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Non-Tech : Auric Goldfinger's Short List

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To: SEC-ond-chance who wrote (16707)12/29/2005 8:50:47 PM
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=DJ IN THE MONEY: GTX Global, A Promoter's Wife And The Felon

By Carol S. Remond

A Dow Jones Newswires Column

NEW YORK (Dow Jones)--GTX Global Corp. (GTXC) has no current financial statements, no apparent revenues and its founder and former president is a convicted felon.

Worrying enough, but what might concern investors even more about GTX Global is the manner in which the small Internet technology provider went public in January; that is, via a merger with a Florida corporate shell called Inc. GTX Global trades on the unregulated Pink Sheets market for about $8.04 a share, giving it a $250 million market capitalization.

A balance sheet provided by GTX Global, known as Gatelinx Global Corp. until October, shows that it had $358,663 in cash and $1.8 million in total liabilities as of the end of August.

What the report doesn't show is that Shannon Oehmke, the wife of a stock promoter named Donald Oehmke, was a secretary and director of the corporate shell that merged with GTX Global earlier this year.

Why should that interest investors?

Because Donald Oehmke is currently being sued by the Securities and Exchange Commission in the U.S. District Court for the Southern District of Florida for his alleged participation in a massive scam to pump the stock of two worthless Pink Sheets companies called Concorde America Inc. (CNDD) and Absolute Health and Fitness Inc. (AHFI).

According to a complaint filed by the SEC in February, Oehmke and others were engaged in a fraudulent scheme to pump the shares of Concorde America and Absolute Health, illegally netting some $22.9 million in the process. The SEC has frozen the assets of Oehmke and others involved in the scheme.

The SEC alleges in its complaint that Oehmke and another promoter named Bryan KOS "instigated both schemes, artificially creating demand for stock they owned in Concorde America and Absolute Health through unauthorized and false press releases, facsimile and e-mail spams, Internet websites, promotional videos, and automatic voice-mail messages since approximately June 2004."

According to documents filed by the SEC in court, Oehmke controlled two corporate shells that were used to reverse merge bogus assets that were later pumped through the use of offshore entities with trading accounts at U.S. brokerage firms. The SEC alleges that Oehmke made at least $3.7 million in illegal profits from these transactions. In the case of KOS, the SEC said he received at least $250,000.

Oehmke and KOS recently abandoned their efforts to reverse the SEC's freeze of their assets and consented to a preliminary injunction. They are negotiating settlements with the Commission.

This isn't the first time that Oehmke has run afoul of securities regulators. In 1991, he was permanently barred by the NASD from associating with member firms for participating in a scheme to make improper use of customer funds and, among other things, disseminating misleading sales literature. Without admitting or denying the charges, Oehmke consented to the ban and was fined $150,000.

In September, before he and KOS consented to the SEC's preliminary injunction and freeze order, Oehmke said in a court filing that the Commission had "failed to substantiate (its) allegations."

Shannon Oehmke, who also uses the name Shannon Payne, used an address in Kalamazoo, Mich., in's corporate filings. Donald Oehmke and one of his consulting firms called Ventana Consultants used the same address. Ventana is also named in the SEC complaint in the Southern District of Florida.

Shannon Oehmke isn't named in the SEC action against her husband and others.

Ted Planzos, a lawyer representing Oehmke in the ongoing SEC litigation, said in an email sent to Dow Jones Newswires that Oehmke sold the shell used to take GTX Global public "in or about May 2000." Planzos said neither Oehmke, nor his wife, own stock in GTX Global. Planzos didn't comment on Shannon Oehmke's role at the shell company.

David Levenson, a lawyer representing GTX Global, said he knew that Oehmke was involved with the company used to take GTX Global Public. But Levenson said "I would bet dollars to donuts that he is not" currently involved with the company.

Levenson, who said he has represented Oehmke over the years, is one of the lawyers representing Bryan KOS in the ongoing Absolute Health and Concorde America SEC litigation in Florida. Levenson said he was "almost certain that KOS" is not a GTX Global shareholder.

Levenson declined to comment on KOS' and Oehmke's decisions to consent to the SEC's preliminary injunction and assets freeze. Levenson and Planzos declined to comment on their clients' settlement talks with the SEC.

Ms. Oemhke's involvement with that Florida shell aside, there are some red flags that might interest investors.

David Hagen, the company's founder and former CEO, is a convicted felon who served time in jail for his involvement in a direct mail scheme in the late 1980s.

An amendment to Gatelinx' articles of incorporation filed with the state of Florida in March 2005 shows that Hagen was appointed president and CEO of in December 2004. According to that document, changed its name to Gatelinx Global in January 2005. Besides Hagen, the document lists his wife Annette Hagen as treasurer and Mark Brecher as secretary. The name change and Hagen's appointment were approved by's directors, including Shannon Oehmke and Dawn Brecher, on Dec. 10, 2004.

According to published reports, David and Annette Hagen, then going by the last name Defusco or Dufusco, were indicted with conspiracy and seven counts of mail fraud in 1989 for their roles in a scheme to lure people to visit time-share resorts on the false premise that they would receive cars and cash prizes. David Hagen pleaded guilty to one count of mail fraud and conspiracy to commit mail fraud and was sentenced to two consecutive five-year prison terms. Annette was sentenced to 35 months in prison for her part in the scheme.

Responding to allegations on a short-selling Website called that David Hagen controls GTX Global, the company said in a press release on Nov. 15 that "the former founder and CEO, resigned as an officer and director of Gatelinx" earlier in 2005 after reports of a previous "personal situation...that occurred over 15 years ago" were circulated on the Internet.

The company said Hagen resigned for "the good of the company and Gatelinx Global changed its name to GTX Global." GTX Global has filed a $50 million suit against and its principal Andrew Left alleging trade libel and interference with prospective economic advantage.

GTX Global's lawyer Levenson said that there is no relationship between his client Bryan KOS and Hagen. Oehmke's lawyer Planzos said that Donald Oehmke never had any business dealings with David Hagen.

Levenson said his contacts at GTX Global include David Gust, current CEO Curtis Garth and company general counsel Edward Ovsenik. Gust is president of Vizual Corp., a company from which GTX Global recently purchased some assets. Gust was also the principal of VidMe Communications, a company that entered into a strategic partnership with Gatelinx last year.

Gust, Garth and Ovsenik didn't return telephone calls.

Before he became involved with Gatelinx, David Hagen ran a satellite dish company called Prime TV. Prime TV shut its doors in early 2004 following a dispute with DirectTV.

Both Gatelinx and Prime TV operations were located in North Carolina. Coincidentally, so were the purported gyms supposed to have made out the business of Absolute Health and Fitness last year.

It's unclear whether the Hagens are current shareholders of GTX Global. Which leads us to one last reason why investors may want to stay clear: GTX Global trades on the Pink Sheets market so it doesn't have to file periodic financial statements with the SEC and there is virtually no information available about the company or its insiders.

(Carol S. Remond is an award-winning columnist and one of four who write the "In The Money" feature. Most recently, she won a 2005 Gerald Loeb Award for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks.)

-By Carol S. Remond, Dow Jones Newswires; 201-938-2074;

(END) Dow Jones Newswires

December 20, 2005 12:31 ET (17:31 GMT)

Copyright (c) 2005 Dow Jones & Company, Inc.
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