The last SCYA rumor turned out to be partially true except they decided to merge US National Telecom into MEIX instead of SCYA.
I believe part of the accumulation you saw in SCYA recently was because of this board. They knew Mark Gertslen who is listed as officer for SCYA is Brian Goldenbergs partner. As these Goldenberg shells come to life they were hoping trickle down economics would bring spill over buying to SCYA.
Here is my concern with SCYA...at least 8 of these Goldenberg shells appear to be very clean. Brian now has a bunch of shells sitting in the Reverse merger warehouse for sale. Who would choose to merge into SCYA over the other Goldenberg shells with SCYA's past history and baggage. Even if the SEC charges were against the former SCYA officers not the SCYA shell you still need to ask yourself who would pick SCYA over the other cleaner shells? Just my opinion.
SEC Closes Promissory Note Fraud Case
By Matthew Dublin June 18, 2007
A Pennsylvania District Court has entered judgments in the SEC’s case against five men charged with running two separate fraudulent promissory note offerings.
The court ordered Darrell Musick, Richard Wensel, Arthur Carlson, Gary Spirk, and Richard Wallace to pay more than $2.5 million in disgorgement, prejudgment interest, and civil penalties. David Walton Sr., another defendant originally charged in the case, was granted a dismissal due to his failing health.
At the Commission’s request, the Court has also dismissed the case against their companies, Apacor Financial, Continental Capital Group, and Secure Investments, because each entity is now defunct. The case has also been dropped against Security Asset Capital Corporation, a bankruptcy debtor with liabilities that far exceed its assets and is no longer in operation.
From December 1998 through January 2001, the Security Asset offering raised approximately $7 million from hundreds of investors. The company, run by Musick, Wensel, Walton and his late son, Walton Jr., hired defendant Carlson and his company, Continental Capital, to be the exclusive distributor of the promissory notes. Continental Capital, in turn, hired Spirk’s Secure Investments to sell the promissory notes through a network of independent insurance agents in Pennsylvania whom Spirk recruited.
Despite numerous statements to investors that their money would be used for the purchase of consumer debt obligations and other associated expenses, Security Asset spent only $3.2 million of the $5 million it raised to purchase debt portfolios. Security paid Secure Investments, Continental Capital Group, and Wensel sales commissions of $448,460, $57,292, and $42,503, respectively. The remaining $1.25 million was used to pay for, among other things, Walton Jr.’s exclusive beachfront home and car payments, daily upscale dinning enjoyed by Walton Jr. and Musick, and lasik eye surgery for company employees and their spouses. Other expenses included company gas cards, and cosmetic surgery for Walton Jr.’s girlfriend.
On January 23, 2001, the Pennsylvania Securities Commission issued a cease-and-desist order requiring that Security Asset, Carlson and Walton Jr. cease and desist from selling the company’s unregistered promissory notes in the state of Pennsylvania.
The SEC first brought charges against the defendants in February 2004 in order to halt two fraudulent nine-month promissory notes being issued by Security Asset and Apacor Financial. The defendants promised investors a secure investment in the notes, with annual returns of 12% to 14%, but in each case, they ended up losing all or most of their money. In both offerings, they told investors that their money would be used to buy consumer debt portfolios and to pay costs of associated with those notes.
The defendants stated that the notes were secure, no-risk investments, guaranteed by the issuer. In reality, each issuer was in dire financial straits, and the investments entailed significant risk. And instead of using investor funds for the purchase of the notes, investor money went to pay sales commissions, company officers’ salaries and personal expenses. In addition, the offerings had no registration statements, nor were the offerings exempt from registration. As a result, the SEC charged Wensel, Carlson, and Spirk were charged with acting as unregistered broker-dealers.
The SEC ordered Musick to pay disgorgement of $100,026, prejudgment interest of $47,387, and a civil penalty of $110,000. It ordered Carlson to pay disgorgement of $124,169, prejudgment interest of $58,824, and a civil penalty of $120,000. Wensel was ordered to pay disgorgement of $130,642, prejudgment interest of $61,891, and a civil penalty of $110,000. Carlson was ordered to pay disgorgement of $124,169, prejudgment interest of $58,824, and a civil penalty of $120,000. Spirk was ordered to pay disgorgement of $1,104,016, prejudgment interest of $523,020, and a civil penalty of $120,000.
In 1996, Wensel was a defendant in another action by the Commission for a pump-and-dump scheme. He consented to an injunction enjoining him from further securities violations.
No monetary relief was order against Wallace in light of the fact that is he is currently serving a three-year prison sentence at the Federal Correctional Institute in Elkton, Ohio, in addition to other sanctions and restitution orders totaling $2,117,496, stemming from his guilty plea in December 2002 to charges of mail fraud and bank fraud relating to the sale of Apacor's promissory notes.
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