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A recent article from the San Diego Union Tribune follows:
"For Virtual Gaming, life is like a house of cards
DON BAUDER
San Diego Union-Tribune library researcher Denise Davidson assisted with this column.
05-May-2000 Friday
Escondido's Virtual Gaming Enterprises has filed government papers to become a fully reporting company -- and it's clear that it should not be named Virtuous Gaming Enterprises.
The Internet gambling company, based in a home on Seascape Glen, averred in its 10KSB filing with the Securities and Exchange Commission that it "is not currently involved in litigation."
The company had been the subject of an SEC probe "regarding a cease-and-desist proceeding and stop-order proceeding" for possible violations of securities laws, says the filing. But without admitting or
denying the SEC's charges, the company agreed to stop committing any violations, says the filing.
But that's news to the SEC. "There has been no enforcement action," says Kelly Bowers, SEC official in Los Angeles.
It is a matter of public record that the SEC has been looking into Virtual Gaming Enterprises. "We issued a subpoena and got a court to enforce the subpoena," says Bowers. As reported here last year, a federal judge found
the company in contempt for not providing documents.
Yesterday, the company's chief executive, Virgil Williams, was perplexed by the SEC's statement. He called his lawyer, as did I, but by day's end, there was no explanation.
There are other provocative nuggets in the company's SEC filing. "In October 1995, a federal district court found Mr. Williams liable for securities fraud and ordered him to pay a joint and several judgment of $26,987,721," confesses the 10KSB.
This was for his role in the notorious Alco International Group caper. The main villain was former San Diego stock manipulator Melvin Lloyd Richards,who went to prison for two years over Alco matters, and a month after
emerging last January was sent back to prison as a securities fraud recidivist.
Williams claims he was only on the Alco board for a few months, and made procedural mistakes that got him included in the final judgment.
Then, according to the 10KSB, Williams filed for (Chapter 7) bankruptcy in 1997. "It was precipitated by the judgment," he says.
The attorney who won the judgment, Daniel J. Mogin, says, "A fraud judgment is not dischargeable in bankruptcy," and besides, he was never notified of
Williams' Chapter 7. "You can't have a secret bankruptcy. You have to give notice to creditors." Mogin says Williams has paid none of the judgment.
According to the 10KSB filing, Williams' wife, Brenda, is the only other official of the company, serving as secretary and treasurer. In 1999, he made $165,000 and she made $64,167 although the company at that point had
never had any revenues and had a cumulative deficit of $331,719.
She went into bankruptcy at the same time he did. According to the 10KSB,they had both attended Ambassador College in Pasadena, a now-defunct religious institution affiliated with the Worldwide Church of God.
In recent months, the company has pumped out news releases announcing its purchases of new Internet gambling sites. It now has a sports book,simulated casinos, etc., and had its first revenues ($25,000) last month,says Williams.
There is one mystery. Recently, several people have received offers to buy restricted stock in Virtual Gaming for $3 at the time that unrestricted stock was selling between $10 and $20. Williams claims that he did a stock
option deal with a Bangkok company, and that company then did a deal with a Florida brokerage that is peddling the cheap stock, and he wants it stopped.
Philip M. Harrison of American Express Financial Advisors told his client,Walter Pagels, not to nibble on the $3 offering. Pagels turned down the deal, and a telemarketer called back: "He got abusive, (and) said, `You
don't have the backbone to do this,' and hung up," recalls Pagels.
Don Bauder's email address is don.bauder@uniontrib.com"
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