Hop-On Inc (HPNN)

[PRmaniac]

Excerpt from felony indictment article
(bold emphasis are mine)

Hop-On CEO indicted

April 18, 2003|By Todd Wallack, Chronicle Staff Writer

.....Michaels and another executive also promised to forgo a salary until the firm generated enough cash to pay them, but instead paid themselves with investors' money, according to the charges.

In addition, Michaels used $17,000 of shareholder funds to pay his credit card bills and spent an additional $131,000 on a yacht, the indictment contends. WWWC also signed a $500,000 contract with another firm, Binky Roo Software, which was secretly controlled by Michaels, according to the documents.

The indictment names Michaels and four other men (Greg Boretz, Robert Rey, James Beck and Charles Woods) connected with WWWC and a related firm that raised money for WWWC, Tri Star Wireless Communications, for conspiring to commit securities and mail fraud. The California Department of Corporations and the U.S. attorney for the Southern District of California handled the case.

WWWC shut down about three years ago after it was raided by state investigators, and WWWC shares were converted into stock in Hop-On, Michaels' latest venture.

Hop-On then gained widespread attention after issuing press releases touting a disposable cell phone for between $30 and $40.

Time magazine dubbed the phone one of the best inventions of 2001. And Michaels promoted the device everywhere, including cable channels such CNBC and BusinessWeek magazine. Its stock rose above $1.50 per share in over-the- counter trading.

But The Chronicle found that two sample Hop-On phones sent to the paper were actually modified Nokias in a new plastic casing. Michaels later explained those were prototypes.
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