Good Ol Stockpicks

[Entangled Proton]

Shutdown of Carrillo Huettel, LLP and Disappearanceof Luis Carrillo Explained by SEC Charges

March 16, 2013: Luis Carrillo and Wade Huettel, partners in San Diego law firm and Pump & Dump incubator, Carrillo Huettel, were among several charged by the SEC on Friday, for their part in the international Pump & Dump of Pacific Blue Energy Corporation (PBEC) and Tradeshow Marketing Company Ltd (TSHO).

Others charged in the scheme include the actual law firm itself, Carrillo Huettel, LLP; Canadian stock promoters John Kirk, Benjamin Kirk, Dylan Boyle and James Hinton; Gibraltar Global Securities and its President Warren Davis; Carrillo’s father, Dr. Luis Carrillo; and, the PBEC and TSHO entities, as well as their respective Presidents, Joel Franklin and Luniel de Beer. de Beer also served as the Chairman of PBEC.

According to the SEC’s complaint, the Kirks along with Boyle and Hinton, used misleading promotions to rev up interest in PBEC and TSHO as they dumped their own shares. As with most Pump & Dump schemes, the promoters produced phony hype through the dissemination of false and misleading emails masked as two newsletters, Skymark Research and Emerging Stock Report. The crooks also used “boiler room” sales calls to tout the stocks, falsely claiming that the recommendations were based on independent research by Skymark and Emerging Stock Report.

Carrillo Huettel LLP, Carrillo, Huettel, Gibraltar Global Securities, John Kirk, Benjamin Kirk, Boyle, Hinton, de Beer, Franklin, PBEC and TSHO were all charged for violations of U.S. anti-fraud laws and rules. Those defendants, along with Warren Davis and Carrillo’s father, Dr. Luis Carrillo, were also charged for distributing unregistered shares, in violation of U.S. securities laws.

Within the complaint, the SEC alleges that Carrillo and Huettel were key components of the scheme as they helped the promoters conceal their ownership interests in the companies, drafted misleading public filings, and provided misleading legal opinions. As part of the scheme, the law firm received proceeds of stock sales in the form of phony loans. Franklin and de Beer are accused of being complicit in the scheme by making phony statements about their companies, for which they received secret kickbacks totalling hundreds of thousands of dollars.

We were the first to suggest that the heat was coming down on Carrillo and Huettel as we were the only ones to break the news of the shutdown of the law firm and the disappearance of Luis Carrillo, who is now officially a fugitive. It seems likely (maybe obvious) that these charges are only the first in a series of allegations to be levied upon the law firm and its partners for the many frauds perpetrated against the public and which they had a hand in, including those involving close partner-in-crime, Awesome Penny Stocks. In our opinion, market makers, Wilson Davis & Co., need to start looking over their shoulders as well.

SRGE: The Mystery of Fugitive Luis Carrillo &The Shutdown of Carrillo Huettel Continues

February 23, 2013: On November 29, 2012, we broke the news that Pumping & Dumping Law Firm, Carrillo Huettel, LLP had abruptly shut its doors, and that Managing Partner, Luis Carrillo was in hiding.

Today we bring to your attention an ABC News item from reporter, Susanna Kim, regarding the disappearance of executives of Southridge Enterprises (SRGE), an Carrillo Huettel incubated scam. Probably not so coincidentally, these executives disappeared in Luis Carrillo's ancestral home of Mexico, where he was also reported to be heading.






By SUSANNA KIM (@skimm)
Feb. 19, 2013
The reporter in Mexico who described the purported death of two American executives with a crumbling business said they were likely not killed and he may have been "fed" the story.
Antonio Neri Johnston, a reporter for El Occidental newspaper in Guadalajara, Mexico, wrote a story on Feb. 11, describing that the bodies of Americans Michael Davies and Derald Johnston, identified as the CEO and CFO, respectively, of Southridge Enterprises in Dallas, had been discovered.
Johnston said a man who claimed to be a police officer in a remote village said two bodies were found in a river with documents showing their identities.
"The strange thing is, they called me, but also other colleagues," Johnston, who could not be reached for comment today, told Dallas ABC affiliate WFAA.
But Johnston said neither local police nor American authorities have evidence of a crime where the bodies were found, nor that the men have been reported missing or even that they existed in the first place.
"We were fed a story, and many of us ran with it," Johnston told The Dallas Morning News.
The Securities and Exchange Commission terminated the registration of Southridge Enterprises Inc. in 2011, noting that there were approximately 134 stock "holders of record." ABC News was not successful in attempts to contact an attorney and law firm once associated with the company, Carrillo Huettel LLP, in San Diego, Calif.
According to one of its press releases on its website, Southridge Minerals announced in November 2012 that it "hired new legal representation" but did not specify which law firm.
Southridge Mineral states that it was in the "development and acquisition of gold and silver mines in Mexico," but Bandera Gold, a competing company, said Southridge claimed to have business in places in Mexico where none existed.
Starting in early 2012, Southridge began issuing press releases indicating that it had surface rights to Cinco Minas in Jalisco, Mexico, something that caught the attention of Bandera Gold, a gold exploration company in Alberta, Canada, that said it has ownership of the land.
Bandera Gold has been in a legal dispute with its former joint venture partner since 2008 over a $5.6 million agreement to invest in Cinco Minas.
"[Southridge] was claiming a comprehensive drill program and they were intercepting bonanza grades -- all of which when we were acutely aware the site was dormant. It has not had activity since late 2007," said Stephen Roehrig, Bandera's CEO.
Concerned that Bandera Gold's shareholders might be confused by the conflicting information, Roehrig said he hired an independent security team to monitor the site and found no evidence of mining activity.
Roehrig told ABC News Bandera sent "cease and desist" letters to the address Southridge registered with the SEC. Those letters returned "undeliverable."
Linda Coker, the tenant relations manager at the Dallas office building of Southridge and Southridge Minerals, told the Dallas Morning News that Southridge does not lease space in the building, though she said the company may have had a temporary or virtual office operation there.
"We made efforts to try and communicate with them," Roehrig told ABC News. "There's never been evidence that he at all exists. All attempts to communicate with him ended up as a dead end."
The SEC suspended trading in Southridge stock after the company issued a statement claiming that it had a joint partnership in Mexico with Kinross Gold Corp. of Canada. Kinross told the SEC there was no such deal.