not clear what role simply cribbing might have played in the adult horse's death.
"No conditional problems, the state tried to take them the first time, 2.5 hours on the Tuesday after the answer to the SEC's response!!" Mr. Harris went on, again drawing a link to the regulatory action against him. "I told them that it was not going to happen, take me to court and prove your claim!!
"While they were on my property (that same Tuesday) they put some kind of feed (all grain) and brought out molded hay!!
"I refused to allow them to do it, but they placed it in the field and had a state agriculture agent with written order with them to do so!!
"The next day my Best stallion and an expecting mare died!!"
Mr. Harris claims that he had the horses picked up for an autopsy. As will be discussed later in this article, however, another agency claims credit for having the dead animals autopsied.
"The state intercepted the results and I have not seen them to date!!" the promoter wrote.
"We went to court and they could not prove anything," he continued. "I had all records for the horses disproving the claims and told them I was going to counter sue when the results came in for what they have done!!
"After I posted on here the other day, I have been told that agents showed up at the county, and told the county that if they did not charge me their funding was at risk!!
"The court case was dismissed immediately (same day) and then state and FED officials showed up and charged me!!
"The key to the dismissal was to prevent the UGA autopsy results from being disclosed, they were the result of an order of the court to prove their claim!!
"Yes they took the horses!!
"Yes, my daughters have not stopped crying over all this!!
"People, this was the last straw for me, they can play with me all they want too but when they took my horses, it is now WAR!!
"James Gee, God blessed your wife and delivered her from your evil ways, Maybe I will have a talk with her soon!!
"To the rest of you with motives, I will expose everything you have done before this is over!!
"Yes, I have recently spoken with the SEC and they now want to discuss a settlement!!"
Based on claims in the promoter's rambling posts, many of his faithful followers are now convinced that the SEC, perhaps as part of its collusive role with conspiratorial market miscreants, influenced a federal agency to lean on state and local agencies to bring trumped-up charges against Mr. Harris.
Some of the wilder conspiracy theorists who congregate on Mr. Harris's members-only chat site even go so far as to suggest that representatives of those agencies deliberately poisoned his horses.
Mr. Harris's talk of the SEC now wanting to discuss a settlement fits in well with the fantasies of those who believe that the regulator is trying to weasel out of the securities fraud lawsuit against Mr. Harris and Conversion because it does not have enough evidence to prevail in the case.
The Georgia promoter is evidently quite happy to let those fantasies continue.
Meanwhile, another account of Mr. Harris's latest legal entanglements is no fantasy, but an animal cruelty horror story.
Bartow horror story
As noted in the opening, representatives from the Bartow County animal control office were called in to assist state and federal officials regarding complaints over Mr. Harris's reported mistreatment of his horses.
On June 8, Stockwatch contacted Bartow County animal control director Debbie Elrod, who is quite familiar with the case. By Ms. Elrod's account, Mr. Harris's story is a pile of horse-puckey, so to speak.
According to Ms. Elrod, the animal cruelty investigation had been going on for quite some time before charges were laid and state agricultural officials had given Mr. Harris ample opportunity to address the problems, but nothing was done.
Ms. Elrod's office was asked to do a follow-up on the case, including driving out to Mr. Harris's property to have a look at the horses.
Once representatives of the Bartow animal control office reached the property, Ms. Elrod says the state agricultural officials were called in order to determine exactly what they needed to know about the situation.
"Well, what condition are they in?" Ms. Elrod recalls the state officials asking.
"We're like, 'Well, they're starving to death, they're literally starving to death,'" Ms. Elrod says they replied.
According to Ms. Elrod, state officials joined Bartow county officers at the property and together they assessed the situation.
"We had asked him (Mr. Harris) to contact a veterinarian to get him out there to look at the animals and to see what needed to be done to get the care that they were needing and to try to get some hay and some feed on the property to start caring for them," Ms. Elrod says. "Well, he did not do that.
"So, we actually ended up having to get a court order to go onto the property -- because this is not something that we typically deal with every day and we had no means of housing the animals, so we had to find appropriate shelter for the horses -- so we got a court order telling him that he could not move the animals and giving us permission to go on the property to feed and take care of them every day.
"So, we started buying all the feed and all the hay and taking it out there and we were feeding them and caring for them and things of that nature.
"Well, two of the adult horses had already died."
Ms. Elrod says that before they managed to get the court order, Mr. Harris moved three of the horses to nearby Gordon county.
"He told us one of them he gave away and two he had in a pasture up there," Ms. Elrod told Stockwatch. "Well, you know, one horse fell over dead when it walked off the livestock trailer is what we were told and he apparently drug it out to the back of the property and left it there."
Later in the interview, Ms. Elrod said that two of the other horses Mr. Harris had transported to Gordon county, apparently weakened by malnutrition, must have fallen down in the stock trailer because they had injuries to their legs.
"He just stuck them out in the pasture," Ms. Elrod told Stockwatch. "He didn't bother to try to get any help for them, either."
Gordon county officials are reportedly handling the matter of the three horses, including the dead one, that were moved to that jurisdiction.
"We sent the two adult horses and one of the babies off to have a necropsy done and the information we've got all leads to animal cruelty," Ms. Elrod states.
"You know, when you can't afford to feed your horses or you can't take care of them, you start trying to find a way out," Ms. Elrod remarked to Stockwatch. "You start trying to sell them or start trying to find somebody that will help you and he just wouldn't do that.
"He just got too out of hand.
"So, we ended up losing three of the adults and two of the babies, one was stillborn and the other was born prematurely."
According to Ms. Elrod, the remaining animals have now all been impounded and removed from Mr. Harris's property.
"We actually went to his property for two weeks, twice a day, feeding and watering them seven days a week; and then once we found a place to take them to, we removed them from the property," the Bartow animal control director says.
Ms. Elrod says that there was not any stable or similar structure on the property where Mr. Harris was keeping his starving horses.
"It was a fenced-in area that was maybe two to three acres, if it was that -- maybe not that big -- but with 17 horses on it, gnawing at it, they were already down to the dirt," Ms. Elrod told Stockwatch. "There was no grass or anything in the fenced-in area at all.
"And when we went to the property, like I say, there was no hay, there was no feed.
"He had an automatic waterer there, but it was full of algae.
"He just wasn't doing what he needed to do."
Ms. Elrod scoffs at Mr. Harris's suggestion that the hay and feed provided under court order by her office killed two of his horses.
According to the Bartow animal control director, only one of the horses originally inspected by two veterinarians "appeared to be okay," while the rest were in horrible condition.
It is clear that Ms. Elrod believes that the responsibility for the dead horses rests squarely with Mr. Harris.
Ms. Elrod says that her office, along with state and federal officials, have all the documentation needed to support what they did.
"We wouldn't have done what we did, if we didn't have documentation to back us up," she told Stockwatch.
Ms. Elrod suggests that it may be some time, perhaps as long as a year, before the case will come before a judge in the Georgia Superior Court in Cartersville.
Meanwhile, the surviving horses are out of Mr. Harris's control and receiving proper care.
The seizure of Mr. Harris's horses appears to have put paid to a contest that he served up as one of many diversions for his fans on his private chat site.
The contest
Earlier this year, Mr. Harris announced a contest for his chat site members to submit names for the foals that were expected. The Georgia promoter said that he would give 100,000 Conversion shares apiece for the top three names submitted.
Based on Mr. Harris's touted book value of more than $70 per share for the overblown promotion last October, the prizes would have carried a handsome purported value of more than $7-million each.
Of course, with Conversion's shares now slopping around in the grey market for a penny a share, the proposed prizes would only fetch $1,000 each, if the winners could unload them at all.
Amid a number of squabbles, the contest dragged on for weeks as Mr. Harris's followers submitted dozens of names, participated in an early poll to pick their own favourites, the promoter's family selected short lists of names and more polls were conducted.
With Mr. Harris facing 16 counts of cruelty to animals, the horses seized and two foals dead, it is not clear what will become of the cockamamie contest, though picking winners at this point might even seem macabre to the promoter's most ardent believers.
Meanwhile, there is not much market competition for Conversion shares. With only 50,100 shares changing hands in four grey market trades, Conversion closed at 1.2 cents on June 11.
Stockwatch will continue to follow developments as the saga continues.
Comments regarding this article may be sent to lwebb@stockwatch.com.
(More information regarding Conversion Solutions Holdings Corp. is available in Stockwatch articles published on Oct. 13, 16, 18, 20, 24 and 26; Nov. 2, 3, 7, 10 and 16; Dec. 5, 7 and 11, 2006; and May 9, 10, 11, 14, 17 and 22, 2007.)
2007-06-12 11:43 ET - Street Wire
by Lee M. Webb
Conversion Solutions Holding Corp.'s de facto chief executive officer Rufus Paul Harris, a Georgia promoter being sued for fraud by the U.S. Securities and Exchange Commission (SEC), has been arrested for the second time this year. Mr. Harris, who spent most of January in jail after being nabbed for a probation violation, was arrested and charged with 16 counts of animal cruelty on June 5.
Mr. Harris's latest legal woes stem from his alleged mistreatment of horses. At least three horses under the care of the Georgia stock promoter, who also claims to be a wonderful horse-breeder, died before officials from the U.S. Department of Agriculture assisted by Georgia's Bartow County animal control officers removed the animals.
As previously reported by Stockwatch, the SEC suspended trading in Conversion and filed a civil suit against the company and Mr. Harris in the U.S. District Court for the Northern District of Georgia on Oct. 24, 2006.
At the time, the smelly promotion then trading on the OTC Bulletin Board purported to have a $7.3-billion asset portfolio consisting primarily of bonds and a book value of $70.71 per share. (All amounts are in U.S. dollars.)
According to the SEC complaint and supporting documentation, the outlandish claims made by Conversion and Mr. Harris with respect to the company owning billions of dollars worth of bonds are rubbish.
The SEC claims that Conversion and its chief executive officer committed securities fraud by making a series of false or misleading statements through news releases and regulatory filings regarding owning billions of dollars worth of bonds, fraudulently inflating the share price and trading volume in the process.
The U.S. regulator also alleges that Mr. Harris knowingly recorded fictitious assets on the company's books and certified fraudulent financial statements.
Mr. Harris did not bother to file an answer to the securities fraud lawsuit until April 24, five months after an entry of default had been filed.
The SEC followed up with a motion to strike the belated, unlawyered and sloppy answer, so Mr. Harris gave it another try with a reworked, still lawyerless and only slightly less garbled answer on May 15.
Penniless Conversion has not even hired a lawyer, so apart from Mr. Harris's muddled and procedurally improper attempts to slip some responses on behalf of the company into his belated answer to the securities fraud lawsuit, the corporation is not offering any defence to the SEC's allegations.
Demons galore
Mr. Harris, who has a number of promotional debacles to his credit, has taken to casting himself in the role of a noble and clever crusader for massive market reform valiantly battling against an evil host comprising crooked hedge funds, nasty naked short sellers, manipulative market makers, corrupt regulators and an assortment of other perceived miscreants.
Notwithstanding Mr. Harris's string of failures, his dismal performance as head of a purported multibillion-dollar company or his confused ramblings that point to a remarkable ignorance of even basic market operations and securities regulations, his crusading fantasy is evidently embraced by a naive and gullible cult-like following of Conversion shareholders who congregate on a members-only Internet chat forum opened by the Georgia promoter in February.
Peppering the often cryptic posts to his insular band of loyal followers on his restricted message board with emoticons, multiple exclamation marks, suggestive "Hmmms," talk of "monkeys humping footballs" and snippets of scripture, Mr. Harris natters on about "bashers," "the dark side" and "demons" amid frequent requests to his acolytes to offer up prayers for him and his family.
The Georgia promoter and his shrinking band of Internet zealots link many of his troubles -- from computer problems to the alleged shooting of two of his family's dogs -- to the dastardly deeds of the evil forces arrayed against him in a conspiratorial effort to thwart his quest for a complete market makeover.
Perhaps of little surprise to people familiar with Mr. Harris's fantastic tales, blame-shifting and evident penchant for histrionics, the imaginative tout attempts to tie his most recent legal troubles to his perceived corrupt adversaries.
The stage is set
Mr. Harris spends remarkably little time among his chat site converts discussing anything involving purported multibillion-dollar Conversion's actual business operations, which may well reflect the fact that the penniless company does not really conduct any business.
Instead, the Georgia promoter waxes on about market makers, illegal market activity, "air shares," "the RICO rings of Wall Street" and what he portrays as the inept or corrupt SEC.
(Quotations from Mr. Harris's Internet messages are reproduced here without notations reflecting spelling and grammar errors.)
"The SEC was founded to protect the investors not the fraudsters!!" Mr. Harris exclaimed in a May 24 post on his chat forum. "Just reading that seems dirty doesn't it!!"
According to Mr. Harris, "the SEC and other government agencies sit back and do nothing" about fraudulent market activity, but he has taken up the fight to get Conversion shareholders their "just reward."
"To the negative posters; You either find your peace with the truth of the situation or understand that I and others are working against the Beast and will fight the good fight until victory or just stop posting, vent on IHUB or HSM where negativity is sowed," the promoter went on in his rambling fashion.
"Yes, due to the system and illegal market activity we are where we are today!!" Mr. Harris subsequently wrote, apparently overlooking the matter of the company's bogus assets, no cash, no employees and no operations.
"I can not continue to be the glue that holds the sanity on this board, I have very important meetings coming up and will be around at lot less!!" the promoter advised.
"Things are going very well for us!!" he exclaimed as the stock, which previously traded as high as $4 per share, was heading to subpenny levels.
"Hold on tight we are headed over the last and the roughest rapids of the trip!!" Mr. Harris wrote, serving up one of the frequent warnings subsequently interpreted as being very prescient by his cultish followers.
"Those with peace and foresight; look around and you will see monkeys humping footballs, throwing rocks, throwing crap, and with sticks trying to poke holes in our rafts," the Georgia promoter said in closing out one of his arguably more coherent missives.
With that and similar posts, Mr. Harris's devoted audience was primed for his most recent production.
The drama begins
In fact, Mr. Harris's faithful fans are almost always at-the-ready for one of his performances, so his vague pronouncement marking the start of the latest drama had them quickly rallying around their beloved leader on June 5.
"My family needs your prayers really bad right now, Like never before!" Mr. Harris exclaimed in an opening that would beg for a near-breathless delivery in a stage performance.
"I can not fully explain, serious retaliation after yesterday's exposure of the illegal market activities!!" the promoter continued. "Combined forces using illegal gov corruption!!
"Heavy personal shelling inbound, the personal war has begun!!
"I have passed the torch to another to finish as a precaution!!
"I have done my best to inform you and show you the truth of the markets and how they use them!!
"Caution to all; Please be very careful with what you post, Do not put you livelihood (LLH) at risk!!
"Because of crazy activities, FINAL stage of NSS elimination has began for shareholder exit!!
"Should take 2-3 weeks for torch carrier to make necessary preparations for your exit.
"May God Bless the real shareholder victims of the MM's.
"We (family) are not in physical danger (LLH), they do not use physical means, The corruption is deeply rooted, they use alternate branches to attack via corruption.
"WE WILL PREVAIL, To those that feel this message, my families sacrifices are for you.
"I will continue the fight as long as I can!!
"GODSPEED and Keep your head above the water; If you feel like you are sinking please pray for guidance!!"
Amid speculation as to the nature of the latest nefarious assault on their beloved leader and chatter about his most recent claim of imminent naked short selling elimination, many of Mr. Harris's gullible followers offered up prayers for the safety of the Georgia promoter and his family.
As it turned out, it was not long before some light was shed upon Mr. Harris's new predicament by a poster who was shortly thereafter being vilified by Conversion zealots.
The villains appear
According to an anonymous poster who appeared on Mr. Harris's chat forum with news of his most recent troubles, the Georgia promoter had been arrested again.
It soon emerged that, unlike some of Mr. Harris's earlier arrests, the latest charges did not involve a probation violation or driving under the influence, but cruelty to animals.
Some of Mr. Harris's supporters quickly took on roles as inquisitors, at first barely concealing their suspicion that the poster was an infiltrator allied with Conversion's conspiratorial adversaries as they probed for more information.
As more details surfaced, it was reported that Mr. Harris had been charged with 16 counts of animal cruelty involving horses in his care.
Eventually, even a couple of Mr. Harris's supporters picked up the telephone and confirmed the arrest with the Bartow County Sheriff's office.
An even more disturbing report that at least one of the horses had died appeared on another chat site, this one a public forum that can be read by anyone with an Internet connection.
As the distressing news circulated, some of it fleshed out by James Gee, the former chairman of a controversial shareholders committee that played a role in ousting Mr. Harris from Conversion last year, zealots from the Georgia promoter's site sallied forth to denounce the reports and launch vicious cyber-attacks against Mr. Gee and other critics.
Mr. Gee, in particular, fired back, posting some rather telling information he had obtained from Mr. Harris's computer, including several pages of Conversion's banking transactions. Among other things, those transactions revealed a surprising number of questionable cash withdrawals.
Rather than raising questions or expressing any concerns over the nature of the transactions, Mr. Harris's supporters slammed Mr. Gee for disclosing the information, suggested that he, too, was allied with naked short sellers, thundered on about imminent lawsuits against him and even picked away at his divorce proceedings.
In any event, after accepting that Mr. Harris had indeed been arrested and charged with animal cruelty, the Georgia promoter's faithful followers insisted that they knew very well that he would not mistreat his beloved horses and began proclaiming that the charges against him must be bogus.
Several Conversion shareholders pointed out that, after showing up for a scheduled court hearing involving the SEC fraud suit, they had gathered at Mr. Harris's home last year and were treated to a barbecue.
As it happened, it was raining that day, so Mr. Harris served his guests in the stable, where they got a look at his horses. Reportedly, the horses were all well cared-for and healthy.
As previously reported by Stockwatch, stables valued at $277,000 were recorded as a Conversion asset in unaudited financial statements for the period ending March 31, 2006.
Strangely, when Conversion filed what passed for its audited financial statements for the year ending June 30, 2006, the stables disappeared from the balance sheet without even so much as a hint as to what might have transpired.
While the stables may be more pertinent to the present discussion, more than $13.25-million of a previously reported $33.12-million interest receivable also vanished with nary an explanation.
Apparently the stables have since disappeared from Mr. Harris's control, too. Interestingly, over the past month or so, the Georgia promoter has been musing about moving and has asked his chat site members to keep an eye open for a place to lease or rent that includes a horse pasture.
The plot thickens
After it became evident to even Mr. Harris's most ardent supporters that he had indeed been arrested, he finally got around to acknowledging that he had been charged with "16 accounts of cruelty to animals."
"I never even hit a cell, booked and released," the promoter added.
According to Mr. Harris, that incident was "only the tip of the iceberg of crazy stuff" that had been happening to his family.
"It is a full attack," Mr. Harris wrote in a June 6 message to his chat site.
"Those that know me will tell you that I love my horses as if they were my children and treated them as such," the promoter went on. "Interesting and cool stuff and all in retaliation to my post.
"The first time they showed up and tried this crap was 2.5 hours after my answer hit the federal court in Atlanta.
"Then after my exposure of the illegal trading on here they showed up with reinforcements and forced the issue, locals did not cooperate the first time, but this time they used fed's and threaten to pull the county's funding if they did not move!!"
Mr. Harris also got around to discussing the reports that horses had died.
"I Had one horse die several months ago, I even posted it on the site!!" Mr. Harris wrote. "She was a cribber and cribbed on a wild cherry tree!!"
Cribbing, which can be attributed to a number of causes including lack of long roughage in the diet, stress or simply a bad habit, is when a horse seizes a hard object such as part of the manger or stall or some piece of wood in its teeth and sucks in air, sometimes causing the stomach to distend.
Wild cherry leaves, which contain cyanide, can be toxic and sometimes even fatal to livestock such as cows, sheep and horses, so farmers often remove the trees from pasture areas accessible to their animals.
Given that it is reportedly the ingestion of wild cherry leaves, particularly wilted or dried leaves, that can cause serious problems, especially to pregnant mares and foals, it is not clear what role simply cribbing might have played in the adult horse's death.
"No conditional problems, the state tried to take them the first time, 2.5 hours on the Tuesday after the answer to the SEC's response!!" Mr. Harris went on, again drawing a link to the regulatory action against him. "I told them that it was not going to happen, take me to court and prove your claim!!
"While they were on my property (that same Tuesday) they put some kind of feed (all grain) and brought out molded hay!!
"I refused to allow them to do it, but they placed it in the field and had a state agriculture agent with written order with them to do so!!
"The next day my Best stallion and an expecting mare died!!"
Mr. Harris claims that he had the horses picked up for an autopsy. As will be discussed later in this article, however, another agency claims credit for having the dead animals autopsied.
"The state intercepted the results and I have not seen them to date!!" the promoter wrote.
"We went to court and they could not prove anything," he continued. "I had all records for the horses disproving the claims and told them I was going to counter sue when the results came in for what they have done!!
"After I posted on here the other day, I have been told that agents showed up at the county, and told the county that if they did not charge me their funding was at risk!!
"The court case was dismissed immediately (same day) and then state and FED officials showed up and charged me!!
"The key to the dismissal was to prevent the UGA autopsy results from being disclosed, they were the result of an order of the court to prove their claim!!
"Yes they took the horses!!
"Yes, my daughters have not stopped crying over all this!!
"People, this was the last straw for me, they can play with me all they want too but when they took my horses, it is now WAR!!
"James Gee, God blessed your wife and delivered her from your evil ways, Maybe I will have a talk with her soon!!
"To the rest of you with motives, I will expose everything you have done before this is over!!
"Yes, I have recently spoken with the SEC and they now want to discuss a settlement!!"
Based on claims in the promoter's rambling posts, many of his faithful followers are now convinced that the SEC, perhaps as part of its collusive role with conspiratorial market miscreants, influenced a federal agency to lean on state and local agencies to bring trumped-up charges against Mr. Harris.
Some of the wilder conspiracy theorists who congregate on Mr. Harris's members-only chat site even go so far as to suggest that representatives of those agencies deliberately poisoned his horses.
Mr. Harris's talk of the SEC now wanting to discuss a settlement fits in well with the fantasies of those who believe that the regulator is trying to weasel out of the securities fraud lawsuit against Mr. Harris and Conversion because it does not have enough evidence to prevail in the case.
The Georgia promoter is evidently quite happy to let those fantasies continue.
Meanwhile, another account of Mr. Harris's latest legal entanglements is no fantasy, but an animal cruelty horror story.
Bartow horror story
As noted in the opening, representatives from the Bartow County animal control office were called in to assist state and federal officials regarding complaints over Mr. Harris's reported mistreatment of his horses.
On June 8, Stockwatch contacted Bartow County animal control director Debbie Elrod, who is quite familiar with the case. By Ms. Elrod's account, Mr. Harris's story is a pile of horse-puckey, so to speak.
According to Ms. Elrod, the animal cruelty investigation had been going on for quite some time before charges were laid and state agricultural officials had given Mr. Harris ample opportunity to address the problems, but nothing was done.
Ms. Elrod's office was asked to do a follow-up on the case, including driving out to Mr. Harris's property to have a look at the horses.
Once representatives of the Bartow animal control office reached the property, Ms. Elrod says the state agricultural officials were called in order to determine exactly what they needed to know about the situation.
"Well, what condition are they in?" Ms. Elrod recalls the state officials asking.
"We're like, 'Well, they're starving to death, they're literally starving to death,'" Ms. Elrod says they replied.
According to Ms. Elrod, state officials joined Bartow county officers at the property and together they assessed the situation.
"We had asked him (Mr. Harris) to contact a veterinarian to get him out there to look at the animals and to see what needed to be done to get the care that they were needing and to try to get some hay and some feed on the property to start caring for them," Ms. Elrod says. "Well, he did not do that.
"So, we actually ended up having to get a court order to go onto the property -- because this is not something that we typically deal with every day and we had no means of housing the animals, so we had to find appropriate shelter for the horses -- so we got a court order telling him that he could not move the animals and giving us permission to go on the property to feed and take care of them every day.
"So, we started buying all the feed and all the hay and taking it out there and we were feeding them and caring for them and things of that nature.
"Well, two of the adult horses had already died."
Ms. Elrod says that before they managed to get the court order, Mr. Harris moved three of the horses to nearby Gordon county.
"He told us one of them he gave away and two he had in a pasture up there," Ms. Elrod told Stockwatch. "Well, you know, one horse fell over dead when it walked off the livestock trailer is what we were told and he apparently drug it out to the back of the property and left it there."
Later in the interview, Ms. Elrod said that two of the other horses Mr. Harris had transported to Gordon county, apparently weakened by malnutrition, must have fallen down in the stock trailer because they had injuries to their legs.
"He just stuck them out in the pasture," Ms. Elrod told Stockwatch. "He didn't bother to try to get any help for them, either."
Gordon county officials are reportedly handling the matter of the three horses, including the dead one, that were moved to that jurisdiction.
"We sent the two adult horses and one of the babies off to have a necropsy done and the information we've got all leads to animal cruelty," Ms. Elrod states.
"You know, when you can't afford to feed your horses or you can't take care of them, you start trying to find a way out," Ms. Elrod remarked to Stockwatch. "You start trying to sell them or start trying to find somebody that will help you and he just wouldn't do that.
"He just got too out of hand.
"So, we ended up losing three of the adults and two of the babies, one was stillborn and the other was born prematurely."
According to Ms. Elrod, the remaining animals have now all been impounded and removed from Mr. Harris's property.
"We actually went to his property for two weeks, twice a day, feeding and watering them seven days a week; and then once we found a place to take them to, we removed them from the property," the Bartow animal control director says.
Ms. Elrod says that there was not any stable or similar structure on the property where Mr. Harris was keeping his starving horses.
"It was a fenced-in area that was maybe two to three acres, if it was that -- maybe not that big -- but with 17 horses on it, gnawing at it, they were already down to the dirt," Ms. Elrod told Stockwatch. "There was no grass or anything in the fenced-in area at all.
"And when we went to the property, like I say, there was no hay, there was no feed.
"He had an automatic waterer there, but it was full of algae.
"He just wasn't doing what he needed to do."
Ms. Elrod scoffs at Mr. Harris's suggestion that the hay and feed provided under court order by her office killed two of his horses.
According to the Bartow animal control director, only one of the horses originally inspected by two veterinarians "appeared to be okay," while the rest were in horrible condition.
It is clear that Ms. Elrod believes that the responsibility for the dead horses rests squarely with Mr. Harris.
Ms. Elrod says that her office, along with state and federal officials, have all the documentation needed to support what they did.
"We wouldn't have done what we did, if we didn't have documentation to back us up," she told Stockwatch.
Ms. Elrod suggests that it may be some time, perhaps as long as a year, before the case will come before a judge in the Georgia Superior Court in Cartersville.
Meanwhile, the surviving horses are out of Mr. Harris's control and receiving proper care.
The seizure of Mr. Harris's horses appears to have put paid to a contest that he served up as one of many diversions for his fans on his private chat site.
The contest
Earlier this year, Mr. Harris announced a contest for his chat site members to submit names for the foals that were expected. The Georgia promoter said that he would give 100,000 Conversion shares apiece for the top three names submitted.
Based on Mr. Harris's touted book value of more than $70 per share for the overblown promotion last October, the prizes would have carried a handsome purported value of more than $7-million each.
Of course, with Conversion's shares now slopping around in the grey market for a penny a share, the proposed prizes would only fetch $1,000 each, if the winners could unload them at all.
Amid a number of squabbles, the contest dragged on for weeks as Mr. Harris's followers submitted dozens of names, participated in an early poll to pick their own favourites, the promoter's family selected short lists of names and more polls were conducted.
With Mr. Harris facing 16 counts of cruelty to animals, the horses seized and two foals dead, it is not clear what will become of the cockamamie contest, though picking winners at this point might even seem macabre to the promoter's most ardent believers.
Meanwhile, there is not much market competition for Conversion shares. With only 50,100 shares changing hands in four grey market trades, Conversion closed at 1.2 cents on June 11.
Stockwatch will continue to follow developments as the saga continues.
Comments regarding this article may be sent to lwebb@stockwatch.com.
(More information regarding Conversion Solutions Holdings Corp. is available in Stockwatch articles published on Oct. 13, 16, 18, 20, 24 and 26; Nov. 2, 3, 7, 10 and 16; Dec. 5, 7 and 11, 2006; and May 9, 10, 11, 14, 17 and 22, 2007.)
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