Penny Stock Fraud Info
Sunday, March 25, 2007
SEC investigates lawyers, accountants, brokers and consultants orchestrating pump and dumps
I’ve gotten those faxes and I sure hope they get those crooks, think I named Artec in my 2005 junk fax suit.
Exclusive: SEC investigating possible ‘pump-and-dump’ scam
Inquiry looks into whether network victimized stock buyers
03:16 AM CDT on Sunday, March 25, 2007
By BRENDAN M. CASE and MICHAEL GRABELL / The Dallas Morning News
;The stock tips hit millions of fax machines and e-mail accounts.
“Get filthy rich as the recovery begins,” said one message after Hurricane Katrina. “Double profit opportunities from America’s energy crisis,” said another.
At first, the shares soared on the penny stock market, a loosely regulated bazaar of small-time companies where some investors seek to buy a piece of the next big thing.
Then, after sell-offs by some lucky or well-informed investors, the stocks plunged, taking millions from the pockets of recent buyers.
The losers in such cases often blame bad fortune. But the U.S. Securities and Exchange Commission is investigating whether they were victims of fax and e-mail stock scams orchestrated by a group of lawyers, accountants, brokers and consultants – many in the Dallas area.
The group “may have manipulated or attempted to manipulate the share price of certain companies by making false or misleading statements to the public,” said SEC enforcement lawyer Kevin Muhlendorf, in an affidavit filed in federal court in Washington, D.C.
The SEC won’t discuss particulars of its investigation, but such classic “pump-and-dump” scams are a high priority for the agency because e-mail spam and instant online stock trading make small investors more vulnerable than ever.
“With the Internet technology, there is so much more ability to get to the retail investors through their computers,” said Kit Addleman, associate director of enforcement for the SEC’s regional office in Fort Worth.
SEC inquiry
The two-year investigation into what officials call the “shell creation group” is being handled from SEC headquarters in Washington, D.C.
SEC subpoenas, obtained by The Dallas Morning News, list more than 100 people and companies, and corporate records show that many of those companies tie back to a common group of Dallas-area business people. One person who comes up again and again is a former SEC attorney who used to enforce the nation’s securities laws.
SEC officials cautioned that inquiries don’t always lead to legal proceedings and that subpoenas don’t mean that the people named in them have broken the law. The SEC hasn’t publicly said which individuals may be under scrutiny, or identified everyone who profited from the stock trades.
But two civil lawsuits filed in Dallas allege that specific people profited from manipulating stock in companies that are part of the SEC investigation.
National Storm Management Inc., the roofing firm whose stock soared and plunged after Katrina, makes such allegations against David Gordon, a Tulsa, Okla., securities lawyer. He was once sued unsuccessfully by his brother, accused of orchestrating a stock fraud on the family jewelry business in Conroe, Texas.
The company with the racetrack video, Consolidated Sports Media Group Inc., sued Dallas lawyer Phillip Offill. He spent 15 years in the SEC’s Fort Worth office and until recently was a partner in the law firm Godwin Pappas Langley Ronquillo LLP.
Mr. Gordon and Mr. Offill deny any wrongdoing. They say they are the victims of the companies’ own mismanagement and misdeeds. And the business people accused of stock manipulation in the civil lawsuits contend that they lost money as company managers profited.
“This is a big, huge investigation the SEC is doing that involves well over 100 companies,” said Jules Slim, an Irving lawyer representing people accused of stock fraud in both lawsuits. “We’re not really sure who they’re going after. The plaintiffs are simply capitalizing on the fact that those people have been subpoenaed.”
So far, the SEC investigation has resulted in only one penalty.
On Jan. 17, the SEC announced an agreement with John Shrewder, an Oklahoma stock promoter accused of sending out 87 million faxes in 2004 and 2005 to manipulate the stock price of Artec Inc., the business with the anti-cancer drug, and other companies.
Mr. Shrewder did not admit or deny wrongdoing, but he acknowledged liability for $1,031,000 in improper trading profits and interest. But he will have to pay back only $150,000 to the U.S. government under a settlement with the SEC that considered his financial condition.
And this month, as part of a crackdown on e-mail stock fraud called Operation Spamalot, the SEC suspended trading in four companies that listed Mr. Offill as corporate counsel in disclosure reports. He also had ties to four others, including one that listed a company he controlled, Supreme City Holdings, as a major shareholder.
Mr. Offill denied ownership interest in the Spamalot companies and said he formed Supreme City Holdings on behalf of a client, whom he wouldn’t identify. When asked about another company in which a firm he controlled owned stock, Mr. Offill said he couldn’t discuss client matters.
Two of the Spamalot companies also showed up on SEC subpoenas related to the investigation into the shell creation group.
Taking a risk
Why would anyone send out 87 million faxes, or tens of millions of e-mails?
Because, experts say, in some cases, they’re a good way to separate investors from their money.
Researchers at Purdue University and Oxford University recently found that electronically pumped stocks show “a significantly positive return” at first and then tend to collapse, leaving unsuspecting investors with big losses that they often attribute to the gamble of the stock market.
“What are you going to do? It was a risk and I took it,” said Jon Browar, a Consolidated Sports shareholder who owns a screen-printing business outside Kansas City. “My kids aren’t going to go without because of this, but in the same respect, there’s a lot more I can do with $3,000.”
Federal and state laws prohibit the distribution of unsolicited faxes to hype a stock. Both junk faxes and spam e-mails may violate securities laws if they contain falsehoods about a company or if promoters don’t disclose that they have been paid to tout a stock.
For example, the SEC alleged that the Artec faxes understated Artec’s debt and the number of shares available to make each share appear more valuable.
Moreover, while Mr. Shrewder’s faxes urged other investors to buy shares, he was selling them.
“Shrewder was actively selling Artec shares for less than $.50 while he was recommending that others buy them until the price reaches between $2 and $4,” the SEC said in its complaint.
Mr. Shrewder said in a court filing that he was unaware of any misrepresentations in the faxes. He also said he had disclosed in the faxes that he might trade in the shares. In an interview, he said his faxes only went to people who asked to receive them.
Expanded inquiry
The SEC opened its Artec investigation in December 2004 after officials noticed suspicious trading and price movements. By June 2005, the investigation had expanded to reflect interest in the larger circle of people who appeared to be involved in what the SEC came to call the “shell creation group.”
After Katrina, e-mails and faxes enticed investors to buy shares in National Storm and in Deep Rock Oil & Gas Inc., an Oklahoma energy company. National Storm’s stock price rose from 51 cents to $2.41. Deep Rock’s price increased tenfold, to $1.11. Within months, both fell to less than a quarter a share.
Phone records of a Florida investor – who the SEC alleges played a role in producing and disseminating the faxes – showed several calls to numbers associated with the Dallas-based shell group, the SEC said.
Some of those phone calls, listed in SEC court documents, trace back to Mr. Gordon, the Tulsa lawyer for Deep Rock who also helped take National Storm public.
National Storm has sued Mr. Gordon, accusing him of masterminding stock manipulation schemes.
“The Shell Creation Group’s activities frequently prove ruinous to the legitimate private companies they deceive,” National Storm said in court documents.
Mr. Slim, who is representing Mr. Gordon and others in the lawsuit, said the company’s counterclaim is a distraction from the original complaint. The lawsuit was filed against National Storm by Trucolor Inc., which is partly owned by Mr. Gordon.
Trucolor alleged in the lawsuit that National Storm cheated it by breaching a loan that had been induced through fraud.
In an interview, Mr. Gordon said that he had followed all securities laws and that he believed the information released by Deep Rock and National Storm was accurate. He said he didn’t know who distributed the blast faxes.
“Believe me, I do not do pump-and-dumps,” he said.
Consolidated Sports
The Consolidated Sports lawsuit alleges Mr. Offill and others made millions of dollars by perpetrating a pump-and-dump scam on the company’s stock.
The company says Mr. Offill arranged for a merger with an inactive corporation to use a legal loophole that gave investors millions of freely tradable shares that didn’t have to be registered with the SEC. Mr. Offill brought investors into Consolidated Sports, including companies that he controlled, the lawsuit says.
In November 2004, a junk fax went out touting the stock. Consolidated Sports lawyers say the fax was approved by Mr. Offill and drafted by one of his associates.
“The specific intent behind the blast fax was to cause the price of the stock in CSMG to spike upward, after which Offill’s friends, clients and business associates, and entities controlled by Offill, would sell their stock, leaving the other shareholders and the innocent purchasers to bear the losses,” Consolidated Sports’ lawsuit says.
Mr. Offill, who has also been a lawyer for Artec, declined to be interviewed, referring questions to his lawyer, Richard Sayles. In January, Mr. Offill left Godwin Pappas to pursue his own practice, Mr. Sayles said. Mr. Offill said in a deposition that he didn’t know about the blast fax until after it was sent.
“A fax of this nature – that appears oriented towards providing investor awareness on a public basis – is something that an issuer should never send,” he said.
A trial in the Consolidated Sports lawsuit is expected this year.
A WEB OF LAWSUITS AND SUBPOENAS
Corporate records and lawsuits indicate the following people have ties to the Securities and Exchange Commission’s investigation of the “shell creation group.” SEC inquiries do not necessarily lead to legal proceedings or indicate that people named in subpoenas have broken any law.DAVID GORDON
A Tulsa, Okla., securities lawyer, Mr. Gordon, 45, has been accused of stock fraud in several lawsuits, including one from Consolidated Sports Media Group Inc. and another brought unsuccessfully by his brother. He was the lawyer for Deep Rock Oil & Gas Inc. and helped take National Storm Management Inc. public. In a lawsuit, National Storm called him a mastermind of pump-and-dump schemes. More than a half-dozen companies on a subpoena issued to a Dallas brokerage have ties to him. He and his associates have denied wrongdoing.PHILLIP OFFILL
A former SEC enforcement attorney in Fort Worth, Mr. Offill, 48, was a partner until recently at Godwin Pappas Langley Ronquillo LLP in Dallas. He was a corporate lawyer for Artec and Consolidated Sports. Consolidated Sports says that he helped orchestrate a pump-and-dump scheme on its stock using a junk fax and that two companies he controlled profited. He says he never saw the blast fax before it went out. Some three dozen companies mentioned in the SEC subpoenas list him as an officer, corporate counsel, or in some other capacity. In other cases, one of his companies is listed as a major shareholder. He denies any wrongdoing.MARK LINDBERG
An amateur golfer, Mr. Lindberg, 39, of Coppell, helped take Consolidated Sports and National Storm public, according to Consolidated Sports court documents and National Storm annual reports. Consolidated Sports said in its lawsuit that Mr. Lindberg paid investor Doyle Mark White for arranging a junk fax touting its stock. Nearly 20 companies on the SEC subpoenas list Mr. Lindberg as an officer or consultant, or one of his companies as a major shareholder. And he received several calls from a Florida investor the SEC says played a role in the junk faxes after Hurricane Katrina. Mr. Lindberg declined an interview but denied the allegations in court documents. In a deposition, he said that he’s never been involved in a pump-and-dump scheme and that he transferred the money to Mr. White’s firm on behalf of another company.DOYLE MARK WHITE
Consolidated Sports said in its lawsuit that Mr. White, 49, of Colleyville, sent a junk fax touting its stock behind the company’s back. Mr. White, a former Irving stockbroker, was barred from the U.S. securities industry last year, accused of manipulating a separate penny stock. In the settlement, he did not admit or deny wrongdoing. Mr. White did not respond to requests for an interview. In a deposition, he said he sent the fax to a distribution service after Consolidated Sports approved it. The company denies that.GARY ZINN
Described as an international businessman with ties to Bulgaria, Mr. Zinn, of Rancho Cucamonga, Calif., was sued by the SEC for not answering a subpoena related to the stocks of National Storm and Deep Rock, which were allegedly manipulated after Katrina. A judge ordered him to comply, and the case was dismissed. The SEC said in court documents that Mr. Zinn has ties to two companies managed in London, High Charm Ltd. and Putnam International Consulting, which each made more than $50,000 trading in the stocks. Putnam had paid a marketing company to distribute the junk faxes, according to a disclaimer on the faxes. High Charm and Putnam were also top shareholders in Consolidated Sports. Mr. Zinn and his lawyer did not return phone calls seeking comment.JOSHUA LANKFORD
An entrepreneur who once sold neckties in downtown skyscrapers, Mr. Lankford, 33, became one of the most successful stockbrokers at Dallas brokerage Barron Moore Inc., even becoming part owner before leaving. In its lawsuit, Consolidated Sports says he participated in a pump-and-dump on its stock. He denied the allegations in a deposition, saying he warned company executives that he couldn’t raise money for them until they had revenue.CHASITY THOMPSON AND JASON FREEMAN
As a business consultant, Ms. Thompson, 28, helped incorporate Artec, Consolidated Sports and National Storm. Plano-based Routh Stock Transfer Inc., which she ran with Mr. Freeman, 31, served as a transfer agent for National Storm, Deep Rock and about 10 other companies listed on SEC subpoenas. Ms. Thompson and Mr. Freeman were consultants for several other companies on the subpoenas. Consolidated Sports alleges that Ms. Thompson falsified corporate records to help commit fraud on its stock. Her attorney said she has done nothing wrong. Earlier this month, Mr. Freeman filed a shareholder lawsuit against Consolidated Sports, saying the company fraudulently funneled money to a consultant who used it to repay investors in past failed ventures. Consolidated Sports lawyers said that hundreds of hours of video footage show the money was spent legitimately.
I still have my faxes from 2004 and 2005, too bad I’m so busy. And it’s probably a good idea to wait to see whether they’ll file for bankruptcy.
Monday, February 05, 2007
Court order - claim info: Bio-Heal Laboratories BHLL.PK, Bela Enterprises and Gibson Island
UNITED STATES DISTRICT COURT SOUTHEN DISTRICT OF FLORIDA Case No. 05-21116-Civ-Seitz
COURT-ORDERED LEGAL NOTICE
IF YOU BOUGHT BIO-HEAL LABORATORIES, INC. SECURITIES (BHLL.PK) BETWEEN FEBRUARY 15, 2005 AND APRIL 7, 2005 YOU MAY BE ENTITLED TO RECEIVE A PAYMENT FROM FUNDS RECOVERED
On December 11, 2006, the Court approved a Distribution Plan to distribute disgorgement amounts received from Bio-Heal Laboratories, Inc. ("Bio-Heal"), Bela Enterprises, LLC ("Bela"), and Gibson Island Enterprises, LLC ("Gibson") to proper claimants. If you bought Bio- Heal securities between February 15, 2005 and April 7, 2005, you may be eligible to receive benefits from the Bio-Heal Fund. If you qualify, you may send in a Proof of Claim Form to obtain benefits. HOW WAS THE BIO-HEAL FUND CREATED? The Bio-Heal Fund was created as a result of the Securities and Exchange Commission’s successful enforcement action against Bio-Heal, and certain relief defendants including Bela and Gibson. The Commission’s action asserted that Bio-Heal improperly issued 12 million shares of its stock to relief defendants. The Complaint further alleged that relief defendants Bela and Gibson generated ill gotten gains by dumping Bio-Heal shares while the stock was being touted to investors over the internet. The Commission sought to and did recover proceeds of the illegally issued shares. The amounts recovered including interest have been deposited into the Bio-Heal Fund and the Fund proceeds will be distributed to Eligible Claimants pursuant to the Distribution Plan.
WHO IS ELIGIBLE FOR A RECOVERY FROM THE BIO-HEAL FUND?
The Potentially Eligible Claimants include all persons or entities that purchased shares of Bio-Heal (BHLL.PK) during the period from February 15, 2005 through April 7, 2005 (inclusive) and held the shares after the close of business April 7, 2005. You are not entitled to a recovery from the Fund with respect to any Bio-Heal shares that you acquired prior to February 15, 2005. In addition, to be eligible, you must have incurred an aggregate net loss from your combined purchases or sales of all Bio-Heal shares purchased from February 15, 2005 through April 7, 2005.
HOW DO YOU SUBMIT A CLAIM?
The Proof of Claim form package contains all of the information you need. You will find copies of the Proof of Claim form package and additional information about the Bio-Heal Fund on the website http://www.BioHealFund.com. You may also obtain information regarding the claim process from the Bio-Heal Fund’s hotline at 800-648-0755 or you may submit questions by mail to Bio-Heal Fund c/o Global Risk Solutions, Inc. P.O. Box 310130 Miami, FL 33231-0130 or to the Distribution Agent, Melanie Damian, Damian & Valori LLP, 1000 Brickell Avenue, Suite 1020, Miami, FL 33131.
Sunday, January 21, 2007
Scientific paper on stock tout spam, subsequent investor losses and spammer profits
From Spam Works: Evidence from Stock Touts and Corresponding Market Activity
Abstract:
We assess the impact of spam that touts stocks upon the trading activity of those stocks and sketch how profitable such spamming might be for spammers and how harmful it is to those who heed advice in stock-touting e-mails. We suggest that the effectiveness of spammed stock touting calls into question prevailing models of securities regulation that rely principally on the proper labeling of information and disclosure of conflicts of interest to protect consumers, and we propose several regulatory and industry interventions.Based on a large sample of touted stocks listed on the Pink Sheets quotation system, we find that stocks experience a significantly positive return on days prior to heavy touting via spam. Volume of trading responds positively and significantly to heavy touting. For a stock that is touted at some point during our sample period, the probability of it being the most actively traded stock in our sample jumps from 4% on a day when there is no touting activity to 70% on a day when there is touting activity. Returns in the days following touting are significantly negative.
The evidence accords with a hypothesis that spammers “buy low and spam high,” purchasing penny stocks with comparatively low liquidity, then touting them - perhaps immediately after an independently occurring upward tick in price, or after having caused the uptick themselves by engaging in preparatory purchasing - in order to increase or maintain trading activity and price enough to unload their positions at a profit. Selling by the spammer then results in negative returns following touting. Before brokerage fees, the average investor who buys a stock on the day it is most heavily touted and sells it 2 days after the touting ends will lose approximately 5.5%. For the top half of most thoroughly touted stocks, a spammer who buys at the ask price on the day before unleashing touts and sells at the bid price on the day his or her touting is the heaviest will, on average, earn 5.79%.
It’s pretty simple, buy BEFORE the stocks are touted.
Thursday, March 16, 2006
FBI investigates CNDD, AHFI, TWTN, BDYS, SGNJ, BHLL fraud
If you lost money on CNDD, AHFI, TWTN, BDYS, SGNJ or BHLL, please respond to Steve Kirsch’s latest announcement:
please fill out the survey on this page:
http://www.junkfax.org/fax/profiles/wsp/bushross/LossSurvey2.htmThe FBI is investigating this case and it is highly likely that
criminal charges will be brought, but they need your help.This information will only be used by the FBI. If you are skeptical,
email me and I’ll give you the FBI office that is investigating this
crime.
More info is posted at Is Bush Ross co-founder Jere Ross (aka Jeremy Ross) a crook?
Posted by Christine on 03/16 at 01:45 AM in SELL - scammers and spammers, AHFI, CNDD, RYNL fka TWTN
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Saturday, February 11, 2006
SEC sues ArTec, Inc.—ATKJ and Sequoia Interest Corporation—SQNC illegal promotions
I think ArTec is named in my complaint, but I never served them.
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U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19555 / February 6, 2006
Securities and Exchange Commission v. John R. Shrewder, The Franklin Group, Inc., Ashley Miron Leshem, and Ananda Capital Partners, Inc., Civil Action No. 06-80126 (S.D. Fla. February 6, 2006)
SEC Names Tulsa Man in Fax Blasting Securities Fraud Case
SEC Charges that Boca Raton Consultant Violated his SEC Penny Stock Bar
The Commission filed an action today in United States District Court against John R. “Jay” Shrewder, 46, and The Franklin Group, Inc., a company that Shrewder founded, alleging securities fraud and illegal touting, and also against Ashley Miron Leshem, 39, of Boca Raton, Florida, alleging violations of an SEC penny stock bar. The complaint alleges that Shrewder and The Franklin Group improperly manipulated the market for at least two securities and inundated the public with millions of faxes that contained materially false information. The two securities are ArTec, Inc. and Sequoia Interest Corporation (whose securities trade on the over-the-counter market under the symbols ATKJ and SQNC). According to the complaint, these activities resulted in several hundred thousand dollars in unlawful profits by Shrewder.
The Commission’s complaint alleges that after defendant Leshem hired them on behalf of ArTec in the fall of 2004, defendants Shrewder and The Franklin Group sent out “fax blasts” that contained false and misleading statements regarding: the volume of ArTec’s public float; the amount and type of Shrewder’s compensation; the origin of the information and analysis in the faxes; the amount of research Shrewder did about the company; and the claim that Shrewder’s analysis of the stock was independent. The SEC also alleges that Shrewder claimed in the faxes that a “third party” had retained him when, in fact, Leshem (an ArTec consultant) informed him that ArTec’s management was setting his compensation. According to the complaint, Shrewder illegally profited by selling or “scalping” ArTec stock, which he had received as compensation for his promotional activities, into the rising market generated in whole or in part by his own faxes. Finally, the SEC alleges that by acting as a consultant to ArTec and by, among other things, hiring Shrewder on behalf of ArTec, Leshem violated a 1999 SEC penny stock bar.
The Commission charges that Shrewder and The Franklin Group violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder and Sections 17(a) and 17(b) of the Securities Act of 1933 and seeks a permanent injunction, disgorgement, prejudgment interest and civil penalties against Shrewder and TFG, as well as a penny stock bar against Shrewder.
The Commission charges that Leshem violated Section 15(b)(6)(B)(i) of the Exchange Act by violating a 1999 SEC penny stock bar and seeks a judicially imposed penny stock bar, a permanent injunction, disgorgement, prejudgment interest and civil penalties. A company affiliated with Leshem, Ananda Capital Partners, Inc. is named as a relief defendant.
On April 8, 2005, the Commission filed a subpoena enforcement proceeding against Shrewder. See Litigation Release No. 19180 (April 12, 2005). On December 23, 2004, the Commission suspended trading in ArTec, Inc. securities. See Exchange Act Release No. 34-50923 (December 23, 2004).
The Commission has issued an Investor Alert concerning investment related faxes. This alert is available on the Commission’s website at the following location: http://www.sec.gov/investor/pubs/junkfax.htm.
The Commission’s investigation concerning ArTec, Inc. and other entities organized by a shell-creation group is continuing. The staff wishes to thank the NASD for its assistance in this investigation.
Wednesday, November 23, 2005
Hope for CNDD, AHFI, TWTN, BDYS, SGNJ, BHLL fraud victims
Steve Kirsch announced at the Yahoo group CNDD stock fraud:
Great news. I obtained some key evidence in the mail today that I believe proves beyond any reasonable doubt that Bush Ross is liable for your loss. I believe this evidence is strong enough to take to any attorney to pursue our case against them.
If you would like to recover the money you lost on the stocks promoted by these guys (Kos, Jaynes, Ross, etc.) on the stock fraud page on
junkfax.org, then please fill out this form asap:Thanks.
I generally do NOT recommend that you sign up at websites after you lost money because you’re likely to get on a new SUCKER list. However, you don’t have to worry about that with Steve Kirsch - go ahead, sign up, hope for the best.
I previously posted: Is Bush Ross co-founder Jere Ross (aka Jeremy Ross) a crook?
It sure looks to me like he’s a crook.
Posted by Christine on 11/23 at 08:39 PM in SELL - scammers and spammers, AHFI, CNDD
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Thursday, August 04, 2005
MortgageXpress—MXPR - too late to sell? They are junk faxing and promoting
Looking at the PK charts—apparently you missed your chance to get out of MortgageXpress MXPR. But then again, maybe .06 is better than .006.
At Fight Back!!! are the junk fax and my correspondence with MortgageXpress.
They’re trying to pump with press releases too, but as the charts show, only the junk faxes were successful in getting at least a bit of volume.
I’m glad I don’t own their shares.
Tuesday, July 19, 2005
The SEC only sues promoters Yafa and Pickens - the companies are not liable
The 7/19/05 Wall Street Journal article
Stock-Scam Case: a Pickens, a Fax, Bad Luck
The 7/18/05 SEC litigation release: SEC CHARGES STOCK PROMOTERS IN PHONY FAX SCAM
I’ve read through the SEC complaint and the companies who ORDERED the promotions walk away with their own profits—even though they received complaints about the spam and faxes.
So, what does this mean for investors?
1) They won’t get reimbursed for their losses as its unlikely that any attorney will sue since the promoters are expected to be broke.
2) You can expect lots more scams and illegal promotion.
Obviously, there will always be promoters and quite frankly, why shouldn’t I get into this very lucrative business once I left country?
I’ll hire some people in to set up accounts with the fax and spam broadcasters, the payments are wired from “dummy” accounts to be closed after the promotion and obviously NOT in my name. The shares I get as payment for the promotions go into dummy corporations, to be dissolved once I sold or maybe to sit there for the next scam.
I’m sure I’ll get a LOT of penny stock promotion business, especially once I can provide some charts to prove how effective my promotions are. I can buy 10 million fax numbers and many more e-mail addresses for just a few thousand.
Most important, the people HIRING me for the promotions have no liability whatsoever.
Of course I won’t be telling them how exactly I promote, I’ll mention web sites, Google ads, etc. If they have any concerns at all, I’ll just point at this SEC suit, showing that no matter what I’ll do, they have nothing to worry about.
THANK YOU, SEC!!!!
--------------------------------
c: e-mailed for comments to
“If there IS a reason for me and thousands of others not to engage in fraudulent promotions, please advise.”
Monday, July 18, 2005
SEC sues Joshua Yafa and Michael O’Brien Pickens for AVLL, DTEV, IFLB and SFLM scams
Securities + Exchange Commission
Washington, D.C., July 18, 2005 - LAWFUEL - The Law News Network - The Securities and Exchange Commission today filed charges in a scam designed to con investors into believing they had inadvertently received a confidential stock tip faxed from a stockbroker to his client. Unlike typical unsolicited junk faxes recommending penny stocks, the handwritten fax had the appearance of an urgent message from a financial planner intended only for his client, “Dr. Mitchel,” urging “Dr. Mitchel” to immediately buy shares of a stock that was about to triple in price. In fact, according to the Commission, neither the financial planner nor “Dr. Mitchel” exists. Rather, the bogus fax was sent to more than one million recipients across the country - including a fax machine in the Commission’s San Francisco office - by stock promoters who made over half a million dollars unloading their shares on duped investors.
The Commission’s complaint, filed in the Southern District of New York, alleges that Joshua Yafa, 31, of Coral Gables, Fla., drafted a fax in which a fictitious financial planner urged “Dr. Mitchel” to buy shares of AVL Global, Inc. (ticker: AVLL), a company which had hired Yafa as a public relations consultant and paid him in stock. Yafa sent the supposedly misdirected “Dr. Mitchel” fax to more than 150,000 fax machines across the United States the evening of December 15, 2004. The complaint alleges that AVLL’s stock price soared by 25% the next day on trading volume 3,000% greater than normal, after which Yafa sold his shares of AVLL, reaping more than $300,000 in proceeds.
The Commission also charged Nocona, Texas, resident Michael O’Brien Pickens, 51, with hatching a copycat scheme. According to the Commission’s complaint, Pickens obtained a copy of Yafa’s “Dr. Mitchel” fax and had the AVLL ticker symbol replaced with the symbols of three different microcap companies Pickens had been promoting - Data Evolution Holdings, Inc. (ticker: DTEV), Infinium Labs, Inc. (ticker: IFLB), and Soleil Film, Inc. (ticker: SFLM). The Commission alleges that Pickens sent out nearly a million of the modified “Dr. Mitchel” faxes in December 2004. The share price of the three stocks climbed by as much as 100% on significantly increased volume, and Pickens made over $300,000 selling stock in the companies.
The Commission also brought fraud charges against Serafin Sierra, 45, a salesman at Miami-based Vision Lab Telecommunications, Inc., the “fax blasting” company that transmitted both sets of “Dr. Mitchel” faxes. According to the Commission’s complaint, Sierra learned of Yafa’s scam, and forwarded a copy of the original AVLL “Dr. Mitchel” fax to his customer Pickens, facilitating Pickens’ copycat scheme.
Linda Chatman Thomsen, Director of the Division of Enforcement, stated, “The Commission is committed to curbing the manipulation of microcap securities, and we will continue to find those who are responsible for committing these frauds and hold them accountable.”
Helane Morrison, District Administrator of the Commission’s San Francisco District Office, said, “The case against Vision Lab’s employee confirms our focus not just on the stock promoters who devise these schemes, but those who facilitate fraud on investors.”
Added Marc J. Fagel, San Francisco’s Associate District Administrator and head of Enforcement, “Investors need to be wary of market manipulation schemes, and consider the possibility that what looks like a hot stock tip may actually be part of a well-orchestrated scam.”
In addition to the Commission’s civil action, the United States Attorney’s Office for the Southern District of New York has announced the initiation of a related criminal action.
Tuesday, May 31, 2005
5/30/05: My SEC complaint about the Wellstone Filters—WLSF - illegal promotions
Christine Baker
[address deleted]
SEC Complaint Center
450 Fifth Street, NW,
Washington, D.C. 20549-0213
May 30, 2005
Re: Illegal Junk Fax Promotions by Wellstone Filters, Inc. – WLSF shareholder(s).
To Whom It May Concern:
After receiving two junk faxes touting Wellstone Filters on 9/12/04 and 9/30/04, I filed suit against Wellstone Filters and a number of junk faxers and spammers on 10/5/04 in Kingman, AZ, Superior Court, CV-04-915.
Enclosed are the Wellstone motion for summary judgment and my response including the declarations and exhibits.
• The 6 junk faxes from 10/03 to 11/04, Exhibits F 1-6, and the PK charts on Exhibit G indicate that the Wellstone shares were pumped up to the high of $1.60 in December.
At this time, I’m not aware of any WLSF junk faxes this year and Rosanne Baack with Wellstone Public Relations was surprised that I called about junk faxes in March since they hadn’t received any complaints since last year.
I agreed to dismiss Wellstone Filters because I do not have the legal skills and resources to successfully litigate that as the beneficiary of the illegal promotions and because they apparently failed to try to stop the illegal junk fax promotions, Wellstone Filters and its officers are liable for the faxes.
Wellstone Filters CEO Learned Hand denied in his declaration that he or anyone related to Wellstone ordered the faxes.
Notably, CEO Hand does not deny knowing about the illegal promotions, but he continues to refuse to respond to my questions about his internal investigation and he refuses to provide any information about the (suspected) faxers. Wouldn’t he know who has been selling?
What are the officers’ obligations when they become aware of illegal spam and junk fax promotions?
I’m hoping that the SEC will whether it is perfectly ok to ignore complaints by spam and junk fax recipients..
• I could not find any mention of the illegal promotions in the SEC filings and the 3/31/05 Quarterly Report Wellstone failed to disclose my suit.
I filed my suit in 10/04, Wellstone was served in early April and filed the report in May. If Wellstone and/or officer liability for the faxes can be established, it is quite likely that a class action for the junk faxes would result in a judgment for millions of dollars in statutory damages due to the extensive promotions for over one year, from at least 10/03 to 11/04.
At http://fight-back.us/forum/index.php?showforum=71 is some of my research, but since I’m not an investor, I have trouble putting the pieces together.
I still don’t know whether Anthony Cerami, Wellstone President Carla Cerami Hand’s father, actually sold shares as planned according to http://finance.yahoo.com/q/it?s=WLSF.OB.
• Wellstone received a loan from the Arrakis Fund, heavily promoted through Wellstone press releases.
The SEC filings disclose that Arrakis is controlled by CEO Hand’s brother Jehu Hand.
Wellstone announced the loan through press releases without the related party disclosure. Obviously, investors are more likely to buy WLSF shares when an unrelated party underwrote and funded the loan.
Is it ok to omit related party disclosures in the press releases?
• In 2004, Wellstone apparently received over $20 million from the sale of stock and spent over $20 million on “general and administrative? expenses.
Apparently Jehu Hand received 10 million shares for Farallon shell in 2001, subsequently benefited from the Arrakis deal and then received another 4 mill shares in 6/04.
I have trouble interpreting all those SEC filings and I sure don’t understand how a company in development stage with no revenue whatsoever can give away millions and millions of dollars in shares to related parties and advisors, while spending very little on R & D – and end up broke despite the enormous trading volume in 2004.
Is Wellstone’s purpose to enrich relatives of the officers such as Jehu Hand and Anthony Cerami as well as “advisors? such as John Smart and William Wilkinson?
I reviewed many SEC litigation releases and it appears that there is a sincere, yet utterly ineffective effort to curb stock fraud.
I followed Steve Kirsch’s investigation of the illegal fax promotions and the subsequent SEC suit against some of the parties related to Kos, Heysek, Lord, CNND, et al. However, the TWTN officers Steven Dao and Bruce Thomsen can now continue on to their next scam. Just like Wellstone CEO Hand, they denied sending the faxes when I contacted them. I really don’t understand why the SEC condoned their obvious involvement including the promo videos with Heysek and Gaskins. The same goes for Randall Rohm and Thomas Flynn who posed as officer for AHFI in the promo video.
If the conduct of the WLSF, TWTN and AHFI officers is legit, is there a reason why I should not purchase a shell, financed by people like Darrel Uselton who take many millions of shares for payment and then they pump with spam and faxes?
I have a legitimate business plan with an excellent chance to succeed, especially if I can raise funding through the promoters’ initial pump and dump and I’ll greatly appreciate your opinion.
In January I established http://pennystock-fraud.info/ and you can read that WYSK sent me 555 spams. I also posted how I first got the spam for Darrel Uselton’s UACP, then Uselton threatened to sue me (he didn’t), next he changed the symbol to ABZT and I got an ABZT junk fax.
I don’t understand why the SEC doesn’t immediately suspend trading as soon as illegal promotions begin. Why wait for investors to be defrauded out of many millions?
I’m looking forward to your response. Since I publish my investigations, please let me know if any part of your reply should remain confidential.
Sincerely,
Christine Baker
c: http://fight-back.us/forum/index.php?showforum=71 & http://pennystock-fraud.info/
Enclosures:
5/3/05 Wellstone Filters motion for summary judgment, statement of facts, CEO Hand’s declaration, exhibits
5/23/05 my response, declaration and exhibits.
12/16/03 Wellstone press release announcing the Arrakis funding without disclosure that CEO Hand’s brother Jehu Hand controlled Arrakis.
Posted by Christine on 05/31 at 05:20 PM in SELL - scammers and spammers, WLSF
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Friday, May 13, 2005
-Peter Leeds - spamming and scamming with deceptive self promotions
Peter Leeds tries to be more sophisticated and on first glance his disgusting advertising doesn’t look like SPAM.
The scam - “Kim” at posted at my credit blog:
“Penny stocks can be a risky investment so it’s good to know your facts. I found a great site that can help you learn how to make wise investments in the penny stock market. It provides a free guide with great information. You can find it here http://www.pennystocks.com Good luck with your stock picks!”
Apparently, a lot of people are too dumb to figure out that this is a SCAM, and in this case, an illegal promotion in violation of my terms. Pennystocks.com is a front for Peterleeds.com and there is NOTHING worthwhile.
So, stay away from Peter Leeds.
Since Peter has to resort to such deplorable and illegal advertising, his stock picks must truly suck.
-- URL e-mailed to and
“You owe me $50.
Christine Baker”
---------------------------------------
3/18/08 UPDATE: If course I didn’t get paid, but this reader submission speaks for itself:
I have used this service- while a few featured stocks here and there have accumulated in value, I can see that months have gone by with the majority of them in fact really just losing value after being featured for example in Hot List and Quick Fix sections.
A real Red Flag though, is their non-refundable subscription policy- it was a mistake to deal with anyone offering this.
To be fair, I’m sure that a lot of lemons have been screened out from the picks that are offered, and there is useful advise in the education materials, but I signed on hoping for a higher percentage of winning recommendations that would be better than picking stocks myself- personally, I probably would have been better off with joining some kind of signal provider service.
Mr. G.
Posted by Christine on 05/13 at 01:47 PM in Peter Leeds - scamming spammer
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WYSK—Wysak Petroleum, Inc. illegal promotions: 555 SPAMS as of right now
As of right now, I have 555 SPAMS for WYSK. As you can see, the SPAM is effective even though prices are down, some suckers ere buying. Heavy spam started 3/6/05 with several spams a day and on 4/4 I got 14 spams.
“Wysak Petroleum Inc, advises its shareholders that it has not in the past or otherwise approved spam emails from any “third parties”. Specifically, Wysak confirms that it has not authorized any information that has been used in a recent email spam. The Company is pursing with vigor these third parties and expects to be able to stop the misuse of information by legal action if necessary.”
My form submission at http://www.wysak.com/investor/contacts.php and e-mailed to :
“What is the result of your vigorous investigation? Who do I sue for the $5,550 owed to me for 555 SPAMS?
What has the SEC done and who is your SEC contact?
Thank you,
Christine Baker
c: Posted at http://pennystock-fraud.info”
Update 5/29/05:
I haven’t received a single spam since the 2 spams on 5/12 - on 5/11 I got 12 spams and on 5/10 I got 18 spams.
Maybe somebody got pissed and had them shut down? They didn’t respond to my notification.
Posted by Christine on 05/13 at 12:58 PM in SELL - scammers and spammers, WYSK
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Friday, April 01, 2005
FRAUD ALERT: Reynaldos—RYNL (fka Twister Networks TWTN) Mafia intimidation tactics
The long story is at the Twister Networks / Reynaldos Fight Back!!! topic.
In short, some slimebag associated with them called me numerous times and made anoymous legal threats. Since he wouldn’t identify himself, I posted an excerpt of one of the calls.
Then he was upset because I recorded his call without his permission and posted it for identification. Some people sure have a lot of nerve!
It’s quite likely that he’s associated with Twister Networks, I had sued them for sending me the pump and dump faxes.
These people operate like the Mafia - I’m beginning to understand why so few people go public with stock fraud info. Of course that won’t stop me from sending out a press release with a headline such as
“FRAUD ALERT: Twister Networks—TWTN acquisition of Reynaldos Mexican Food—RYNL—may result in many millions in losses for investors.”
Well, something like that. I’ll attach some TWTN charts, the SEC suit, etc.
I don’t understand why the SEC lets them get away with it.
Posted by Christine on 04/01 at 07:56 PM in SELL - scammers and spammers, RYNL fka TWTN
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Monday, March 07, 2005
If you lost money on TWTN, CNDD, AHFI, BDYS or SGNJ
I’ve received several e-mails from readers asking for additional info and help - I already posted what I know and I’m doing some more research on TWTN.
Please sign up for the Yahoo group at http://groups.yahoo.com/group/cnddStockFraud/ and of course I’ll post future news here.
I expect class actions to be filed if there are any assets.
Save any FAXES you received.
You’re entitled to a minimum of $500 per unsolicited fax, for more info please check http://www.junkfaxsuit.info/
Posted by Christine on 03/07 at 07:01 PM in SELL - scammers and spammers, AHFI, CNDD, RYNL fka TWTN
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Saturday, March 05, 2005
TWTN—Twister Networks, Inc. turns into—RYNL - Reynaldos Mexican Food Company, Inc.
VOIP turns into enchilada
I posted my research at the Fight Back!!! Forum
They changed the symbol and name on 3/5/05, but still list the http://www.twisternetworks.com site.
I did a google for Reynaldos Mexican Food and there is a real company in California at http://reynaldosmexicanfood.com/
Their website says nothing about Bruce Thomsen and Steven Dao, listed as officers on the NV corporate records for Reynaldos Mexican Food Company. There is of course a possibility that they made enough cash on the pump and dump to buy out the Garcias.
Or maybe it’s another scam like the AHFI fitness centers.
Reynaldos Mexican Food corporation in California is suspended. - that’s the Garcias’ company. Maybe they ran into tax trouble and Dao and Thomson explained to them how a quick pump and dump will solve their financial problems.
On 1/7/05, Thomsen REFUSED my mailing with the summons and complaint, despite the fact that he is listed as registered agent for Twister Networks with the California Secretary of State.
How can the president of a company refuse service when he is named as registered agent?
Note: Thomsen is still the registered agent for Twister Networks - the Cal. corporation, but the address changed to Irvine, CA.
RYNL had a 40 for 1 split and closed at .60 on Friday. Not exactly heavy trading, but who in their right mind would buy those shares?
1.05 1000 12:42:22
1.00 1000 12:42:05
0.95 2722 12:39:42
Who are these people and why are they buying RYNL?
There must be a whole bunch of default judgments against Twister, but I’m now considering spending the $$$ to serve Dao and Thomsen personally, just to find out what the heck is going on.
The full story including my correspondence with their attorney Michael Spadaccini
Posted by Christine on 03/05 at 07:52 PM in SELL - scammers and spammers, RYNL fka TWTN
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