eMax Holdings, Inc. (fka EMXC)

[David i INVEST]

Jamie Piromalli's track record

Why are Roxanna Weber and Denny Diante still involved with this guy ?

"WORLD VISION ENTERTAINMENT" Ponzi scheme

"Between June 1996 and September 1999, the debtor sold nine-month notes totaling approximately $62 million in 33 states to approximately 1,200 investors. The investors typically were elderly people living on a fixed income. They lacked financial sophistication and often invested their retirement savings into the note program relying on the advice of their broker." (page 3. Note: the brokers were recruited by Piromalli and this document details their indictment)

"Between 1994 and 1999, the debtor (Piromalli) invested over $17 million in approximately 36 different ventures. Some investments were merely loans. On other investments, the debtor received small amounts of property or stock in exchange for its funds. Four of the debtor’s investments exceeded one million dollars. The debtor’s single largest investment, the purchase of music and video recordings, spanned a fouryear time period and totaled $7,171,520. The debtor never earned any return on these purchases.

The next largest investment, called Galleon, graphically illustrates the debtor’s insiders pilfering investor funds. The Galleon project involved the purchase of the rights to 25 hours of Russian classical music. The debtor’s founder, Piromalli, originally purchased the rights using a separate offshore corporation he owned. He paid only $25,000. Piromalli then turned around and sold the same music to the debtor for $4 million. Of the total sales price, Piromalli actually collected $800,000.

The debtor’s third largest investment was in a corporation called International Digital Manufacturing, Inc. (“IDIG”), a holding company for subsidiary companies that produced innovative technology products, such as accessories for Palm Pilots. IDIG [which Piromalli owned http://ccfcorp.dos.state.fl.us/pdf/CH002307.pdf] was a new technology company that required large cash infusions to develop and to market products. Between 1997 and 1999, the debtor invested a total of $3,929,870 in IDIG. The trustee characterized this investment, which appears quite legitimate in many respects, as a part of the “sizzle” that made the debtor’s note program appealing to investors.

The debtor’s final investment exceeding one million dollars was in a company located in Mexico called MAHZ. Another example of insider transfers, MAHZ was run by the father of one of Piromalli’s employees and may or may not have had a legitimate business purpose. The debtor transferred $1.6 million to MAHZ. Piromalli then arranged to retransfer the $1.6 million into his personal bank account in the Isle of Mann.

Many of the debtor’s other investments look similarly suspicious. By and large, the debtor’s business ventures were shams, vehicles for insider transfers, or woefully undercapitalized start up companies. Given time, luck, and additional capital, IDIG and perhaps some of the other smaller investments could have generated a profit in the future. However, by 1999, not a single one of the debtor’s 36 supposedly legitimate ventures resulted in the payment of even one-dollar in profit, dividends, or income to the debtor.

Based on this analysis, the Court accepts the trustee’s conclusion that the debtor was insolvent as early as 1996 [Note: This is the same year Diante claims he co-founded Pipeline Music]. Each successive promissory note sold acted to increase the debtor’s insolvency. The debtor could not have harbored any real hope that its investments would generate the significant yield needed to maintain the note program and to pay investors their interest and
principal in a nine-month period of time.

The conclusion that the debtor operated as a Ponzi scheme further is confirmed when one considers the high rate of return needed simply to pay the costs associated directly with the promissory notes. (pages 6-7)
http://pacer.flmb.uscourts.gov/pdf-new/48945391.pdf