Frustrated or Scammed? W/ names like Careaga & Otto running the show it's your best guess.
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To offset the dwindling bid price, Nannaco’s CEO, Steve Carreaga, a former volunteer fireman and reserve police officer in Washington state, set about to “reverse split” the rapidly diluted shares on four occasions while the S-8 stock was being dumped.
Carreaga announced reverse splits for Nannaco that resulted in staggering dilutions to Nannaco’s non-affiliate shareholders. On October 18, 2004, Carreaga diluted the shares at the rate of 1 to 100. Then he diluted the shares again at the rate of 1 to 40 on January 3, 2005. As the S-8 share dumping reached frenzy, Carreaga had to announce a final dilution, this one a massive 1 to 400 split on September 20, 2005 – the date of the final S-8 share registration.
Throughout that entire period Nannaco and Amenni continued to release a series of breathtaking press releases, all while professional stock touts were hyping NANN shares on venues like SiliconInvestor and RagingBull.
Steve Carreaga was a busy man on September 20, 2005. In addition to reverse splitting Nannaco’s shares, and issuing an additional post-split 15,000,000 shares to a number of affiliates and insiders. Those receiving shares included Seattle lawyer David M. Otto, who received 5,000,000 shares of the September 20 issue.
Otto’s services, as described in the September 20, 2005 S-8 registration statement were “legal services.” Indeed, Mr. Otto’s firm, the Otto Law Group was also busy on September 20, 2005: that was the day the Carreaga’s deposition was being taken in a case styled “Haines v. Reality Wireless Networks, Inc.”
From that deposition comes a clear picture of how publicly traded companies that are allowed by the SEC and state regulators to dump hundreds of millions of shares on an unsuspecting public, all while having only a mail drop for an address and no business activity whatever.
Nannaco is not the only public-company associated with Otto, Carreaga and Lochrie.
Reality Wireless Networks, Inc. is a publicly traded company, now known as “Recab International, Inc.” (ticker: RCAB). On September 20, 2005 it was the focus of a quarter-million dollar judgment resulting from a civil suit in Washington state.
Carreaga initially testified that his only employment at the time was as CEO of Reality Wireless Networks, Inc. When pressed further, he told Seattle based attorney Bruce Danielson that he had a small consulting business, CDF Consulting, LLC., that he ran from his home. He concealed, however, the fact that he was also CEO of Nannaco.
Being the CEO of Reality Wireless, according to Carreaga’s deposition, presented its own unique set of challenges. Although he wasn’t completely sure, Carreaga testified in response to the question: “Who is the president,” as follows: “I don’t believe we have a president.” He did know who the Secretary of the company was though: David M. Otto. He also testified that all of the books and records of Nannaco were kept in Mr. Otto’s law offices. While the books and records had a spacious environment, the rest of Reality Wireless was relegated to a mail drop according to Carreaga’s deposition.
Like Nannaco, Reality Wireless had an aggressive press-release program timed to resonate with the S-8 “registration of the month” program. The press releases that had been regaling the public turned out to have been prepared by “Bartholomew Investment Company.” That firm also received large blocks of Nannaco stock, presumably for preparing the Lochrie/Amenni press releases for Carreaga’s signature.
Prior to his involvement with Reality Wireless, Carreaga testified that he was the Executive Director of Firefighter’s National Trust, a supposed “non-profit.” The non-profit’s Secretary was, not surprisingly, David M. Otto. Founded just one month before the 9/11 tragedy, Firefighter’s National Trust had a massive internet presence by the time of the tragedy and raised over $9,000,000 dollars in donations in just nine months. Over five-million dollars was later recorded as “expenses” by Otto and Carreaga for that same period in a report filed with a state agency. The report does not describe in any detail just what those expenses entailed. The trust failed to meet its reporting obligations to a number of states, including Arkansas, and eventually fell off the radar of regulators, never to be heard of again. Its phones, offices and website and assets simply disappeared.
Carreaga testified that he relies heavily on his corporate Secretary. His deposition testimony was that Otto made all of the decisions for Reality Wireless. Carreaga did not know if there was a checking account but said if there was, Otto’s office had the checkbook.
Carreaga’s deposition resulted in his disclosure of a potential merger between Reality Wireless and a company he called Arabian Recab for Trading Co., LLC.
On November 21, 2004, arabnews.com carried a report that an Abdullah Al-Bajadi Al-Shahrani, of Arabian Recab for Trading had signed a deal to “acquire 30 percent of the share capital of Amenni, which is a pharmaceutical and nutraceutical holding company with three subsidiaries. The subsidiaries are Iceni Animal HealthCare, Omni Nutraceuticals and Bionovate R&D, with distribution throughout Europe and the United States.”
Repeated attempts to locate Abdullah Al-Bajadi Al-Shahrani, in Saudi Arabia were fruitless.
Fifty Total S-8 Registrations Yield Hundreds of Millions of Shares . . .
As is the case of Nannaco, Reality Wireless filed 25 SEC Form S-8 registrations between May 20, 2002 and September 1, 2005. The last S-8 registered 112,500,000 shares of common stock. Before that, on July 21, 2005, some 224,000,000 shares were registered. The month prior, 112,500,000 shares were registered. Yet, on June 20, 2006, Reality Wireless, which has changed its name to “Recab International, Inc.,” was reporting to PinkSheets that it had only 996,280 shares issued and outstanding as of May 15, 2006. Nannaco’s most recent “reverse split” was a 500 to 1split.
Recab is now operating out of a mail drop located at 110 Broward Blvd.
Suite 1700, Fort Lauderdale, FL 33301, an “address” that the business owner says is rented to Patrick J. Lochrie.
Lochrie and Carreaga recently announced a “completed merger” with Recab International, Inc., a Nevada corporation, on May 23, 2006. Despite a SEC regulation requiring a report of a material event, Recab never filed any report on form 8-K with the SEC. Neither Reality Wireless nor Recab have ever filed with the SEC to be relieved of the obligation to file periodic reports. Reality Wireless has not filed audited financial information with the SEC for over a year.
What Recab and Lochrie did do, however, is manage to place a link on the PinkSheets.com website to an internet address that purports to be hosting an “audited financial statement” for Recab.
Immediately following the merger announcement, Lochrie launched two rapid-fire press releases. The first claimed that Recab had just won a $20 million dollar contract to install a water line in Saudi Arabia. The next release claimed that Recab would have revenues in excess of $4.7 million dollars in its first quarter. Despite the glowing news and a massive reverse split that briefly spiked the stock at over a dollar a share, Recab has fallen steadily under heavy selling pressure.
AI
