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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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From: StockDung10/18/2019 12:00:06 PM
   of 121948
 
The Bryant D Cragun story to be told. The story of this poor excuss for a Human Being and blood sucker. From his stable of stock promoters (Most of which have been indicted or sued by the SEC for fraud) to his stable of run down boiler room stocks.

Con-men don’t stop being cons, they just try to learn from their mistakes and make more money the next time around.

Bryant Cragun and CRIMM Boiler Room Crew spun a web of lies to trick unsophisticated investors into purchasing interests in companies that had little or no value

Bryant Cragun pictured with his wife Eimee Edralin Cragun also know as Mrs. Philippines World 2008. Please note the Ziasun 8 appoligise for suggesting that Cragun is missing two fingers when he was caught stealing money from the family cash register when he was a child and the draw was slammed.

NOTICE TO ZIASUN BAD GUYS FROM THE ZIASUN 8: WE ARE HUNTING YOU + YOU CANNOT HIDE FROM US! YOU ARE NOW 1 DAY CLOSER TO PRISON JUST LIKE MARK HARRIS FOUND OUT!

WE ARE GROWING. WE NEVER FORGIVE. WE NEVER FORGET. WE ALWAYS FINISH WHAT WE START




Eimee Cragun and Bryant Cragun







(Eimee and Bryant Cragun with daughter Carmella)



SEALED DOCUMENT- PLEA AGREEMENT for Defendant Mark Harris. (mat) (Entered: 06/12/2013)



NOTE TO MARK HARRIS WHO FLIPPED FIRST: The government works its way up the criminal hierarchy to get to the biggest fish

The government attempts to flip the smallest fish to get to the biggest fish. The investigators usually attempt to use the testimony of the smallest fish to work their way up the ladder to the middle fish and than use the middle fish to catch the biggest fish. The government uses the smallest fish to turn in the middle fish and the middle fish to turn in the biggest fish. Each level of fish is used as bait by the government to reel in the next higher level of fish.

The government would much rather deep fry the biggest fish than either the middle fish or the smallest fish. The government usually considers the smallest fish, small fry. The government expends enormous time and economic resources to investigate and prosecute white collar crimes. As the government works hard, its hunger grows. After so much work by the government, the smallest fish and the middle fish will hardly fill their appetite. The government wants to deep fry the biggest fish.

The Smallest Fish

The smallest fish have to worry about both the middle fish and the biggest fish distancing itself from them. In turn, the middle fish have to worry about the biggest fish distancing itself from both the smallest fish and the middle fish. The smallest fish need to worry about both the middle fish and the biggest fish leaving them hanging out to dry, all alone in the government's net. The smallest fish should look for any subtle changes in the behavior of both the middle fish and the biggest fish for clues as to whether those other fish (the middle fish and the biggest fish) will let the smallest fish fry. After all, if the government cannot eat one big fish or several middle fish, it can fill its appetite by eating plenty of small fish. As a result, the smallest fish become paranoid as their fears grow about the threat from each level of fish above them and the government right in front of them.

The Middle Fish

The middle fish have the biggest problem. The government usually flips the smallest fish to get to the middle fish that is closest to the biggest fish. The middle fish have to worry that the smallest fish do not turn them in to the government to fry. The middle fish also have to worry that the biggest fish may distance itself from the middle fish and leave them hanging out to dry. The middle fish should be alert for any subtle changes in behavior from both the smallest fish and the biggest fish. If the government cannot eat the biggest fish, it can always fill its appetite with plenty of small fish and several middle fish. It's particularly tough being the middle fish. As a result, the middle fish often becomes paranoid as they worry about the threat from the smallest fish under it, the biggest fish over it, and the government right in the middle.

The Biggest Fish

The government loves to feast on the biggest fish. After so much hard work and effort, the government's hunger can best be filled by eating the biggest fish. The biggest fish has to keep both the middle fish and the smallest fish in line, while distancing itself from the other fish. It is quite a balancing act. If the biggest fish stays too close to the other fish, it risks being cast too early into the government's net. Rather, the biggest fish hopes that the governments hunger is satisfied by eating only the smallest fish and/or the middle fish.

If the biggest fish distances itself from the either the smallest fish or the middle fish, it risks alienating the other fish who do not want to fry instead of the biggest fish. The biggest fish must remain alert for any subtle changes in the behavior of both the smallest fish and the middle fish. The biggest fish knows that the first one of the other smaller fish (the smallest fish and the middle fish) to cooperate with the government usually gets the best deal and does not become part of the festive meal. It is often called a race to the prosecutor's office to be the first fish in, so the winner may be able to cut the best deal with the government and avoid being fried. As a result, the biggest fish often becomes paranoid, as it fears the threat of the smallest fish and the middle fish below it and the government bearing down on it.

The Government

The government often casts a wide net in its investigation of white collar crime. The government investigators use the smallest fish from its net as bait to catch the middle fish and they use the middle fish as bait to catch the big fish. The government prosecutors feed on the paranoia of the little fish, the middle fish, and the biggest fish as they scramble to avoid becoming part of the government's festive meal.

As I said, the government's wants to fry the big fish to satisfy its strong appetite. However, if the biggest fish does not fry, the other fish will fry, instead of the biggest fish. Both the smallest fish and the middle fish would much rather be eaten raw by the government, than to be cooked deep fried.

After all, how many times have you heard criminals refer to government investigations as "fishing expeditions."

Written by:

Sam E. Antar (former Crazy Eddie CFO & convicted felon)

For additional advice from a convicted felon, please read my other blog posts:
whitecollarfraud.blogspot.com


Fourteen Arrested for Market Manipulation Schemes That Caused Thousands of Investors to Lose More Than $30 Million

Two Federal Indictments Charge 15 Defendants in Plots That Fraudulently Inflated Stock Values and Laundered Profits Through Offshore Accounts

U.S. Attorney's Office February 14, 2013
  • Central District of California (213) 894-2434

LOS ANGELES-Federal authorities have arrested 14 people named in two federal indictments that allege long-term schemes to manipulate stock prices that led to more than 20,000 investors losing over $30 million when artificially inflated stock prices collapsed. As one defendant described his scheme during a wiretapped phone call: "What I do is turn stock into money."

The arrests were made yesterday after two grand jury indictments were unsealed Wednesday. The indictments detail two separate, large-scale fraud schemes in which conspirators gained control of the majority of the stock of publicly traded companies, often co-opting company management to assist in these efforts; concealed their control of the stock by purchasing and transferring shares to offshore accounts and to nominee entities with names such as "Dojo," "Picasso," and "Big Dog"; fraudulently inflated the prices and trading volumes of the companies' stocks through slick marketing campaigns, misleading press releases, payments to stock promoters, and "cross-trading" among co-conspirators that made it appear the stocks were being actively traded; coordinated the sale of the companies' shares at the peak of the fraudulently manipulated market; and hid profits in nominee and offshore accounts.

According to court documents, the defendants are serial market manipulators who carried out several fraudulent deals each year, each of which generated several million dollars. The defendants generally targeted marginal companies operating in areas they believed could easily be touted as generating breakthroughs or deals that would explain sudden increases in trading volume and price, including companies purportedly involved in pharmaceuticals, hair restoration, green technologies, entertainment, oil and gas development, and e-commerce websites. The indictments allege that increased trading volume and higher stock prices were actually the result of the defendants' fraudulent actions. A company CEO brought into one of the schemes summed up a typical deal during a wiretapped call: "There's nothing in there, there's nothing to the company. It's monkey business."

The indictments allege that the schemes collectively engaged in five specific deals that defrauded more than 20,000 investors around the world and generated more than $30 million in illegal profits.

"This case has dismantled a far-reaching stock market manipulation scheme run with ruthless efficiency and operated with one goal in mind-to steal money from the investing public," said U.S. Attorney André Birotte Jr. "This type of predatory behavior cheats the average investor, erodes overall confidence in the markets, and has a devastating impact on companies and their employees."

One indictment alleges a scheme led by Sherman Mazur and his nephew, Ari Kaplan, charging that they "perpetrated a multi-million-dollar scheme to fraudulently inflate the prices and trading volumes of public company stocks and then sell millions of shares of those companies at the fraudulently inflated prices to the investing public for substantial profits." The indictment alleges that the scheme involved a number of companies, but focuses on deals involving two businesses-GenMed, which purported to develop, manufacture, and distribute generic pharmaceuticals; and Biostem, which purported to develop and license regenerative stem cell treatments, including hair regrowth technology.

The 32-count Mazur indictment charges nine defendants, all of whom were taken into custody yesterday morning. They are Sherman Mazur, 63, of the Westwood district of Los Angeles, who controlled a company called the London Finance Group, Ltd.; Ari Kaplan, 40 of Venice, who is Mazur's nephew and was his partner in the London Finance Group, as well as in a series of other business endeavors; Grover Henry Colin Nix IV (who generally used the name "Colin Nix"), 39, of the Los Feliz district of Los Angeles, who controlled the Santa Monica-based Calbridge Capital LLC, which purported to be a "boutique investment banking firm"; Regis Possino, 65, of the Pacific Palisades district of Los Angeles, a now-disbarred attorney who was Nix's partner at Calbridge Capital; Edon Moyal, 32, of Carlsbad, California, who controlled a company called 8 Sounds, Inc. and while allegedly involved in this scheme was free on bond pending trial in a criminal case filed in federal court in San Diego; Mark Harris, 56, of Scottsdale, Arizona, a stock promoter who controlled Apache Capital LLC, an investor relations firm in Scottsdale; Joey Davis, 46, of the Los Feliz district of Los Angeles, who controlled Scripted Consulting Group, a public relations firm in Los Angeles and who was allegedly involved in this scheme while free on bond pending trial in a criminal case filed in federal court in Los Angeles; Curtis Platt, who turned 51 today, of Sarasota, Florida, who controlled Big Dog International LLC; and Dwight Brunoehler, 62, of Maitland, Florida, who is the CEO of Biostem, a company based in Clearwater, Fla.

The Mazur indictment alleges that the nine defendants conspired to commit securities fraud and wire fraud. The indictment alleges that members of the scheme generated at least $13 million in illegal proceeds when they sold their shares of manipulated companies, a figure that includes at least $2.1 million in illegal proceeds from the manipulation campaign for Genmed, as well as $500,000 in illegal proceeds from the ongoing manipulation campaign for Biostem. The indictment further alleges that Mazur, Kaplan, Nix, Possino, and Harris engaged in money laundering, using funds transferred from offshore accounts to promote their fraudulent scheme.

"The defendants' alleged combination of celebrities, press releases, gimmicks, and lies was similar to a how a magician deceives unsuspecting believers into an illusion," said Bill Lewis, Assistant Director in Charge of the FBI's Los Angeles Field Office. "While operating the schemes alleged in the indictments, the defendants kept their audience captive until stock prices peaked, while investor money vanished into defendants bank accounts."

The second indictment concerns a stock manipulation ring allegedly headed by Possino-a former Los Angeles County deputy district attorney-and Nix, both of whom are also key players in the Mazur indictment. This second indictment also outlines a broad scheme to manipulate stock prices and it focuses on deals involving three companies-Sport Endurance Inc., which purported to develop, manufacture, and distribute energy drinks and nutritional supplements; Imobolis, Inc., which came to be known as FrogAds and which purported to operate an online bulletin board for classified advertisements; and Empire Post Media, which purported to provide media services, including post-production services, for feature films and television programs. This 37-count indictment charges 11 defendants, some of whom are also charged in the Mazur indictment. Those named in the second indictment are: Regis Possino, who along with Nix, controlled a series of companies used in relation to the stock manipulation scheme; Grover Henry Colin Nix IV, who was generally known as Colin Nix; Tarun Mendiratta, 42, of Weston, Conn., who claimed to have earned between $75 million and $80 from market manipulation schemes over the past decade and who allegedly participated in the current scheme, in part, by using a cell phone smuggled into the prison where he was housed; Ivano Angelastri, 49, a resident of Switzerland and Dubai, who controlled funds and securities in foreign accounts for himself and Mendiratta (Angelastri is the one defendants who was not arrested yesterday; he is currently being sought by authorities); Mark Harris, the Arizona-based stock promoter; Edon Moyal; the San Diego County man; Joseph Scarpello, 52, of Tustin, California, a disbarred attorney who controlled Taylor Financial, Ltd.; Julian Spitari, 47, of Encino, California, who was the CEO of the company that came to be called FrogAds; Peter Dunn, 72, of the Brentwood district of Los Angeles, who was the CEO of Empire Post Media; William Mackey, 61, a stock promoter who resides in Plantation, Florida, who allegedly was free on bond in a federal case filed in New York City when he committed the crimes alleged in this indictment; and Joseph Davis, the PR executive.

The Possino indictment alleges that members of the conspiracy made at least $18 million in illegal proceeds from selling their shares of manipulated companies. This figure includes at least $1 million in profits from the Sport Endurance campaign, at least $6.8 million from the FrogAds deal and at least $1 million in profits from the Empire Post Media deal. The defendants named in this indictment are charged with conspiracy to commit securities fraud and wire fraud. Possino, Nix, Mendiratta, Angelastri, Harris, Moyal, Scarpello, and Spitari are also charged with money laundering related to funds transferred from offshore accounts.

"This investigation took law enforcement above and beyond its traditional role in financial crimes," said N. Dawn Mertz, Special Agent in Charge of Internal Revenue Service (IRS)-Criminal Investigation's Los Angeles Field Office. "Using foreign bank accounts to promote their scheme, the case put us square in the middle of the world of international banking and the sophisticated electronic movement of money. IRS Criminal Investigation is proud to bring our accounting skills to this joint venture and to put a stop to this and other types of white-collar fraud."

While the two indictments outline conspiracies to engage in wide-ranging market manipulation, each focuses on a small number of deals that illustrate the overall schemes. One deal concerns the alleged manipulation of FrogAds stock. After buying up all of the company's stock just over a year ago, members of the conspiracy arranged for FrogAds to issue a series of press releases touting the company's successes and growth potential, which included making bogus claims that the FrogAds website was among the most visited on the Internet. At the same time, several online stock pickers and at least one analyst recommended FrogAds after being paid by some of the defendants. After the company held a press conference with a well known actress (who was not part of the conspiracy) announcing that she would serve as FrogAds' celebrity spokeswoman and while members of the conspiracy cross-traded stock to give the false appearance of increased market demand, the price for FrogAds stock went up. But the purported success of FrogAds and the apparent interest in the company's stock were an elaborate fabrication. The indictment quotes one member of the conspiracy saying in a recorded phone call: "You're dressing this thing up as a multi-million dollar deal, you gotta make sure that we have all our ducks in order." The manipulation of FrogAds' stock allegedly orchestrated by the conspiracy resulted in profits of nearly $7 million for the defendants.

The defendants arrested yesterday morning-all of the charged defendants except Angelastri-made their initial appearances in federal courts in the districts where they were arrested. Mazur and Possino, both of whom entered not guilty pleas to the charges in their indictments, are currently being held without bond, but they are scheduled to have detention hearings next week in U.S. District Court. Trial dates for both cases were scheduled for April 9 in federal court in Los Angeles.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

If convicted, each of the defendants would face statutory maximum penalties of at least 100 years in federal prison. Some of the defendants, including Mazur, Possino, Nix, and Mendiratta face potential life sentences.

Yesterday's arrests were made under two indictments unsealed today that are the result of ongoing investigations being conducted by the FBI and IRS-Criminal Investigation. The investigation involved a series of wiretaps that resulted in the interception of more than 60,000 phone calls and 24,000 text messages.

Genmed Holding Corp
. is an international US and Holland based company, focusing on the delivery of low cost generic medicines directly to distribution chains in Europe and other countries. Generic medicines, which become available when the originator medicines patents has expired, are, among to governmental pressure and new insurance policies, increasingly used as equally alternatives to higher-priced originator pharmaceuticals.

Genmed's promoter Mark Harris who paid hudreds of thousands of dollars to promoters to tout stock.

Stock promoter's divorce reveals life of luxury
David Baines
Vancouver Sun

Saturday, May 13, 2006
CREDIT: Vancouver Sun/Handout


From 1986 to 1997, Vancouver businessman MARK HARRIS worked in phone rooms that used high-pressure methods to sell stocks, most of dubious value, to people all over the world.

For more than a decade, Vancouver businessman MARK HARRIS made a fortune running boiler rooms -- high-pressure telephone stock sales operations -- in Europe and Asia. Unfortunately for his net worth, his wife Lori made a career out of spending it.

From 1986 to 1997, HARRIS worked in phone rooms that used high-pressure methods to sell stocks, most of dubious value, to people all over the world. Initially, he manned the phones himself, but eventually became involved in setting up and overseeing the sales operations.

For various reasons, some of them regulatory, he moved often -- from Spain to Hong Kong, Macau, back to Hong Kong, then to the Philippines, California and finally Vancouver. Throughout most of this period, he worked closely with BRYANT CRAGUN, owner of a boiler room operation that was rather grandly called Oxford International Management.

Wherever he went, Lori followed. It was a nomadic existence, but it had its rewards. In his peak earning years, he made more than $500,000 US a year.

Neither of them was shy about spending it. They employed a maid, a gardener, a chauffeur, even a dog-walker. Every year, for Lori's birthday, they went to Italy. During the beach season, they spent weekends on Boracay Island, about 90 minutes from Manila.

Aside from the occasional modelling job, Lori HARRIS did not work. She took Spanish lessons, she played tennis, she flew to Hong Kong to have her hair done. But mostly she shopped.

She bought Versace, Dolce & Gabbana and other expensive designer clothes. When her credit card at Saks Fifth Avenue exceeded her limit, she simply opened another account and purchased an $8,000 full-length mink coat. She shopped so much that she hired a personal shopper to help her.

In 1995, the couple began construction of a mansion on an acre of land in Osoyoos. The project, originally budgeted at 3,000 square feet and $500,000, ballooned to 6,000 square feet and $3 million, including an outdoor dining area modelled after the Four Seasons Resort in Bali and five Versace carpets costing more than $100,000.

In 1997, HARRIS returned to Vancouver to provide investor relations services for many of the same companies he had been selling by phone. Business was initially good, but by 2000, the MARKet had collapsed. His income was decimated and his marriage in a shambles. In 2002 they separated.

Unable to agree on a division of assets, the couple went to court. In a 10-day trial earlier this year, and in a 14-page decision released just days ago, their private lives were laid bare, providing unique insight into the controversial and lucrative business of boiler room operators.

Not mentioned are the people who bought stock from HARRIS's teleMARKeters. According to newspaper accounts, court records and securities filings, many of them lost substantial amounts of money.

One was Guy Fletchere-Davies, a 62-year-old carpet manufacturer in Melbourne, Australia. He told the Wall Street Journal in August 2000 that he bought shares of ZIASUN Technologies Inc., which traded on the dreadful OTC Bulletin Board in the U.S., and several other junior stocks, from the Manila office of Oxford International Management, where HARRIS ran the teleMARKeting operation.

Fletchere-Davies said his brokerage account was passed around among several Oxford salespeople, then to a successor firm. In late 1999, "the phone calls stopped and the paperwork dried up." ZIASUN collapsed and he lost $150,000.

By this time, HARRIS had left Oxford and at CRAGUN's behest he had set up an investor relations business, Veritas MARKeting & Communications Group Ltd., with offices in Vancouver and Solana Beach, Calif., to help promote ZIASUN and other stocks that Oxford was selling.

Oxford and Veritas have since shut down and CRAGUN has reportedly retired, but HARRIS continues to provide investor relations services through a private firm, Skylla Capital Corp., which operates out of a corner office in Park Place in downtown Vancouver.

Skylla is the grotesque six-headed monster in Greek mythology that swooped down on passing ships and sea creatures, but HARRIS denies that any of his business activities have been predatory: "Every company I have been associated with was fully registered and all the companies we recommended were legitimate," he said in an interview this week.

n

HARRIS is now 49, but his boyish good looks make him appear much younger. He dresses and speaks in a casual but calculated way. His cell phone rings incessantly. For the most part, he ignores the calls to focus on a Vancouver Sun reporter who, uninvited and unannounced, has dropped into his office.

According to the divorce action, HARRIS was born and raised in Calgary. He dropped out of school in Grade 11 and worked at a steel mill, as a truck driver, at McDonald's, and as a car salesman.

In 1986, he met and married Lori, seven years his junior. He began training as a stock broker, then a friend offered him a job with a firm called Indigo Investments in Torremolinos, Spain.

"He immediately began work as a teleMARKeter persuading prospective clients to purchase stock in companies," Judge Linda Loo noted in her judgment.

It was clear that he had an aptitude for the job. He made $5,000 in his first month. The following year, he got a better job as "teleMARKeting sales manager" for a firm called Equity Management Services in Marbella, Spain. It paid $10,000 per month plus a percentage of the business that the phone room generated.

However, the judge noted, "the job ended abruptly after about a year when the payroll failed to materialize." HARRIS told The Sun he's "not 100 per cent sure why it shut down." But in the fluid world of boiler rooms, such businesses disappear and reappear with alarming frequency and speed. In this instance, the phone team was offered similar work in Hong Kong starting the following week.

Within five months, HARRIS was back making $10,000 per month, but once again, the job suddenly ended, this time when the Hong Kong Securities and Exchange Commission intervened. Why the commission intervened is not explained.

HARRIS found work in a similar operation in Macau, but the couple found the living and working conditions unagreeable, so they decided to use their savings to travel throughout Europe and Asia.

In 1990, HARRIS returned to Hong Kong and teamed with BRYANT CRAGUN, a former senior vice-president with Goldman Sachs, in another teleMARKeting operation. Within months, however, Hong Kong regulators once again stepped in and the phone room was shut down. Once again, no reason is given. HARRIS told The Sun that, to meet capital requirements, the firm had posted shares of an OTC Bulletin Board company rather than a Nasdaq company, and the authorities refused to accept them.

The following year, in April 1991, CRAGUN established another teleMARKeting business in the Philippines, Oxford International Management, which styled itself as a "U.S. equity fund manager." He hired HARRIS to manage the phone room, with huge success.

Within four months, HARRIS was making $10,000 US per month, plus a percentage of sales. By 1993, the firm had grown to 50 employees and he was making more than $250,000 US per year. By 1995, the firm had offices in Spain, Brussels, Taipei, Indonesia and Bangkok, and he was making $500,000 US annually.

Life was good. The couple travelled extensively. Each Christmas they stayed at the Four Seasons Hotel in Bali. During the summer, they spent weekends on Boracay Beach, where HARRIS invested $200,000 in an aquasports business which provided them with boats and jet skis, but generated nothing in the way of profits. They also invested $85,000 in an Indian cuisine restaurant in nearby Subic Bay.

Lori was, by all accounts, an excellent hostess. She entertained HARRIS's business colleagues at Boracay Beach and helped arrange Oxford's annual Christmas party, which was attended by up to 400 guests. She also attended dinner meetings with MARK's clients and prospective clients.

"He considered his wife an asset because together, they were an attractive, well-dressed couple," Loo noted. But other than spending money, the judge said, "she took almost no interest in her husband's work or their finances."

In an interview this week, Lori HARRIS said she understood her husband was involved in "venture capital," but didn't know any details. "I knew it was teleMARKeting, but I didn't know the stocks or the names of the companies he was promoting," she said.

n

Oxford had a stable of junior companies that it organized, financed and promoted to retail investors. Among them were ZIASUN Technologies Inc. and Chequemate International Inc.

Both were listed on the OTC Bulletin Board, a trading forum that is virtually unregulated. In fact, prior to 1999, bulletin board companies didn't even have to issue financial statements.

ZIASUN and Chequemate financed their businesses by selling large blocks of stocks to foreign purchasers under a U.S. securities rule known as Regulation S.

Under this rule, issuers can avoid going through the onerous process of a registered stock offering by placing the shares with "accredited investors" outside the country. The condition is that these shares cannot be sold back to U.S. investors for at least a year.

CRAGUN, as an officer and director of ZIASUN and Chequemate, arranged for these companies to sell large blocks of unregistered stock to Oxford and related boiler rooms, which MARKed up the share price and hyped them to investors in foreign jurisdictions.

Problem was, neither Oxford nor its employees were registered to sell stock in Ireland, Switzerland, Australia or any of the others countries where the purchasers were located. Also, the companies were long on puffery and short on substance, which made them exceedingly risky investments.

According to a June 2002 article in the St. Louis Post-Dispatch, one of Oxford's clients was Australian rancher Wally Peart. Starting in 1994, he bought seven stocks from Oxford, including Chequemate, for a total investment of $130,000 US. Little did he know, but all of the companies had close ties to CRAGUN and associates.

Peart told the newspaper that, on Oxford's advice, he never sold any of the shares, ostensibly to maximize long-term gains. "Everything seemed to work OK, and they often invited me to visit them in Manila," Peart is quoted as saying. "However, in 1999, it all folded and my retirement fund disappeared."

HARRIS rejects the characterization of Oxford as a "boiler room." He said the firm made sure it was licensed in every jurisdiction in which it sold stock. However, when asked if the firm was licensed to sell stock to Australian investors such as Peart, he replied: "I can't answer that question. I don't know exactly."

He also said the companies that Oxford recommended were all legitimate companies and a lot of Oxford clients made money. "I bought IBM and lost a lot of money on it. It's all based on timing," he said.

He also said neither he nor CRAGUN have ever been accused of wrong-doing. CRAGUN told the Wall Street Journal that the U.S. Securities and Exchange Commission spent five years investigating his role in selling Regulation S shares overseas and it "never filed anything against me."

n

A large chunk of money supplied by investors like Peart found its way back to B.C.

The HARRIS's bought the acre of land in Osoyoos and began constructing their mansion. It had seven bathrooms and marble tiling throughout, even in the mechanical and laundry rooms.

They paid $35,000 for chandeliers, $40,000 for a wrought iron staircase and $25,000 for a desk for MARK's home office. In all, they spent $225,000 on furnishings. The total cost was more than $3 million. "It is the most expensive house in Osoyoos," the judge observed.

But the gravy train was coming to a halt. By 1996, Oxford had over 10,000 clients, but according to Loo, the stock MARKet had turned and HARRIS "was forced to deal with unhappy investors."

CRAGUN opened an investment banking business in San Diego and invited HARRIS to join him. In October 1997, MARK and Lori moved to Del Mar, just outside San Diego, and rented a 3,200-square-foot ocean-view home for $4,750 a month. They also bought a Porsche 911 for $96,000 US and a 540 BMW for $65,000 US.

Within a few months, CRAGUN decided he wanted HARRIS to help him support the public companies that he was promoting. So HARRIS incorporated Veritas MARKeting & Communications with offices in Vancouver and Solana Beach, Calif. He commuted back and forth, spending Tuesdays to Friday in Vancouver, and Saturday to Monday in Del Mar.

Veritas provided investor relations services for several companies, including ZIASUN. At its peak, it had 20 employees, but it was not a lucrative enterprise. HARRIS was paid in shares, which initially soared in value, but by the time they became free-trading, the share price had collapsed. ZIASUN, for example, rose to $30, but plunged to 30 cents by the time they were cleared for trading.

In 2001, HARRIS's total income slumped to $10,000, but Lori could not adjust to this new financial reality. As Judge Loo reMARKed: "Her passion for high-end designer fashions continued undeterred." Among the items she bought, over her husband's objections, was an $8,000 full-length mink coat from Saks. The following month, in September 2002, they separated.

"There is no doubt that Ms. HARRIS has a clothes-buying habit," the judge observed.

n

Since their separation, Lori has been living in the Osoyoos mansion, but Judge Loo has ordered that it be sold and net proceeds divided between them. She also ordered MARK to pay $150,000 spousal support in two equal instalments in January 2007 and January 2008.

It is not clear what Lori will do. "Mr. HARRIS has suggested avenues Ms. HARRIS might explore, such as being a veterinary assistant, because she loves animals, or being a personal shopper, because she has exquisite taste and enjoys interacting with people," Loo noted.

However, she added, Lori "has taken no real steps towards finding work or training because she claims she is too emotionally distraught...."

In 2003, MARK returned to Marbella, Spain, to set up offices for another teleMARKeting firm called Global Capital Asset Advisors. At about the same time, he began a common-law relationship with Jonni-Colleen Sissons, then a broker with IPO Capital Corp.

In January 2004, Sissons gave birth to their son in Malaga, Spain, and they have since returned to Vancouver. Sissons is now registered with Northern Securities and MARK is pursing his investors relations business through Skylla Capital.

He refuses to say who his clients are: "I have been advised by my lawyer not to say anything further to you."

dbaines@png.canwest.com

© The Vancouver Sun 2006

Genmed's Harris pleads not guilty in L.A.

2013-03-07 12:48 ET - Street Wire

Also Street Wire (U-EMPM) Empire Post Media Inc
Also Street Wire (U-FROG) FrogAds Inc
Also Street Wire (U-HAIR) Biostem US Corp
Also Street Wire (U-SENZ) Sport Endurance Inc

by Mike Caswell

Mark Harris, the former Vancouver promoter facing criminal charges in the United States for several pump-and-dumps, has pleaded not guilty. He entered the plea in a brief appearance before a judge in Los Angeles on Feb. 27, 2013. The judge then allowed his release on a $700,000 bond, with the conditions to include house arrest. (All figures are in U.S. dollars.)

Prosecutors claim that Mr. Harris, 56, was part of a group of serial market manipulators that generated $30-million in illegal profits from a number of pump-and-dumps. The group secretly took control of OTC Bulletin Board companies and promoted the stocks with false or misleading information. The men then allegedly dumped millions of shares and moved the proceeds from the scheme offshore.

Mr. Harris was initially arrested in Arizona on Feb. 13, 2013, when a pair of indictments against him and 13 others were unsealed in California. The U.S. Marshals Service transported him to Los Angeles, where he remained in custody until he pleaded not guilty last week. After he entered the plea, the judge fixed his bond at $700,000, of which $100,000 his wife Jonni would satisfy and the remainder he and his wife would jointly provide.

ARIZONA REAL ESTATE
Mark Harris's House

The judge also ordered him to remain under house arrest at his home in Arizona, to be enforced by electronic monitoring. He may only leave to drive his son to and from school. Other terms of his release include travel restrictions, avoiding contact with his co-defendants, and submitting to drug and alcohol testing.

The move from jail to home will be a substantial upgrade in accommodations for Mr. Harris. The address listed in his release documents is for a 4,407-square-foot home in Scottsdale, Ariz. According to an old real estate advertisement, the house has five bathrooms, a pool and parking for three cars. The average list price of homes in his ZIP code is $1.55-million.

Fraud charges

The charges against Mr. Harris are detailed in a pair of indictments unsealed in the Central District of California on Feb. 13, 2013. The charges included securities fraud, wire fraud and international promotional money laundering. Prosecutors claimed that Mr. Harris and others ran a pump-and-dump scheme that began around 2009 and continued until at least December, 2012. The promotions, as described in the indictments, all followed a similar pattern: the men took control of an OTC-BB company, promoted it with false or misleading news, and then dumped their shares.

One of the examples prosecutors provided was Genmed Holding Corp., a Dutch company that claimed to be developing generic drugs. The Genmed scheme, as described in the indictment, began in early 2011, when then stock was thinly traded and was around 30 cents. According to prosecutors, the men took control of the company and then arranged a touting campaign that included paid promoters, a celebrity video and mass mailings that overstated the company's revenues.

(The recipients of that promotional money, as listed in the indictment, included a West Vancouver company called Raincity Marketing Group. The indictment did not accuse Raincity of any wrongdoing, but said that it received $165,000 through wire transfers to HSBC Bank Canada.)

As the promotion began, the stock became far more active, trading hundreds of thousands of shares per day, and reaching a 52-cent high. The company issued a news release in which it claimed to have an agreement with a pharmaceutical distributor in Ireland that would see its products sold in several countries.

Part of the promotion, according to prosecutors, was a video news release with a known actor. (Prosecutors did not identify the actor, but one of the other companies in the indictment claimed to have Pamela Anderson pitching its products.) The video shoot was the subject of a string of text messages that Mr. Harris received on March 20, 2011, prosecutors claimed. One text said the video would be distributed on "CNN Bloomberg, msnbc, local tv as well as cable across the nation ... I believe it will [be] a great tool for [the third party stock promotion groups]."

One of Mr. Harris's co-defendants, Grover Nix, had high expectations for the promotion, according to the indictment. In an intercepted conversation he said, "I'm fucking truly excited like a kid at Christmas." In all, prosecutors claim that the men made $2.1-million from the Genmed promotion.

The defendants, in addition to Mr. Harris, are Sherman Mazur, Ari Kaplan, Grover "Colin" Nix, Regis Possino, Edon Moyal, Joseph Davis, Curtis Platt, Dwight Brunoehler, Tarun Mendiratta, Ivano Angelastri, Joseph Scarpello, Julian Spitari, Peter Dunn and William Mackey. Most of the men are from California.

The stocks, in addition to Genmed, were Sport Endurance Inc., Empire Post Media Inc., FrogAds Inc. and Biostem U.S. Corp. None of the companies are named as defendants.

The case is scheduled for a trial by jury starting April 23, 2013.

Prior to Arizona, Mr. Harris lived in Vancouver on and off for many years, holding himself out as an investor relations man. He ran a private firm called Skylla Capital Corp., which operated from an office on Burrard Street. The Vancouver Sun's David Baines reported in 2006 that he had a child with former Northern Securities Inc. broker Jonni-Colleen Sissons.

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Bryant Cragun,
Mid 90's, Philippines
web.archive.org
Boiler Room operator Bryant Cragun and wife Mrs World 2008 Eimee Cragun (The beautiful people)



Harris v. Harris, 2006 BCSC 644 2006-04-21

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Harris v. Harris,



2006 BCSC 644

Date: 20060421

Docket: E042154

Registry: Vancouver

Between:

Lori Lynn Harris

Plaintiff

And

Mark Alan Harris

Defendant

Before: The Honourable Madam Justice Loo

Reasons for Judgment

Counsel for the Plaintiff

G. A. Lang and M. Bjelos

Counsel for the Defendant

S. J. Zukerman

Date and Place of Trial/Hearing:

14-17 November 2005; and

1-3 and 8-10 February 2006



Vancouver, B.C.


[1] After 16 years of marriage, the plaintiff Lori Harris and the defendant Mark Harris separated in September 2002. There are no children of the marriage. Ms. Harris who was 38 years old at separation, did not work during the marriage and has not worked since. She seeks seventy per cent of the net equity in the matrimonial home based on a value of $1.9 million, and lump sum spousal support of $200,000. The legal foundation for her claims is said to be as follows:

1. This is a long marriage.

2. Ms. Harris has no employment skills and was not able to advance her education or work skills during the marriage.

3. Ms. Harris followed her husband from Florida to Spain to Hong Kong to the Philippines and then to California.

4. Ms. Harris has no benefits, no life insurance, no pension, and no future security beyond her share of the family assets.

5. Ms. Harris is unlikely in the short term to achieve self-sufficiency. If Ms. Harris is able to complete a real estate course, she will be part of an industry that is economy driven with a reputation for significant drop-out rates.

6. Mr. Harris' tax-free and off-shore existence will make it difficult for Ms. Harris to rely on monthly periodic payments.

[2] The parties started their married life in 1986 with few, if any, assets. Ten years later, they had over $1 million (U.S.) in a Swiss bank account and lived a fairly luxurious lifestyle. The bank account has dwindled to less than $30,000.

[3] Ms. Harris in her evidence focussed on the lavish lifestyle she once had. Mr. Harris focussed on the rise and fall of his income in telemarketing and investor relations and Ms. Harris' excessive shopping habits. Ms. Harris argues that Mr. Harris is not credible, that he "ran his affairs like one big ball", and that all of his business assets, primarily a brokerage account, should be considered family assets.

Background

[4] The parties were married in Banff, Alberta in May 1986 when Ms. Harris was 22 years old and Mr. Harris was 29.

[5] Ms. Harris was raised in Calgary and has a grade 11 education.

[6] Mr. Harris attended junior high school in Arizona before moving to Calgary. He dropped out of school in grade 11 and went to work in a steel mill. He saved money and travelled for 10 months throughout Asia. When he returned to Canada he took jobs that ranged from truck driving, to working at McDonalds, and selling cars. He was a car salesman when the parties met and married.

1986-1989: Telemarketing in Spain and Hong Kong

[7] Shortly after they were married, Mr. Harris worked as a floor tiler in Florida, but found the work too physically demanding. He began training as a stock broker when a friend offered him a job telemarketing with Indigo Investments in Torremolinos, Spain. The couple had only $500 and no credit. Mr. Harris purchased an airline ticket on his mother’s credit card and gave the $500 to Ms. Harris so that she could travel to Spain ahead of him and stay at a friend’s place. Mr. Harris worked for another six weeks, saved about $2,500, and joined his wife in Spain in October 1986. He immediately began work as a telemarketer persuading prospective clients to purchase stock in companies. He earned $5,000 in his first month.

[8] The couple returned to Calgary for a summer vacation in 1987. Shortly after they returned to Spain, they moved to Marbella, Spain when Mr. Harris became the telemarketing sales manager for Equity Management Services ("EMS"). For his work Mr. Harris received a percentage of the business and a salary of about $10,000 a month. The job ended abruptly after about a year when the payroll failed to materialize. However, EMS' telemarketing team was offered similar work in Hong Kong starting the following week.

[9] Within a few days the parties moved from Spain to Hong Kong and within five months, Mr. Harris' commission income was back up to $10,000 a month. However, eight months later, the Hong Kong Securities and Exchange Commission (SEC) forced the telemarketing operations to shut down. Mr. Harris tried working for a similar operation in Macau but the parties found working and living in Macau extremely uncomfortable. After about a month the parties decided to leave Macau and use their $100,000 in savings and travel.

1989-1990: Travelling and Living off Savings

[10] The parties travelled to the Philippines, Indonesia, Thailand, Europe and London. They returned to Calgary in February 1990 with about $35,000. They spent $20,000 for a 1989 GMC four wheel drive so they could go skiing, and by the summer of 1990, they had used up all of their savings.

1990-1997: Hong Kong and the Philippines

[11] Around August 1990, Bryant Cragun, a former senior vice-president with Goldman Sachs, sought Mr. Harris' assistance in setting up a telemarketing operation in Hong Kong. After borrowing $5,000 from his father the parties moved to Hong Kong in October 1990 and Mr. Harris started work. Just four months later, the Hong Kong SEC caused the telemarketing operations to close.

[12] The parties and Mr. Cragun travelled through Singapore, Jakarta, Bangkok, and the Philippines looking for another jurisdiction in which to live and establish a similar telemarketing operation. Mr. Cragun chose the Philippines where Oxford International Management ("OIM") began operating as a U.S. equity fund manager.

[13] OIM began operations in April 1991, and within four months, Mr. Harris' salary doubled to $10,000 (U.S.) a month, plus a business override and a percentage of the sales he generated. By the end of 1991, Mr. Harris' earnings approached $15,000 a month. By 1993 OIM had grown to fifty employees and Mr. Harris earned over $250,000 (U.S.) annually.

[14] In 1993 Mr. Harris incorporated United Holdings Ltd. (“United Holdings”), an off-shore company, in order to open a joint bank account with Swiss Bank Corp. in Geneva, later the Union Bank of Switzerland (the ”UBS account”). He explained to Ms. Harris about the UBS account and where the UBS account documents were located. The parties are equal shareholders in United Holdings.

[15] By 1995 OIM had offices in Spain, Brussels, Taipei, Indonesia, and Bangkok, and Mr. Harris' earnings were upwards of $500,000 (U.S.) annually.

[16] Other than the occasional modelling job, Ms. Harris did not work. However, she took Spanish lessons in the Philippines for four months, and spent her time shopping, playing tennis, travelling with Mr. Harris, flying to Hong Kong to have her hair done, and looking after the house and staff. The parties had a maid, gardener, part-time carpenter, dog walker, and a driver who drove Mr. Harris to work, and then returned to the house to drive Ms. Harris wherever she wanted to go.

[17] The couple went to Italy for Ms. Harris' birthday each year, and to the Four Seasons Resort in Bali each Christmas. They stayed at some of the world's top hotels and each summer returned to Calgary and the Okanagan to visit their families.

[18] During the beach season from November to April the parties spent their weekends on Boracay Island about an hour and a half from Manila. Mr. Harris bought a boat they could use on the weekends. However, after recognizing the effort involved in pulling the boat in and out of the water every weekend, he started a small aquasports business. Mr. Harris invested approximately $200,000 in boats, jet skis, and other equipment, and built a small beach house upstairs from the aquasports business that had up to five employees. Mr. Harris made no money from the venture. As he stated, it gave them a lot of enjoyment for three or four years, but otherwise, the business lined the pockets of others.

[19] During the beach season, Mr. Harris' business colleagues, most of whom were expatriates, arrived at the beach house on Fridays after work. Ms. Harris was a good hostess and looked after the wine and cheese and other appetizers.

[20] Ms. Harris also helped arrange OIM's annual Christmas party which had as many as 400 people attending. She also helped Mr. Harris entertain at home at least twice a month.

[21] Mr. Harris invested approximately $85,000 in a small restaurant known as Rama Mahal in Subic Bay that Ms. Harris helped decorate. The parties agree that the restaurant is a family asset valued at $30,000 (U.S.) and that it will be retained by Mr. Harris.

[22] Mr. Harris' work included travel, and meeting clients and prospective clients for lunch or dinner. He often brought Ms. Harris along with him at dinners. He considered his wife an asset, because together, they were an attractive, well-dressed couple. Ms. Harris enjoyed the travelling and being able to use her credit cards "freely", but otherwise she took almost no interest in her husband's work or their finances.


The House in Osoyoos

[23] In 1995 the parties purchased from Ms. Harris' step-father, Ted Takacs, one acre of his Osoyoos orchard for $115,000. Their initial plan was to build a 3,000 square foot retirement home for approximately $500,000. Construction started in 1995 and completed in 1996. During that time, the parties lived in the Philippines so most of their directives to the contractor or architect went by fax.

[24] The house grew to 6,000 square feet, with seven bathrooms and marble flooring throughout, including the mechanical and laundry rooms. Ms. Harris had the outdoor dining area copied after the Four Seasons Resort in Bali; chandeliers cost $35,000, and a wrought iron staircase cost $40,000.

[25] In the summer of 1998 the parties began furnishing the house. A desk for Mr. Harris' home office cost $25,000 and Ms. Harris insisted on purchasing five Versace carpets for more than $100,000. Mr. Harris estimated they spent $250,000 furnishing the house. All of it came from their UBS account.

[26] The final cost for constructing and furnishing the house was over $3 million. The house was appraised at $1.7 million in January 2006. This appraisal is the average of an estimated market value of $1.5 million using the direct comparison approach, and $1.9 million using a cost approach.

[27] The comparison approach was based on three comparable sales in the Penticton area because no comparable sales exist in the Osoyoos area. It is the most expensive house in Osoyoos and would likely take months to sell if it were listed for sale.

[28] Ms. Harris testified that she wanted to retain the home but said that she would not remain in Osoyoos but would likely return to California if she does not get the home. In closing argument, Ms. Harris did not seek to retain the home but sought seventy per cent of the net equity in the home based on a value of $1.,9 million.

1997: Del Mar, California

[29] By 1996 OIM had over 10,000 clients, but Mr. Harris was under tremendous pressure as the markets began a downward turn and he was forced to deal with unhappy investors. He needed and wanted a change.

[30] Mr. Cragun was opening an investment banking business in San Diego, and Mr. Harris saw that as an opportunity to expand his knowledge of investment banking. Mr. Harris felt comfortable starting a new life in California and accumulating more wealth. Their UBS account had reached over $1 million (U.S.) and they had paid cash for the house in Osoyoos, although it still had to be furnished.

[31] In October 1997 the couple moved to Del Mar, just outside of San Diego, and rented a 3,200 square foot ocean view home for $4,750 a month.

[32] After Mr. Harris had received two pay cheques for a total of $20,000 (U.S.), around the fall of 1997 Mr. Cragun decided he wanted Mr. Harris to help him support the public companies he had invested in and work in investor relations ("IR") rather than investment banking.

[33] In December 1997 Mr. Harris purchased a 1998 Porsche 911 for $96,000 (U.S.) and in January 1998 he ordered a 1998 540 BMW for $65,000 (U.S.). The money came from their UBS account.

The Osoyoos Vineyard

[34] Sometime in 1998 Mr. Takacs convinced Mr. Harris to become a partner in his vineyard and enter into an option to purchase a portion of his property when it could be subdivided. In the last four years, the parties have spent $350,000 in equipment and grapes for the vineyard, but the venture has gone sideways. The parties have jointly commenced litigation against the Takacs and agreed that they will share equally in any resulting proceeds.

1998-1999: Veritas Communications

[35] In the spring of 1998, Mr. Harris began operating Veritas Communications, an IR firm in Vancouver, and six months later, he also began operating an IR firm in Solana Beach near San Diego. He spent Tuesday to Friday in Vancouver, and Saturday to Monday in Del Mar.

[36] Veritas leased a vehicle for Mr. Harris, and an apartment in Vancouver where he and other Veritas employees stayed when they were in town.

[37] Starting in the summer of 1998 the parties used their house in Osoyoos as a summer home and Mr. Harris continued to commute extensively. The full-time maid that the parties had in the Philippines for seven years came to work in Del Mar and Osoyoos during the summers.

[38] Other than the $20,000 in salary earned in the fall of 1997, and approximately $23,000 which represented a one per cent override on the operations in the Philippines that Mr. Cragun had agreed to pay him for six months following his departure from the Philippines, Mr. Harris received no other income in 1997. The parties lived off their UBS account.

[39] Mr. Harris explained how the IR business works:

Investor relations works like any other business. I go out and find product, stock or companies that are looking to promote their shares, give it more value, more visibility, and they will pay me in either stock or cash for those services. When the stock is given to me its not necessarily my stock; it's stock to be used to generate income to provide marketing services, and if a contract is cancelled, then quite often I will have to send the stock back, because the contracts are over normally three months, six months or a year periods. Once the stock is sold I create income and then I use that income to provide marketing services, telemarketing services, email services, direct mail services, a whole number of ways. I get them listed on foreign exchanges, such as Frankfurt, Berlin, the AIM Exchange in London, which all require costs, and at the end of the day its like running a grocery store. Once I have created the revenue, I spend whatever it takes to get the job done and I anticipate, you know, maintaining at the end of the day at least a 20% profit margin, and if things go well, a 40% margin, and if the stocks or company does exceptionally well and the stock actually goes up dramatically in value, possibly a lot more than that. And then the opposite side: if the stock or company is failing for one reason due to economic conditions or not hitting their financial targets, their stocks go down, and so then my profit margins sometimes completely evaporates. So it's a risky business and to a certain degree a stressful business.

[40] Mr. Harris received no income and drew no salary in 1998 or 1999 as the "war chest" of stock grew and he anticipated recovering a large profit or equity position in the companies Veritas was promoting. At its peak, Veritas had more than 20 employees and monthly overhead of over $100,000. At times the overhead exceeded profit, and Mr. Harris lent the company money to meet its payroll.

[41] Ash Katey is a chartered accountant who looks after a number of IR firms. Mr. Katey's explanation as to how IR firms generally operate is consistent with Mr. Harris' statement:

Q And is there a business model that investor relations people use when conducting their business?

A Well, generally the standard way will be that the investor relations person will receive a lot of shares from either the public company or, more often, from the principal shareholder of public company as an inducement to start working in increasing the price of those shares in the stock market. As the price goes up, then he can sell those shares, receive the cash, pay for the expenses, and it, of course, benefits the principal shareholders who have stock shares in those companies to now get larger sale price for their shares. From the sale price of shares, then they pay their expenses, subcontractor, and all the other things, but almost all the time the remuneration depends on how well the share prices do. If they go down and down and down, they may not have enough money to pay all their expenses. If they go up, they will become rich.

[42] Mr. Harris did not become rich. The shares were almost worthless by the time he was able to trade them. For example, ZiaSun Technologies Inc. traded between $3 and $5 a share when Mr. Harris received several thousand restricted shares as compensation under the terms of an IR contract. The stock went as high as $30. By the time the shares became freetrading in late 1999 they had plunged to $0.30 a share.

[43] When Mr. Cragun retired in 1999, Rory Boyce-Varley, an internet marketing specialist, became Mr. Harris' business partner in Veritas. The financial prospects for 2000 looked promising when Trademex placed a million shares in escrow, and Internet Studios promised two million shares. However, in 2000 things went from bad to worse. Internet marketing started its downward spiral, Trademex was de-listed, and unbeknownst to Mr. Harris, Mr. Boyce-Varley swapped Internet Studios restricted shares for freetrading shares and sold them. Mr. Harris returned from California to find that his partner had cleaned out his office and apartment, and left the country.

[44] In 2000 Mr. Harris' income was only $12,700 plus $85,000 in loan repayments from Veritas. By the end of 2000 the UBS account stood at $631,000.

[45] In early 2001, with tax losses of $888,632, and unpaid payroll taxes of over $10,000, Veritas ceased operations.

[46] Throughout these difficult financial times, Mr. Harris tried to explain to Ms. Harris that they had to live with less, but Ms. Harris refused to listen, and continued with her shopping habits.


2001: IMI Net Media

[47] In 2001 Mr. Harris started IMI Net Media, a small IR company with two employees. It had one or two clients that Mr. Harris hoped would be sufficiently successful so his company could profit.

[48] In March 2001 United Holdings opened a brokerage account with Research Capital, a Canadian brokerage firm which Mr. Harris used to place stock that he received as compensation for his IR work. Unfortunately, the stock market for internet companies was still depressed, and IMI Net Media ceased operating in early 2002 with net losses of $187,338.

[49] Mr. Harris' only income in 2001 was $10,000. By the end of 2001 the parties had spent more than $300,000 of their savings. They could not afford to travel in 2000 or 2001, but Ms. Harris' passion for high-end designer fashions continued undeterred. She spent around $100,000 on clothes and merchandise in 2000 or 2001.

The Separation

[50] The parties separated in September 2002 after 16 years of marriage.

[51] Unable to afford the cost of two homes, Mr. Harris ended the tenancy on the house in Del Mar. The household contents were packed and shipped to their home in Osoyoos. Ms. Harris' statement that she "did it all myself without any help from Mark" is an exaggeration. Mr. Harris paid $20,000 in moving costs that included three men who took two days to pack the household contents. Ms. Harris' mother helped Ms. Harris pack her personal belongings.

[52] Since October 2002, Ms. Harris has resided in Osoyoos.

[53] Daniel Munroe, the landlord of the house in Del Mar, obtained judgment against the parties for $11,600 (U.S.) for the unexpired term of the lease and registered the judgment against the Osoyoos property.

[54] The parties have a joint bank account at the CIBC branch in Osoyoos. At the time of separation their line of credit stood at $59,000. In November 2002 Ms. Harris withdrew $25,500 from the line of credit. She used $6,000 for plastic surgery and the balance for living expenses. In January 2003 Mr. Harris began depositing regular monthly payments of $5,000 (U.S.) a month into the CIBC account. From that Ms. Harris pays $2,370 a month for the mortgage, house insurance, and utilities. In addition to the $60,000 (U.S.), Mr. Harris also pays for the property taxes, Ms. Harris' car insurance and repair costs, the house, pool, and garden maintenance expenses, including the wages and accommodation expenses of the gardener for six months of the year, for a total of close to $100,000 each year since separation. Ms. Harris has also spent an additional $80,000 from the joint line of credit since separation.

2003-2004: Mr. Harris Returns to Work in Spain

[55] In February 2003 Mr. Harris sold the 1998 Porsche for $65,000. On February 17, 2003 he opened a Bank of Montreal account, deposited the $65,000 and transferred $10,000 to pay for the parties’ outstanding debt in their Wells Fargo account in California.

[56] At the beginning of 2003 there was only $127,000 remaining in the UBS account. Due to his lack of financial success in Vancouver, Mr. Harris returned to Marbella, Spain as a United Holdings consultant, to set up offices for Global Asset Advisors. At the same time he began a common law relationship with Jonni Sissons.

[57] Mr. Harris found the work environment in Spain much more difficult and competitive than before. From his 2003 gross revenue of $273,000 that he deposited into the UBS account, roughly $153,000 remained after operating expenses, including office overhead and the salary of three employees. Mr. Harris sent $97,000 to Osoyoos, which included $5,000 (U.S.) per month for spousal support in addition to money for property taxes and house maintenance. That left Mr. Harris with under $60,000 to support himself and Ms. Sissons. He supplemented this amount with $7,000 withdrawn from the UBS account and approximately $40,000 in gains generated in the Research Capital account. That year, Mr. Harris also paid $7,000 in legal fees incurred by Ms. Harris to defend a driving offence.

[58] In 2004, Mr. Harris generated gross revenue of $335,000, out of which he paid operating expenses of $150,000. He again sent $97,000 to Osoyoos, leaving him with about $88,000. He supplemented this amount with $38,000 from the UBS account, reducing its balance to below $100,000. On January 24, 2004, Ms. Sissons gave birth to their son in Malaga, Spain. The cost for hospital care was approximately $25,000, leaving Mr. Harris with about $100,000 to support himself, Ms. Sissons, and their newborn.

[59] In June 2004 Mr. Harris and his new family returned to Canada. He became a Canadian resident on June 27, 2004. Until then, and for most of the marriage, Mr. Harris had been a non-resident. He began working as an IR consultant and using the United Holdings brokerage account Research Capital for his business dealings. In the fall of 2004 he became the sole shareholder of Skylla Capital Corp. and rolled into that company the IR contracts he entered into that year. His income from Skylla from June 2004 to June 2005 before tax amounted to $133,588. His income for the calendar year 2005 is approximately $130,000. He anticipates earning the same income in 2006.

Allegation credibility and allegations of non-disclosure.

[60] A constant and strident theme throughout the trial was that Mr. Harris made late disclosure or failed to disclose. A similar theme was Mr. Harris’ “ability to spin tales” and his lack of credibility. There is no doubt from the manner in which this trial was conducted and from Ms. Harris’ evidence that Ms. Harris sought to establish that Mr. Harris has a greater income and more assets at his disposal than he has disclosed.

[61] I observed Mr. Harris testify for more than four days. He answered the questions as best he could; he was not evasive. If there were any inconsistencies in his answers, they were minor discrepancies that he was able to explain. His evidence regarding his financial affairs was uncontradicted. I was impressed with his ability to recall dates and events and understand and recall voluminous financial records. Although Ms. Harris and her counsel tried to paint a portrait of a man who evades his taxes and bills, hides his assets, and cannot be believed, I find Mr. Harris to be credible. If there is any conflict between the evidence of Ms. Harris and Mr. Harris, I prefer the evidence of Mr. Harris.

[62] Ms. Harris struck me as quite uninterested in Mr. Harris’ business dealings or their finances during the marriage. She resolutely denied knowing anything about their finances, his work, or even why they moved from Spain to Hong Kong or elsewhere. Her answers were generally along the lines of “I had nothing to do with his office things”.

[63] For example, Ms. Harris testified that Mr. Harris told her that he had a Banco Italiano account. She said that they were out for dinner with a Banco Italiano banker and his wife when the banker said that Mr. Harris could not open an account with less than $1 million. Ms. Harris also said that she found the Banco Italiano account number from a printout from Mr. Harris’ Palm Pilot. There is however no Banco Italiano account.

[64] Mr. Harris explained the situation. He said that a UBS bank manager he had been working with left UBS to work for Prime Partners where they had higher capital limits of $1 million. He was interested in Mr. Harris’ business, but Mr. Harris was not interested in changing banks. Similarly, a bank manager at UBS went to work for Banco Italiano. He tried unsuccessfully to encourage Mr. Harris to move his account to Banco Italiano. Mr. Harris told Ms. Harris that they should have just one savings account and that it should remain at UBS.

[65] This is not a case where one spouse has kept details of his or their finances from the other spouse. This is a case where one spouse has repeatedly tried to explain details of their finances, but the other spouse was not interested in listening.

[66] This action was commenced in June 2004. The statement of defence was filed in March 2005. Ms. Harris was not examined for discovery. Mr. Harris was examined for discovery in July 2005. There were no interim applications. In October 2005 Mr. Harris delivered to the lawyer for Ms. Harris four large bankers’ boxes containing Veritas documents, cancelled cheques, GST records, banking records, financial statements, credit card statements, wire transfers, and all of the other document records that Mr. Harris was able to obtain up to that date.

[67] Mr. Harris has made more than reasonable efforts to obtain documents from the Philippines, Spain, Switzerland, California, and every place in the world he has worked or opened a bank or credit card account in the last several years, including documents of the companies that he has worked for. Understandably, it took time to obtain some of the documents. Mr. Harris was unable to obtain other documents, such as OIM's tax filings in the Philippines despite a concerted effort. Almost as soon as Mr. Harris received documents as a consequence of his search, his counsel delivered a supplemental list. Mr. Harris has produced his sixth supplementary list of documents.

[68] Mr. Harris was not examined for discovery on any of the documents contained in the four bankers' boxes. At trial he was taken almost line by line through credit card statements, bank statements, cheques, and financial statements, on the basis that it was necessitated by Mr. Harris' late disclosure. However, the cross-examination failed to shed any light on any assets that Mr. Harris has not otherwise disclosed.

[69] In preparation for trial, Mr. Harris cross-checked hundreds of documents in order to reconcile all of the funds in his Bank of Montreal account. In extensive cross-examination, he was able to state what each cheque was for, the source of the funds, and how to read various banking documents, including UBS account statements. None of his material evidence was contradicted.

The Brokerage Accounts

[70] Ms. Harris alleges that Mr. Harris avoids paying taxes, has an off-shore existence, “ran his affairs like one big ball”, and intermingled his personal and business assets. She therefore contends that all of his business assets, particularly the Research Capital brokerage account, should be considered family assets. Ms. Harris produced various schedules showing large sums of money going in and out of the Research Capital and other accounts. However, I found the schedules alone, without explanation, to be meaningless.

[71] Mr. Harris produced tax returns and financial statements for Veritas, IMI Net Media and Skylla. He said that he filed tax returns in the Philippines and described his unsuccessful efforts to obtain copies of the tax filings made in that country. Based on advice from an accountant in Spain, he understands that he has five years within which to report income.

[72] Mr. Katey testified that Mr. Harris only needed to declare income earned in Canada after June 27, 2004. Mr. Katey helped prepare Mr. Harris’ 2004 personal tax return and Skylla's corporate tax return. Over the course of three meetings between Mr. Harris and Mr. Katey or his assistant, Mr. Katey carefully reviewed and questioned various IR contracts, receipts, banking documents, credit card statements, transfers in and out of the different accounts, including UBS account records, chequebooks, the Research Capital account, and Veritas’ loss of over $800,000, in order to determine to his satisfaction which expenses and items were personal to Mr. Harris and which were business related. Except for one unrelated question, Mr. Katey was not cross-examined. I accept his evidence.

[73] Between February 2002 and August 2005 all of the cheques issued from the Research Capital account totalling close to $174,000 in Canadian funds and $247,000 in U.S. funds went towards IR contract obligations. No funds from any of the parties’ bank accounts, including the UBS account, or another personal bank account, were deposited into the Research Capital account.

[74] While United Holdings was incorporated off-shore, I do not find that Mr. Harris otherwise has an "off-shore existence". I am satisfied that he has made full financial disclosure, and that his current annual income is approximately $130,000. As his counsel asked rhetorically during closing argument: “If Mr. Harris was truly trying to hide his income, why would he deposit his 2003 and 2004 income into the UBS account? Why not open a secret account and deposit monies there?”

[75] Ms. Harris contributed neither directly nor indirectly to the Research Capital account. I am satisfied that the Research Capital account is an excluded business asset and not a family asset.

Ms. Harris' Spending Habits during the Marriage and since separation.

[76] Ms. Harris testified about expensive jewellery Mr. Harris bought during their marriage, her personal shopper, and her ability to buy Versace, Dolce & Gabbana and other expensive designer clothes on sale.

[77] Mr. Harris testified about closets so full of her clothes and shoes that he had little room in a closet for more than one shirt. He complained that she would not listen when he tried to talk to her about their finances, the cost of maintaining two expensive homes, and the need to reduce her spending. Ms. Harris continued to shop and spend as she always had.

[78] In August 2002, shortly before separation, Ms. Harris insisted that Mr. Harris come with her to Saks Fifth Avenue because she wanted an $8,000 full length mink coat. An argument ensued over the coat, and Mr. Harris stormed out knowing that Ms. Harris’ Saks Fifth Avenue credit card was at its maximum limit. Undeterred, Ms. Harris opened another Saks Fifth Avenue account and purchased the coat. The account remains unpaid. When asked about the account, Ms. Harris’ retort was that Mr. Harris has a habit of not paying his accounts.

[79] Ms. Harris swore two Financial Statements. The Financial Statement she swore in November 2005 lists total annual expenses of $218,424 which she describes as her “lifestyle before separation”, including $3,000 a month for clothing, and $537 a month for hair care and cosmetics. The Financial Statement she swore on April 21, 2005 lists total annual expenses of $97,572 or what Ms. Harris describes as her “bare minimum” including $1,000 a month for clothes and $500 a month for hair care and cosmetics.

[80] Mr. Harris argues that Ms. Harris' profligate spending habits contributed only to the depletion of the parties’ assets rather than to the acquisition, preservation or maintenance of the assets.

[81] There is no doubt that Ms. Harris has a clothes buying habit, but it is not the function of this court to delve into the parties’ spending habits during the marriage. Her expensive clothes and jewellery are not considered by the parties to be a family asset but they are a factor that may be taken into account in apportioning the family assets under s. 65(1)(f) of the Family Relations Act, R.S.B.C. 1996, c. 128: see Uchikoshi v. Suzuki, 2004 BCSC 1763 , 2004 BCSC 1763 at ¶ 49-53. In my view this must be so because the credit card debts that were incurred by Ms. Harris prior to separation and up to the triggering event, including the Saks Fifth Avenue credit card debt for the fur coat are agreed to be family debts. It is appropriate to consider the purpose for which family debt was incurred in determining an apportionment of the family assets: Mallen v. Mallen 1992 4034 (BC CA), (1992), 40 R.F.L. (3d) 114 at 117, 65 B.C.L.R. (2d) 241 (C.A.).

The Assets and the Liabilities

[82] A s. 57 declaration was made on April 21, 2005. The parties are entitled to an undivided half interest in the family assets as of that date, subject to any reapportionment.

[83] The family assets, excluding the former matrimonial home, are as follows:

ASSETS

ITEM

VALUE
(CDN Dollars)


RETAINED BY

1998 BMW 840

$24,000.00

Plaintiff

CIBC Account #72-56337

$1,869.31

Plaintiff

Dzigurski Painting

$10,000.00

Plaintiff

Versace carpets

$50,000.00

Plaintiff

1991 BMW 850

$15,000.00

Defendant

1998 Yamaha Scooter

$2,100.00

Defendant

21 Foot SeaRay Boat

$20,000.00

Defendant

CIBC USD Account Term Deposit

$109,973.22

Defendant

UBS Swiss Account

$34,296.00

Defendant

Thai Oil Painting

$10,000.00

Defendant

Persian carpets

$50,000.00

Defendant

Shares in Rama Mahal Restaurant

$34,296.00

Defendant

Other household contents, excluding clothing and jewellery

To be determined by inventory and valuation

Plaintiff and Defendant equally

Value of assets retained

$85,869.31

Plaintiff

Value of assets retained

$275,665.22

Defendant

[84] The family debts are as follows:

DEBTS

ITEM

AMOUNT
(CDN Dollar)


CIBC Mortgage (as of May 19, 2005)

$233,875.00

CIBC Joint Line of Credit

$119,694.50

CCRA owing by Mark Harris

$9,711.00

Property Taxes owing

$4,227.33

Del Mar landlord's judgment

$19,958.11

Taxes payable by Mr. Harris on 2004 income

$17,995.00

Ms. Harris' credit card debt

$42,796.46

Mr. Harris' credit card debt

$29,591.08

TOTAL DEBTS TO BE DIVIDED

$477,848.48

[85] I have not included in the assets the proceeds of the 1986 and 1988 Porsches as Ms. Harris would like because they were sold before the triggering event and the proceeds were used by Ms. Harris or otherwise used for the Osoyoos property for a family purpose.

[86] As I indicated earlier, while I do not include Ms. Harris’ fur coat or jewellery worth approximately $100,000 in the family assets, it is appropriate to consider their value, because they were purchased with family assets and some of the purchases remain a family debt. Mr. Harris’ four brokerage accounts, including the United Holdings account with Research Capital, are excluded business assets. The gross value of these brokerage accounts as of December 31, 2005 was $51,460.36. Finally, while United Holdings is a family asset, the shares currently have no value. Mr. Harris will retain the shares in United Holdings, Veritas, IMI, and Skylla, all of which have no value.


Ms. Harris’ Claim for Reapportionment and Support

[87] Ms. Harris seeks seventy per cent of the net equity of the former matrimonial home based on a value of $1.9 million and $200,000 in lump sum spousal support. Her claim appears to be based primarily on need.

[88] Mr. Harris is willing to pay Ms. Harris one-half the $1.9 million value of the matrimonial home which is $200,000 above the appraised value and lump sum spousal support of $100,000. However he requires time to organize his affairs in order to raise the funds to do so.

[89] The Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), provides:

Objectives of spousal support order

15.2(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[90] The Family Relations Act, R.S.B.C. 1996, c. 128, provides:


Judicial reapportionment on basis of fairness

65(1) If the provisions for division of property between spouses under section 56, Part 6 or their marriage agreement, as the case may be, would be unfair having regard to

(a) the duration of the marriage,

(b) the duration of the period during which the spouses have lived separate and apart,

(c) the date when property was acquired or disposed of,

(d) the extent to which property was acquired by one spouse through inheritance or gift,

(e) the needs of each spouse to become or remain economically independent and self sufficient, or

(f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse,

the Supreme Court, on application, may order that the property covered by section 56, Part 6 or the marriage agreement, as the case may be, be divided into shares fixed by the court.

Obligation to support spouse

89(1) A spouse is responsible and liable for the support and maintenance of the other spouse having regard to the following:

(a) the role of each spouse in their family;

(b) an express or implied agreement between the spouses that one has the responsibility to support and maintain the other;

(c) custodial obligations respecting a child;

(d) the ability and capacity of, and the reasonable efforts made by, either or both spouses to support themselves;

(e) economic circumstances.

(2) Except as provided in subsection (1), a spouse or former spouse is required to be self sufficient in relation to the other spouse or former spouse.

[91] Under s. 65 of the Family Relations Act, it is necessary to determine whether an equal division of the assets would be unfair.

[92] The duration of the marriage was 16 years which by itself would tend towards equality of division (see S.B.M. v. N.M. 2003 BCCA 300 , (2003), 14 B.C.L.R. (4th) 90, 2003 BCCA 300 at ¶ 23). The parties have been apart for three and a half years. During this time Ms. Harris has been supported by Mr. Harris. She recognizes that she is required to become self-sufficient, but her conduct indicates otherwise.

[93] Ms. Harris was 38 years old when the parties separated in September 2002. Other than working as a receptionist for four months before the marriage, and the occasional modelling assignment during the marriage, she has no work history. While Ms. Harris says that Mr. Harris never asked her to work during the marriage, he encouraged her to work at OIM’s offices in the Philippines when she frequently said that she was bored. When she expressed an interest in importing furniture from Bali to the Okanagan, he set up a company and a bank account for her, but that is as far as it went. There is no evidence that Ms. Harris wanted to advance her education or work skills during the marriage. Nonetheless, I accept that during the marriage, both parties assumed that there was no necessity for Ms. Harris to work or further her education.

[94] In February 2003 Mr. Harris offered to pay for Ms. Harris to take various aptitude and interest tests through the Women’s Resource Centre at UBC to help her determine what work she might be suited for or interested in. She has refused his offer.

[95] Mr. Harris has suggested avenues Ms. Harris might explore, such as being a veterinary assistant, because she loves animals, or being a personal shopper, because she has exquisite taste and enjoys interacting with people. He has offered to pay for any training programs that would assist her in becoming self-sufficient. Instead she has taken no real steps towards finding work or training because she claims she is too emotionally distraught from moving and unpacking in 2002, not knowing where Mr. Harris was at times, and learning about his girlfriend.

[96] While there is no doubt that Ms. Harris was distraught over the break up of the marriage, there is no medical evidence that she is physically or emotionally unable to take at least some steps towards becoming economically independent. She has no child care obligations. I recognize it will be more challenging for her to become self-sufficient at this point in her life than it would have been had she not met and married Mr. Harris. However it could also be said that given her education and work history, she has been economically advantaged by the marriage and its breakdown.

[97] Having considered the applicable factors enumerated, I do not find that an equal division of the assets would be unfair.

[98] Ms. Harris is entitled to one-half of the net value of the matrimonial home remaining after payment of the family debts. The home is appraised at $1.7 million. For the purpose of equalizing the family assets, I fix the value of the home at $1.9 million. Mr. Harris will have ninety days within which to pay Ms. Harris one-half of the net value of the home after payment of the family debts based on a value of $1.9 million. Ms. Harris shall deliver vacant possession to Mr. Harris within sixty days of her counsel's receipt of written notification that the buyout will proceed. In the event that Mr. Harris is not able to purchase Ms. Harris' interest, the home shall be listed for sale with joint conduct of sale, with liberty to either party to apply to court for directions regarding the sale.

[99] While the standard of living during marriage is a relevant consideration in determining spousal support, Mr. Harris is not required to fund the lifestyle to which Ms. Harris became accustomed to during the marriage. Spousal support is affected by the paying spouse’s ability to pay. The parties’ earn-and-spend lifestyle was contingent: Mr. Harris rode the internet marketing wave and crashed with it. They spent beyond their means.

[100] Since their separation, Mr. Harris has paid $5,000 (U.S.) a month in spousal support and in addition, he has paid for maintenance of the Osoyoos property, property taxes, Ms. Harris' car insurance, and gardener’s wages. His total annual support of nearly $100,000 for the past three years exceeds fifty per cent of his annual income, well in excess of the Spousal Support Guidelines. In addition, Ms. Harris has used and increased the line of credit by approximately $60,000. The time has come where Ms. Harris must learn how to live with less, and how to earn a living on her own.

[101] I award Ms. Harris spousal support of $150,000 to be paid in two equal installments on January 1, 2007 and January 1, 2008.

[102] Ms. Harris requested payment by Mr. Harris of fees for her to take a real estate course. She has "looked into" being a realtor because a girlfriend has two real estate franchises. I decline to make this award, because I see no reasonable prospect of Ms. Harris taking the course and remaining in B.C.

Conclusion

[103] In conclusion:

1. The parties will retain the family assets as set out at paragraph 83.

2. Ms. Harris is entitled to one-half of the net value of the matrimonial home set at $1.9 million, after payment of the family debts set out at paragraph 84. Mr. Harris will have ninety days within which to pay Ms. Harris her share of the asset. Ms. Harris shall deliver vacant possession to Mr. Harris within sixty days of her counsel's receipt of written notification that the buyout will proceed. In the event that Mr. Harris is not able to purchase Ms. Harris' interest, the home shall be listed for sale with joint conduct of sale, with liberty to either party to apply to court for directions regarding the sale.

3. Ms. Harris will receive spousal support of $150,000 to be paid in two equal installments on January 1, 2007 and January 1, 2008.

4. The divorce order is granted.

5. Mr. Harris was largely successful and is entitled to seventy-five per cent of his costs.

“L.A. Loo, J.”
The Honourable Madam Justice L.A. Loo

=============================================================
Aaron Elstein crappy and dishonest reporter formerly of the Wall Street Journal
Could have stopped Bryant Craguns scam early on. Instead wrote Truthseeker in another Tussel type stories.
Wall Street Journal booted him. Now works for Crains


Aaron Elstein Title Senior reporter<!--Department Senior Reporters--> Email aelstein@crainsnewyork.com Covers Wall Street and banking

Part of Lynn W. Briggs Boiler Room Loot

Legal Notice Notice is hereby given pursuant to the requirements of Utah Cod... Legal Notice Notice is hereby given pursuant to the requirements of Utah Code Annotated 25-6-14 that on September 6, 2013, Lynn W. Briggs residing at 5870 S Holladay Blvd., Salt Lake City, Utah 84121 created an Asset Protection Trust of which Jason Briggs of 4049 S. Highland Drive, Salt Lake City, Utah 84124 is the Trustee. On September 12, 2013 he transferred to such trust cash of $10,000, certain short term promissory notes with principal amounts that aggregate $1,162,880 and bear interest of 12%-18% per annum, but that were in default of interest owed. In addition, he transferred 1,000,000 shares of a privately held Turks and Caicos company, Clavo Rico, Ltd., 1,000,000 shares of common stock of Great Basin Scientific, Inc., a privately held Utah corporation, and a 60% equity interest in Legends Capital Group, LLC, a Utah limited liability company. Creditors of Lynn W. Briggs are required to present claims within 120 days of the first publication hereof or are forever barred from making claims regarding the assets transferred to the trust. 913278 UPAXLP

utahlegals.com

U.S. needs an anti-SLAPP law like California's

August 16, 2015, 1:00 p.m.
touch.latimes.com

It's a sadly familiar sight in courthouses around the country: A deep-pocketed corporation, developer or government official files a lawsuit whose real purpose is to silence a critic, punish a whistleblower or win a commercial dispute. That's why California enacted a law in 1992 to give people a preemptive legal strike against frivolous lawsuits that seek to muzzle them on public issues. This sort of safeguard doesn't exist in almost two dozen other states or in federal law, unfortunately, but a group of tech-friendly lawmakers is trying to change that.

Although the lawsuits in question can assert many different types of claims, including defamation and unlawful interference, the legal profession knows them as "strategic lawsuits against public participation," or SLAPPs. Twenty-eight states have enacted anti-SLAPP laws that offer varying degrees of protection against such abuse, with California's widely considered the broadest. It works this way: When someone is hit with a lawsuit that feels like a SLAPP, he or she can quickly file a motion to strike. The court then puts the original lawsuit on hold while determining whether the person was, in fact, being sued for exercising free-speech rights, petitioning the government or speaking in a public forum on "an issue of public interest." If so, the court will toss out the lawsuit unless the plaintiff can show that the claims are legitimate and likely to succeed at trial. To guard against abusive anti-SLAPP motions, the side that loses such a case has to pay the other side's legal fees.

California's law has survived numerous challenges over the years, prompting those with sketchy claims to take them to states with weaker laws or to file their cases in federal court. A good example is the City of Inglewood's legal action against a resident who published videos on YouTube blasting Mayor James T. Butts Jr. Rather than suing the resident, Joseph Teixeira, in state court, where the lawsuit would be subject to an anti-SLAPP motion, the city sued him in federal court for infringing the city's copyrights by copying snippets of the official videos taken of the City Council's public meetings.

Efforts to create a federal anti-SLAPP law started at least six years ago, but this year marks the first time that a sizable and bipartisan group is backing such a bill. One impetus is the growing number of SLAPPs aimed at Web-based businesses that provide a forum for the public to discuss, rate and criticize the world around them. The proposal — HR 2304 by Rep. Blake Farenthold (R-Texas) — has at least two dozen cosponsors. Borrowing heavily from California's law and a similar statute in Texas, the bill would allow people sued in federal court or in states with little protection against SLAPPs to have a federal judge dismiss frivolous claims based on speech "made in connection with an official proceeding or about a matter of public concern." The bill, which would leave in place strong state laws such as California's, strikes a reasonable balance between the competing interests involved, and lawmakers should move it forward.

Follow the Opinion section on Twitter @latimesopinion and Facebook

touch.latimes.com

======================================================
Meet an empowered woman

OH YES, IT'S JOHNNY By Johnny Litton | Updated March 31, 2012 - 12:00am

At the ribbon cutting are Teogenes and Genoveva Edralin, Fr. Artemio Labita, Eimee, John and Camella Cragun with Melba Colanse

A woman of beauty and substance, Mrs. Philippines World 2008 Eimee Cragun continues to inspire many with her different roles — as a loving daughter, devoted wife and mother, and dedicated philanthropist. From time to time, this charming lady makes it a point to show her parents Teogenes and Genoveva Edralin her love and gratitude by celebrating their special days with joyful gatherings with family and friends. Eimee, the wife of Bryant Cragun, is a doting mother to her beautiful children Oshin, John Bryant and Camella. She spends quality time with her brood by bonding with them as they tour beautiful places in the Philippines and abroad. Aside from attending important gatherings and cause-worthy events, Eimee gives back to the community by being actively involved in various philanthropic projects, one of which is the Jecob Foundation where she is the president. The organization’s advocacies are education for less-privileged children and charitable missions which include its relief operations for the people affected by typhoon Sendong in Cagayan de Oro. In recognition of her unwavering dedication and selfless efforts in making a great difference in the community, this remarkable woman was honored with a 2009 Power of Feminism Award (International Philanthropic Service) by UNESCO.




**Not A Penis Or Vagina On Ziasuns Web Site**

"Anthony Tobin told Technology Post last year that the company no longer ran sex-related businesses. Instead, ZiaSun has latched on to other Web trends."

Spirit of co-operation rules in Web business
From the SOUTH CHINA MORNING POST

scmp.com

Monday January 25 2000
Spirit of co-operation rules in Web business

At first glance, there was nothing unusual about the Capital Growth Report when it arrived in Backspace's snail-mail box. Of equal parts financial jargon and hype, the report - which charges US$78 for a year's subscription to what appeared to be four badly laid-out pages per month - seemed a typical tech-stock newsletter.
What made Backspace choke on his morning coffee was the pick of the month: an obscure public Internet company called ZiaSun Technologies. ZiaSun was known as Momentum Internet when it was based in Hong Kong. Three years ago, a magazine called The Dataphile revealed that Momentum was behind a stable of porn Web sites and phone chat lines that promised Bangkok Babes and China Dolls. Thousands of spam messages advertising these services were sent from Momentum's free e-mail service.
While not admitting the spamming, Momentum and now ZiaSun president Anthony Tobin told Technology Post last year that the company no longer ran sex-related businesses. Instead, ZiaSun has latched on to other Web trends. It has an Asian search engine, a stock-trading portal, a financial news service, an advertising network and an auction site called AsiaForSale. It moved to San Diego in 1998 when it began trading over the counter in the US, while keeping most Web operations in Asia, mainly in Hong Kong and Manila.
While the company claims to be profitable on modest revenues - $9 million in the second quarter last year - it has been
criticised by day traders and investors in the US, who have tried to puncture those claims. Mr Tobin had ZiaSun respond by suing several day-trading and investment sites for alleged defamation.

While ZiaSun likes to hype its Web sites - 45 press releases last year - it doesn't appear to be making much money. Most of ZiaSun's revenues came from two off-line subsidiaries, a Philippine-based printing business called Momentum Asia and a US learn-how-to-day-trade seminar which charges $3,995 a head, according to Mr Tobin.

So Backspace was puzzled why the editor of Capital Growth Report would hold such an optimistic view of ZiaSun's
prospects. 'The company has a dominant position in the exploding Asian Internet market . . . We expect that ZiaSun
stock will soon be valued with that of profitable peers such as CMGI, now trading in the [US]$80 range.' A visit to Capital Growth's site (www.capitalg.com) shows it is designed and maintained by Momentum Internet and that Capital Growth offers ZiaSun's Swiftrade stock-trading service to subscribers. Isn't co-operation and alliance-building among Web companies heartening?

scmp.com

business.scmp.com.


Pamela Anderson duped into promoting company named in massive $30million stock fraud
By Daily Mail Reporter

Published: 19:58 EST, 15 February 2013 | Updated: 09:51 EST, 16 February 2013



Actors Pamela Anderson and Eric Roberts were the unwitting promoters of a massive stock manipulation scam defrauding 20,000 investors out of $30 million dollars.

Federal authorities have arrested 14 people for their part in the fraud, that used offshore accounts and shell entities with names like 'Dojo,' 'Picasso' and 'Big Dog.'

Among those arrested was FrogAds.com CEO Julian Spitari.

Scroll down for video


Duped: Pamela Anderson appeared in a promotion video for FrogAds, a company investors were fraudulently inflating the value of to pocket millions


Mastermind: FrogAds.com founder & CEO Julian Spitari, seen with Anderson at a press conference for the company, was among those arrested in the far-reaching fraud

Anderson appeared in a short video promoting FrogAds, which claimed to operate an online board for classified advertisements.

'These folks were very sophisticated,' André Birotte Jr, U.S. attorney for the Central District of California, told KPCC.

Birotte said Anderson had no idea that the company was involved in fraud.

Like Anderson, Roberts appeared in a short video for a company called Genmed, which claimed to 'develop, manufacture and distribute generic pharmaceuticals,' according to the U.S. attorney. Like Anderson, Roberts had no idea the company was connected to the fraud.

The arrests followed two grand jury indictments.

According to court records, the FBI and IRS busted the case using wiretaps that intercepted roughly 60,000 phone calls and 24,000 text messages.


Unwitting: Prosecutors say Anderson had no idea she was being used by master stock manipulators

Briotte said the defendants would lie about investment opportunities in small companies in sectors like e-commerce and biotech, where stocks can suddenly soar based on innovations.

'They were also to co-opt companies,' he said. 'And give the appearance that they were legit.'

He added that the defendants, from Southern California, Arizona, and Florida, were practiced hands at such manipulation.

'This was not their first time at the rodeo,' Briotte said.

FrogAds, Genmed, and a number of other companies that trade on over-the-counter markets were named in the indictments. Such companies can't meet the standards of stock exchanges like the NYSE and NASDAQ, and so are sold on informal networks called 'Pink Sheets.'

To manipulate markets, the group would buy up all of one company's stock then, using elaborate fraud, try and convince investors the company had incredible growth prospects.

They would issue fake press releases, promotion videos, and trade stocks between themselves to inflate the value.


Pitchman: Eric Roberts was also convinced to promote a company for the stock swindlers

They would also pay analysts to promote the stock and extract the profits.

In the case of FrogAds alone, they took $7 million in profits, much of which was hidden in offshore accounts.

Authorities claim the scheme's masterminds were Los Angeles men Sherman Mazur, 63, and Regis Possino, 65.

Mazur and Possino face life sentences if convicted while lower-ranking scammers could be sentenced to 100 years.

'This was a nefarious scheme,' Birotte said. 'The case is important because [what the defendants are accused of] rubs against fundamental rules of the securities markets. Investors need to be careful. But the defendants created information that wasn't true'

=================================================================
Brent Baker former SEC attorney in Utah

Investors lost millions and millions of dollars because of his non action to stop the Ziasun Boiler Room crooks.

Left SEC and and now defends Career Swindlers and Ponzi Schemers for a living.

In Brents spare time currently portrays himself as a anti fraud advocate in the press.


Pothetic!!

Then there is career conman and boiler room operator Jack W Flader Jr

=============================================================================

On-Line Trading Gathers Momentum

Momentum Campaigns Ltd, a Hong Kong-based Internet corporate marketing specialist, has entered into a strategic partnership to create, promote and maintain an on-line US stocks trading system for a major Californian stockbroking house.

The 'US Invest' trading system from Pacific Continental Securities Corporation (PCS) will give Asian and European investors a direct link to US stock markets, allowing users to trade effortlessly via the Internet.

"There were several firms in the US, particularly California, pitching for the business, plus three or four from Hong Kong," Momentum director Jack W Flader, Jr, said. "At the end of the day, it was a combination of our traditional marketing background and expertise, coupled with thorough product knowledge, that gave us the advantage."

Momentum's responsibilities will include ongoing promotional activities and content development of the 'US Invest' website, which will provide industry news, market research and tips from financial experts, as well as live stock prices and access to brokers to answer clients' questions and give on-line advice.

"The site will include any material we find that we think will be of direct interest to users," technical director Graham Daley said. "Hopefully to keep users coming back for more."

'US Invest' at www.usinvest.com became fully operational mid-February 1997. Pacific Continental Securities will be opening an office in Hong Kong later in the year
.

============================================================

Special thanks to tha Greatest Investigative Journalist from the Wall Street Journal.

If not for John Emshwiller the bad guys would have gotten away with it




Beyond the SEC's Reach, Firms Sell Obscure Issues to Foreign Investors

By
John R. Emshwiller and
Christopher Cooper
Staff Reporters of The Wall Street Journal


Updated Aug. 16, 2000 5:51 p.m. ET

The call couldn't have been timed better. Adrian Lawlor, a Dublin computer-systems salesman, and his wife had just received a $17,000 settlement from a car accident his wife had been in when a broker from International Asset Management in Brussels rang him up. Speaking with an American accent, the broker told Mr. Lawlor he had just the ticket for entering the red-hot U.S. stock market.

"They said they had a wonderful investment opportunity for me," Mr. Lawlor says.

Although "absolutely green" when it came to stocks, Mr. Lawlor decided to sink most of the settlement into the broker's recommendations. That was in 1996, and he was happy for a time and unruffled when his broker moved from Brussels to Barcelona, Spain. But then he tried to sell some shares of a small-cap issue that had begun to stumble. The broker said he would make the sale only if Mr. Lawlor agreed to plow the proceeds -- and $10,000 more -- into shares of a tiny California company called ZiaSun Technologies Inc.

A Matter for the PoliceMr. Lawlor refused and then complained to Spanish regulators. Though the brokerage was based in Barcelona, Spanish regulators said they had no jurisdiction because IAM apparently didn't sell to Spaniards. "If you consider this situation a matter of fraud," Spanish regulators wrote, "the normal procedure is to get in touch with the police."

Instead of calling the police, Mr. Lawlor managed to sell some shares "by complaining bitterly to my broker." But still, he hasn't been able to unload his biggest holding, a stake in a troubled start-up that he bought for $6,000 and that is now worth about $90. He has lost contact with his IAM broker, who went by the name Steve Young.

"An Irish citizen buying U.S. stocks through a dealer based in Spain," Mr. Lawlor says. "The whole experience made me realize how alone I was."

Alone in a growing crowd, that is. Nurtured by economic liberalization and the steady rise in U.S. markets over the past decade, legions of Europeans and Asians have developed a strong appetite for stock investments. Much of the focus is on the U.S.; in just the 12 months ended March 31, foreigners bought $2.8 trillion worth of U.S. shares, up 65% from the previous 12 months, the U.S. Treasury says. After accounting for stock sales, net foreign purchases totaled $159.6 billion during the period. About 85% of that was from Europe.

Many Affiliates, Many NamesBut as the global investor base broadens, a big problem has arisen: Investors are often venturing into a gray area that national regulators are either unable or unwilling to police. And that makes them particularly vulnerable to the likes of International Asset Management. This outfit and its many affiliates operating under many names throughout Europe and East Asia buy shares in small, obscure U.S. companies, some linked to IAM through equity or other ties, and then sell the stock to foreigners who often are ill-informed about the companies they are investing in, the difficulty of trading the stock and their own lack of regulatory protection.

IAM officials turned down repeated requests for interviews and have refused to identify the precise location of their Barcelona offices.

In recent years, investors from Athens to Australia have purchased millions of dollars of stock in U.S. companies from IAM and its affiliates. Many, like Mr. Lawlor, have found themselves unable to sell their shares or even get stock certificates, and nearly all are unable to get help from regulators.

Sudden DisappearanceGuy Fletchere-Davies, a 62-year-old carpet manufacturer in Melbourne, Australia, bought ZiaSun and other small U.S. stocks over several years from the Manila office of Oxford International Management, a brokerage firm with ties to IAM. Mr. Fletchere-Davies says his account was passed around among several Oxford salespeople and then to a successor firm. Late last year, "suddenly, the phone calls stopped and paperwork dried up," he says.

The Australian has since embarked on a frantic telephone journey from Manila to Jakarta to Manhattan to the British Virgin Islands in hopes of learning the fate of the nearly $150,000 that was to be his retirement nest egg. "We don't know who to talk to,'' he says. "We don't know where to go."

Nikolas Morokutti, a 26-year-old owner of a computer business in Innsbruck, Austria, thought he knew where to go when he had trouble getting his ZiaSun share certificates from IAM. He called the U.S. Securities and Exchange Commission. The agency, he says, told him that it couldn't help because the shares were issued under Regulation S.

These Regulation S stock sales are allowed under a 10-year-old provision of U.S. securities law that is intended to allow American public companies to raise capital from experienced foreign investors without the onerous registration process required to sell stock in the U.S. Once sold abroad, Regulation S shares cannot legally be resold to U.S. investors for at least a year; they can, however, be sold to other foreigners during that period.

While hundreds of perfectly legal and legitimate S-share transactions occur each year, unscrupulous operators have found a way to exploit Regulation S to their advantage. The way it often works, a promoter that is at least nominally based outside the U.S. buys large blocks of S shares from American issuers at deep discounts and then sells them at huge markups to neophyte investors abroad.

The SEC doesn't comment on specific cases and won't comment on the current state of Regulation S. Non-U.S. regulators aren't much help either, though they periodically warn citizens to avoid boiler-room brokers operating outside of their home country. British stock regulators recently noted a sharp rise in the number of boiler rooms in continental Europe that target English residents. "The firms are not registered here, so it's up to our counterparts in other nations to regulate them, which is very frustrating," says Sarah Modlock of Britain's Financial Services Authority.

A Lot in CommonOver the past few years, IAM and related brokerage firms have marketed shares in about a dozen small U.S. companies. Overseas customers of IAM's offices in Barcelona often receive a monthly publication called "The Capital Growth Report," which mixes glowing reviews of the small companies in IAM's stable with commentary about well-known companies such as Compaq Corp. Several of the small companies have held stock in each other, used the same investor-relations firm or employed Jones, Jensen & Co., a Salt Lake City accounting firm, which is auditor of ZiaSun, a company that looms large in IAM's pitches.

In May, the SEC filed administrative charges against the accounting firm's two named partners, R. Gordon Jones and Mark F. Jensen, for "recklessly violating professional accounting and auditing standards" in an audit of a company unrelated to ZiaSun. Mr. Jensen denies wrongdoing. Mr. Jones didn't return phone calls.

The tale of IAM and its affiliates is deeply entwined with that of ZiaSun, based in Solana Beach, Calif., just north of San Diego, in a modest ground-floor office suite nestled between a freeway and the sea. An IAM affiliate has an address on the same floor of a Hong Kong office building as ZiaSun's office in that city, and ZiaSun maintains the Web sites of IAM and of some of its affiliates.

ZiaSun has operated under various names since it was founded and went public in 1996, and it has engaged in businesses ranging from motorcycles to soda dispensers. In news releases, it now bills itself as "a leading Internet technology holding company focused on international investor education and e-commerce." About 85% of ZiaSun's 1999 revenue came from a business that operates traveling seminars on Internet stock trading for $2,995 a pop. "You Can Become a Millionaire on Regular Pay," says one seminar flier.

In an April 1999 news release, ZiaSun said its 1998 audited earnings totaled $1.15 million, on $3.5 million in revenue. When the company filed financial results with the SEC last September, the audited 1998 sales had dropped to $2.3 million. In a later SEC filing, ZiaSun again revised downward its 1998 sales, to $760,529, and cut net income to $769,320. ZiaSun earnings included profits from securities transactions involving other public companies. Some of ZiaSun's securities holdings include companies that also issue large amounts of Regulation S stock and whose shares have been sold by IAM and affiliates.

ZiaSun officials decline to be interviewed, citing a pending lawsuit filed by ZiaSun in federal court in San Francisco against a group of Internet critics of the company for allegedly mounting a "cybersmear campaign" against ZiaSun. In a written statement in response to written questions, ZiaSun officials say they are "fully committed to preserving and developing the shareholders' equity."

More than half of ZiaSun's own 27 million shares outstanding have been sold to foreigners under Regulation S, according to the company's SEC filings. In two transactions in 1997, ZiaSun sold 15 million shares at 10 cents a share under Regulation S to foreign investors, whose identities didn't have to be disclosed in public records. At about the same time, investors in Europe and Asia say they received calls from salesmen from IAM and related brokerages offering ZiaSun stock at $4.50 or more a share. In the U.S. during the same period, ZiaSun, under previous corporate names, was trading on the Nasdaq Bulletin Board at between $1.25 and $5.50 a share on average daily volume of several thousand shares.

Vladimir Kaplan, a Zurich doctor, bought some of those ZiaSun S shares. His Barcelona-based IAM broker, Lynn Briggs, offered ZiaSun at $4.50 a share on Oct. 7, 1998 -- when the stock was trading in the U.S. for between $2.50 and $4 a share. Unable at the time to independently determine ZiaSun's stock price, Dr. Kaplan bought nearly 8,000 shares to start, and more over the ensuing weeks. Dr. Kaplan knew his broker as a senior portfolio manager at IAM and trusted his judgment, especially after Mr. Briggs flew to Zurich to make a personal sales call. What he says he didn't know: According to SEC filings, Mr. Briggs also was one of ZiaSun's founders. Mr. Briggs couldn't be located for comment.

Tapping Overseas Buyers Titan Motorcycle Co., a Phoenix, Ariz., motorcycle manufacturer, is another favorite of IAM brokers. Between 1996 and 1998, Titan issued about 5.3 million shares of Regulations S securities in chunks to unidentified overseas buyers for an average price of $1.32 a share, even as clients such as Dr. Kaplan were purchasing stock in the company for far more. According to SEC filings, about a third of the company's total shares outstanding have been sold to foreigners.

Titan officials didn't return calls. In a brief written statement, Titan Chief Executive Frank Keery said that all company Regulation S sales "were conducted precisely as required by law." Titan's "knowledge of subsequent resale activities is essentially nil as these resales take place exclusively outside the U.S.A.," he added.

ZiaSun and Titan have something in common besides IAM. Bryant Cragun, a former president and chief executive of ZiaSun and now a consultant to the company, describes himself in court documents as "investment adviser and fund-raiser" for ZiaSun, Titan and other small companies whose shares are sold by IAM and related brokerages. He co-owns four Titan motorcycle dealerships.

Several investors say their brokers referred to Mr. Cragun as a senior official of IAM. Stefan Van Rooyen, a Swiss investor, says he was told by his Barcelona-based broker in June that Mr. Cragun was IAM's president. A recent SEC filing shows IAM has the same U.S. address as Mr. Cragun, at a gated condominium project in Solana Beach, not far from ZiaSun's headquarters.

In a letter, Mr. Cragun says he was never an IAM officer. He says he leases the condominium in Solana Beach. He acknowledges that between 1991 and 1997, he was chairman of Oxford International, a Philippine brokerage firm that markets many of the stocks IAM touts and that, according to SEC filings, has bought Regulation S shares in two such companies.

Mr. Cragun says the SEC spent five years investigating his role in selling Regulation S shares overseas and "never filed anything against me." An SEC spokesman declines to comment. An offering statement for an overseas investment fund founded by Mr. Cragun says he has a U.S. securities broker's license. The National Association of Securities Dealers says its records show that Mr. Cragun hasn't held a license since 1988. Mr. Cragun, in a written response, says that putting his license status in the present tense was a "typographical error."

Mr. Cragun says he sold his interest in Oxford in 1997 to a company headed by William Strong, who shows up as an account representative on monthly statements received by several IAM customers. Mr. Strong, who says he was merely an IAM consultant, confirms that he bought Oxford. He says IAM and Oxford are "essentially the same company. They are two different entities in the same arena with the same people."

In an April filing, Titan said it issued 724,638 shares of Regulation S stock early this year to Oxford International in connection with a 1996 loan. As Oxford's owner, Mr. Strong says he never received any of the stock (doing so could violate Regulation S, since he's an American). Titan officials didn't respond to questions on this matter.

No Outward SignsIn Barcelona, IAM has in the past shared offices, telephones and personnel with at least three other brokerage firms -- including one owned for at least a time by Mr. Strong. But the exact location of IAM's current office is a mystery. A phone receptionist provides only a mailing address. That address leads to a small office building that has no identifying signs and that on three visits during business hours was locked and dark. Another location, often cited on IAM's correspondence, is an unmarked and rundown suite of offices in an unfashionable part of town staffed by a woman who appears to run a phone service for dozens of companies. A woman who answered the phone at the firm's Manila office said all sales operations had ceased.

Several investors say their brokers, though hard to locate, have recently been pushing them to exchange stock in ZiaSun and other companies for shares in a British Virgin Islands-registered mutual fund called the Morgan Fund. Mr. Fletchere-Davies says he agreed to move his money into the Morgan Fund as an alternative to losing a large chunk of his investment in individual stocks, though he says he has been told he might not be able to cash out of the fund for at least several months.

A Morgan Fund brochure shows that Mr. Cragun, the former ZiaSun executive and former Oxford owner, is one of the fund's two directors. Mr. Cragun says he set up the fund because buying companies' shares directly "is way too much risk to individual investors."

Write to John R. Emshwiller at john.emschwiller@wsj.com and Christopher Cooper at christopher.cooper@wsj.com

=====================================================================

marycumminsrealestatemarycummins.blogspot.com
Sunday, April 14, 2013

Francois Goelo indicted for securities fraud - I outed, reported this guy for many years to SEC, FBI

Francois Goelo is an infamous stock promoter who's been indicted for securities fraud by the SEC. Rumor has it he fled France in a sailboat and went to the Cayman Islands. I outed his touts and reported him to the SEC and FBI. He was a wanted man could still be.

Below are some articles about his crimes.

https://www.sec.gov/litigation/complaints/comp18088.htm

Francois Goelo and the others appealed the court ruling and lost

http://www.ca6.uscourts.gov/opinions.pdf/13a0094p-06.pdf

Francois Goelo was so vile that he once posted to me on RangingBull that he would slice part of my husband's body off slice by slice. He would make the most revolting threats safely in hiding in the Cayman Islands.

Around 2004 or so he tried to become a Cayman Island citizen. A friend in the Cayman Islands sent me the mandatory newspaper ad they had to post to become a citizen. Below are the three ads for Francois Goelo, his girlfriend Ana Belloso Canto and their daughter Anaick Goelo. All of us faxed letters stating why he should never become a citizen. We included his lengthy record for using the Caymans to commit crimes. He's still there so obviously the Cayman Islands like criminals.

Francois Goelo, George Town, Grand Cayman Island, sec, indicted, securities fraud, theft,


Red Bay Yacht Club 1300 South Sound Road Cayman Islands Map
Flag of Cayman Islands: Francois Goelo lives in Cayman Islands Cayman Islands
345-947-1902

fax 345-947-1140

Box 10910 Grand Cayman Ky 1-1007 Map
Flag of Cayman Islands: Francois Goelo lives in Cayman Islands Cayman Islands
345-949-8467



His daughter was a lawyer and now runs a fitness club.

Cayman Islands Law School
Queen’s University of Belfast Certificate in Cayman Law (with commendation)
2002 – 2003
Cayman Islands Law School
University of Liverpool Bachelor of Laws (Honours)
1999 – 2002

Associate
Charles Adams Ritchie & Duckworth
2005 – Present (11 years)
Anaick is an associate with particular experience in property law, including residential and commercial conveyancing. She regularly acts for clients selling, purchasing, financing or leasing real estate in the Cayman Islands. Anaick is a Notary Public and member of the Cayman Islands Law Society and the Caymanian Bar Association.

Francois' last SI post was 2002.

To: Anthony@Pacific who started this subject 7/21/2002 3:57:16 PM
From: Francois Goelo Read Replies (1037)
79096
of 120733

>>> Still Shorting OMC....

in spite of the fact I am vacationing in Europe for a few weeks and I sincerely hope that you are too, as I see $15.00 as a likely target in the medium term...

JMHO, F. Goelo + + +

How can the SEC say they don't know his birth date or where he lives? He owns two parcels of land in the Cayman Islands here.

FRANCOIS GOELO Block 24B Parcel 110 (CE12-0107) (CE) .

He didn't get a permit for construction. He's in the commercial fishing business.

3. 4 FRANCOIS GOELO Block 24B Parcel 110 (CE12-0107) (CE)
Illegal reconstruction of a concrete structure and a commercial fishing operation.
FACTS
Location Trophy Crescent Prospect
Zoning HDR
Parcel Size 0.2985 acres
Current Use As noted
BACKGROUND
Information received is that the structure will be a commercial ice house. An ice
machine will be placed on top of the structure to make the ice which is evident by
the rebar for the uprights and on the ground photographed.
Recommendation: Authorize the issuance of an Enforcement Notice in
accordance with Section 18 of the Development and Planning Law (2011
Revisions).
PLANNING DEPARTMENT ANALYSIS
As a result of checking the Department’s records it was discovered that no
planning permission had been sought for the re-construction of the concrete
structures and the commercial fishing operation, which is in breach of the
Development and Planning Law (2011 Revision).

http://www.planning.gov.ky/HTML_BODY/CP/CP_Library/CPA_Minutes/2012/Acpa1712.pdf

Seems Francois Goelo is also an inventor and has a patent.

Contact business owner: Frank (Francois) Goelo at frank@sea-gems.net
By phone: 925-4773.
Vessels location: 83 Trophy Crescent, Patrick's Island, Cayman Island.

https://www.google.com/maps/place/83+Trophy+Cres,+Patricks+Island,+Cayman+Islands/@19.2938515,-81.3295845,724m/data=!3m2!1e3!4b1!4m2!3m1!1s0x8f258897a22e1e7f:0xf24713730ceb6659

A yellow house on the opposite side of the canal from Harbour House marina.
Directions: Up Marina drive to last road on right (Bamboo drive),
Then 1st left on Omega drive and 1st left again on Trophy Crescent road to the yellow house with a blue concrete fence.

His website

http://sea-gems.net/about

He also sells used cars? He has a permit for that in the Caymans.

FRANCOIS GOELO T/A FRANKS GEMS TB1325R 857080/14 Used Cars Retail Retailer for a business with 800sq ft or less of selling area Block 13EH, 83HS, Unit # 5, 57 Bodden Road,
George Town, Grand Cayman.
13-May-2014 13-May-2015

There are photos of Francois Goelo online. How can the SEC say they don't know his age? His daughter was about 20 in 2000 so she was born about 1980. That means he was probably born 1950-1955. Per the SEC the girlfriend Ana Belloso Canto was also involved in his stock fraud. She held shares in her name. Based on data I believe Francois Goelo is from Paris, France. His girlfriend is from Alicante, Spain.

Francois Goelo, Anaick Goelo, Ana Goelo, cayman islands, securities fraud, criminal, stock market, scammer, stock promoter, pump and dump, evil, vile, sevu, ziasun, wanted, warrant,

Francois Goelo, Anaick Goelo, Ana Goelo, cayman islands, securities fraud, criminal, stock market, scammer, stock promoter, pump and dump, evil, vile, sevu, ziasun, wanted, warrant,

Francois Goelo, Anaick Goelo, Ana Goelo, cayman islands, securities fraud, criminal, stock market, scammer, stock promoter, pump and dump, evil, vile, sevu, ziasun, wanted, warrant,

Francois Goelo, Anaick Goelo, Ana Goelo, cayman islands, securities fraud, criminal, stock market, scammer, stock promoter, pump and dump, evil, vile, sevu, ziasun, wanted, warrant,


Francois Goelo, Anaick Goelo, Ana Goelo, cayman islands, securities fraud, criminal, stock market, scammer, stock promoter, pump and dump, evil, vile, sevu, ziasun, wanted, warrant,


Dr. Dennis Jay and Mrs. Mary Jay v. Francois Goelo et al.
Mar 02 1994
Dr. Dennis Jay and Mrs. Mary Jay vs. Francois Goelo et al. - Grand Court of the Cayman Islands

Sector: Litigation
Jurisdiction: Cayman Islands
Mar 02 1994

Francois Goelo was represented by an attorney in the lawsuit and appeal. They know where he is. He's right in the middle of this pic next to his wife. The fishing business, home, law school education all paid by stolen dirty money. Francois Goelo is so revolting that he threatens to kill people for speaking the truth about scammy stocks. Such a lovely person.

Goelo represented himself in the answer to the complaint. That's pretty easy to do. I just pulled up Francois Goelo's deposition in the SEC lawsuit against him. They took his depo at the Cayman Islands in May 24, 2004.

http://marycummins.com/francois%20goelo%20deposition.pdf

He stated he is a citizen of France and the Cayman Islands. As of 2005 he lived in the Caymans 16 years. That means he'd lived in the Caymans since 1989. He stated Ana Belloso Canto is his wife. His daughter was born 1983. He owns companies Xplorer and Unikay Ltd. He owns catamaran designs.

Goelo states his emails were hacked. He said he was stupid to post in his own name. It was a mistake. Goelo said he used holding company Xplorer to hold shares. He didn't want his name to show up as insider because shorters like Elgindy would short the companies to nothing.

He put shares in his girlfriend's name so he wouldn't go over 1,000,000 shares or 5%. He did it so his name would not show up. I think not filing a disclaimer is the main charge against him. He supposedly filed a complaint with NASDAQ who told him to get his trading account out of there. Goelo states he split his shares between two holding companies so his name would not show as a 5% + owner on SEC docs. It appears Goelo posted his "DD" on the stocks on the message boards.

He has a very selective memory. He doesn't remember what he did, what he wrote, what he bought or sold. He has no problem remembering what everyone else did in great detail ;-) He talks about losing $600,000 on one deal, making $250,000 on another. Why then does he run a used car retail store and fishing company in the Caymans? Cover?

Goelo states he doesn't know much about shells ;-) He also stated he didn't post anything on message boards about Blue Point. He thought it wouldn't be ethical as he owned so many shares. He said he just did the dd, sent it to others who posted it on message boards ;-)

Francois said he retired at age 31. He had a home remodeling business in Australia. He retired in 1977. His age would then be 1946. My guess of 1950 was close. After he retired he spent seven years sailing. He came to the Caymans October 1987 as a condo developer. He started trading in 1999. In 1968 he was in Tours University in France but didn't finish. He sued a company called TRIM for not delivering shares. He sued a guy in Texas for not returning his deposit on a boat. He said he was never charged with or convicted of any crime.

He was accused of not disclaiming how many shares he had. His "excuse" is he gave 200,000 to his girlfriend, wife. She didn't have a trading account so the shares were in his account ;-) He just knew in his mind they were his shares.

Francois Goelo lost. He was found guilty and forced to disgorge

GRANTS a disgorgement order against Goelo in the amount of $216,861.00 plus
$81,251.00 in prejudgment interest;

(1) GRANTS Summary Judgment against Tsai, Markow, Global Guarantee, Yang, K & J
Consulting, Lou, M & M, and Goelo on Count I, liability for violating Section 5 of the
Securities Act;
(2) GRANTS Summary Judgment against Tsai, Markow, Global Guarantee, Yang, K & J
Consulting, Lou, M & M , and Goelo on Count VIII, liability for violating Section
13(d)(1) and Rule 13d-1(a) thereunder;
(3) GRANTS Summary Judgment against Markow, Global Guarantee, Yang, K & J
Consulting, Lou, M & M , and Goelo on Count VIII, liability for violating Section
13(d)(2) and Rule 13d-2(a) thereunder;
(4) GRANTS Summary Judgment against Tsai, Markow, Global Guarantee, Yang, K & J
Consulting, Lou, M & M , and Goelo on Count IX, liability for violating Section 16(a)
and Rule 16a-3 thereunder;
(12) GRANTS a permanent injunction against Markow, Global Guarantee, Yang, K & J
Consulting, and Goelo, permanently enjoining and restraining them and their officers,
agents, servants, employees, attorneys and all persons in active concert or participation
with him who receive actual notice of this Order by personal service or otherwise,
from violating, directly or indirectly, Sections 5(a) and 5(c) of the Securities Act [15
U.S.C. §§ 77e(a) and 77e(c)], Sections 13(d)(1), 13(d)(2), and 16(a) of the Exchange
Act [15 U.S.C. §§ 78m(d)(1), 78m(d)(2) and 78p(a)] and Rules 13d-1, 13d-2, and
16a-3 thereunder [17 C.F.R. §§ 240.13d-1(a), 240.13d-2(a), and 240.16a-3].
A date for trial on Counts II, III, IV, and VI (the Anti-Fraud Provision Claims), will be set by a
forthcoming scheduling order.

Goelo appealed and lost.

SEC then dismissed II, III and IV. Goelo had to instantly pay $300,000 which was $220,000 disgorgement of profit and interest on that amount. Slap on the wrist. At least the SEC didn't buy his silly "those are my girlfriend's shares" lie.

http://www.sec.gov/litigation/complaints/comp18088.htm

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

--------------------------------------------------------------------------------

UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,

Plaintiff,

v.

SIERRA BROKERAGE SERVICES, INC.,
RICHARD GEIGER, JEFFREY A. RICHARDSON,
AARON TSAI, MICHAEL M. MARKOW,
GLOBAL GUARANTEE CORPORATION,
FRANCOIS GOELO, YONGZHI YANG,
K&J CONSULTING, LIMITED, KE LUO,
M&M MANAGEMENT, LIMITED,
JEROME B. ARMSTRONG,

Defendants.

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CIVIL ACTION
CASE NO.

COMPLAINT FOR PERMANENT INJUNCTION
AND OTHER EQUITABLE RELIEF

Plaintiff United States Securities & Exchange Commission ("Commission") alleges as follows:

SUMMARY

1. The Commission brings this civil action against eight individuals and four entities for their conduct between April 1999 and July 2000 relating to the price manipulation, unregistered sales, unreported stock ownership and touting of securities issued by BluePoint Linux Software Corporation ("BluePoint"), a U.S. corporation formerly named MAS Acquisition XI Corporation ("MAS").

2. Aaron Tsai ("Tsai") formed MAS as a shell corporation in 1996. From then through August 1999, Tsai purported to transfer ownership of many of MAS`s outstanding shares of common stock to approximately thirty shareholders. These transfers were shams; the shareholders were nominees, and Tsai retained control of the stock during all relevant times. Tsai`s intent was to create the appearance that the nominee shares could later be sold without limitation and without a registration statement in effect with the Commission.

3. From late 1999 through early 2000, Tsai, Michael Markow and his company, Global Guarantee Corporation (collectively, "Markow"), Francois Goelo ("Goelo"), and Yongzhi Yang and his company, K&J Consulting, Ltd. (collectively, "Yang"), arranged for MAS to acquire a Chinese company that purportedly had developed a Chinese version of the Linux computer operating system. Upon the acquisition in February 2000, the Chinese Linux company became a subsidiary of MAS, which changed its name to BluePoint.

4. Markow, Goelo, Yang, and Ke Luo, and his company, M&M Management, Ltd. (collectively, "Luo"), placed 3.75 million shares they bought from Tsai in their names, the names of entities they controlled, and the names of their relatives.

5. Sierra Brokerage Services, Inc. ("Sierra"), its president, Jeffrey Richardson ("Richardson") and its trader, Richard Geiger ("Geiger") (collectively, the "Broker-dealer

Defendants") participated in the scheme to manipulate the price of BluePoint shares.

6. At all relevant times, Markow, Goelo, Yang and Luo (collectively, the "Promoter Defendants") acted as a group and controlled a vast majority of the free-trading shares, or float, of BluePoint in order to manipulate the price of BluePoint shares. When BluePoint stock began trading publicly on March 6, 2000, the Broker-dealer Defendants facilitated the scheme by creating artificial trading activity in BluePoint stock that enabled the Promoter Defendants to complete the scheme. The Promoter Defendants and Broker-dealer Defendants engaged in trading of BluePoint shares at artificially high prices that were hundreds of times more than what the Promoter Defendants had paid for less than three weeks earlier.

7. Tsai made false filings with the Commission when he failed to disclose his true ownership of the shares and the subsequent sale of those shares to the Promoter Defendants. Although the Promoter Defendants had collectively acquired nearly 20% of BluePoint`s 20 million outstanding shares and over 90% of the publicly traded shares, they never reported their ownership to the Commission in any filing as required under the federal securities laws.

8. On March 6, 2000 and after, Jerome Armstrong ("Armstrong") promoted BluePoint on the Raging Bull internet site, which carried hundreds of posts about BluePoint. Armstrong received undisclosed compensation from Markow and Goelo in return for his posts.

9. In the weeks and months after BluePoint started trading, BluePoint`s price and volume steadily declined from its all-time high of $21. Nonetheless, the Promoter Defendants continued to sell at a profit, having paid Tsai only pennies for their shares. The Promoter Defendants never reported any changes in ownership when they sold their BluePoint shares in any filings with the Commission.

10. Tsai, directly and indirectly, has engaged and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute violations of the registration provisions of the federal securities laws, specifically, Section 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§77e(a) and 77e(c)] and Sections 13(d)(1) and 16(a) of the Exchange Act [15 U.S.C. §§78m(d)(1) and 78p(a)] and Rules 13d-1(a) and 16a-3 [17 C.F.R. §240.16a-3] thereunder.

11. Markow, directly and indirectly, has engaged and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute violations of the anti-fraud provisions of the federal securities laws, specifically, Section 17(a) of the Securities Act [15 U.S.C. §77q(a)], Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §78j(b)], and Rule 10b-5 [17 C.F.R. §240.10b-5] thereunder; or in the alternative, Markow has engaged and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute aiding and abetting the other promoter`s violations of the anti-fraud provisions of the federal securities laws, specifically, Section 17(a) of the Securities Act [15 U.S.C. §77q(a)], Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §78j(b)], and Rule 10b-5 [17 C.F.R. §240.10b-5] thereunder.

12. Goelo, Yang, Luo, and the Broker-dealer Defendants, directly and indirectly, have engaged and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute violations of the anti-fraud provisions of the federal securities laws, specifically, Section 17(a) of the Securities Act [15 U.S.C. §77q(a)], Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §78j(b)], and Rule 10b-5 [17 C.F.R. §240.10b-5] thereunder.

13. The Promoter Defendants, directly and indirectly, have engaged and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute violations of the anti-fraud provisions of the federal securities laws, specifically, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §77q(a)], and Sections 13(d)(1), 13(d)(2), and 16(a) of the Exchange Act [15 U.S.C. §§78j(b), 78m(d)(1), 78m(d)(2) and 78p(a)] and Rules 13d-1(a), 13d-2(a), and 16a-3 [17 C.F.R. §§240.10b-5, 240.13d-1(a), 240.13d-2(a), and 240.16a-3] thereunder.

14. Sierra, directly and indirectly, has engaged and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute violations of the broker-dealer anti-fraud provisions of the federal securities laws, specifically Section 15(c)(1) of the Exchange Act [15 U.S.C. §78o(c)(1)]. Geiger and Richardson, directly and indirectly, have engaged and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute aiding and abetting violations of the broker-dealer anti-fraud provisions of the federal securities laws, specifically, Section 15(c)(1) of the Exchange Act [15 U.S.C. §78o(c)(1)].

15. Armstrong, directly and indirectly, has engaged and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute violations of the touting provisions of the federal securities laws, specifically, Section 17(b) of the Securities Act [15 U.S.C. §77q(b)].

JURISDICTION AND VENUE

16. The Court has jurisdiction over this action pursuant to Section 22(a) of the Securities Act [15 U.S.C. §77v(a)], Sections 21(e) and 27 of the Exchange Act [15 U.S.C. §§78u(e) and 78aa] and 28 U.S.C. §1331. Venue is proper in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. §77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §78aa].

17. The transactions, acts, practices, and courses of business constituting the violations alleged herein occurred within the jurisdiction of the United States District Court for the Southern District of Ohio and elsewhere.

18. Defendants, directly and indirectly, made use of the means and instrumentalities of interstate commerce and of the mails in connection with the transactions, acts, practices, and courses of business alleged in this Complaint.

DEFENDANTS

19. Aaron Tsai, age 33, resides in Evansville, Indiana. Tsai formed MAS in October 1996. From October 1996 through at least February 2000, he was the chairman, president, and treasurer of MAS. During this same time period, Tsai formed nearly fifty "blank check" public shell corporations, including MAS. From 1998 through 2000, Tsai was also a registered representative for three securities firms.

Promoter Defendants

20. Michael Markow, age 56, resides in Westlake Village, California. At all relevant times, he controlled Global Guarantee Corporation as the president and chief executive officer of the company. He was employed as a registered representative for four different securities firms before 1993. In 1998, California issued "desist-and-refrain" orders against him for operating an unlicensed broker-dealer and for selling securities that had not been "qualified." Alabama issued a cease-and-desist order against him in 2000 for operating an unregistered broker-dealer.

21. Global Guarantee Corporation ("Global Guarantee") is a California corporation that Michael Markow formed in 1992 and controlled throughout the relevant times. Michael Markow used Global Guarantee to acquire and sell BluePoint stock. At all relevant times, acts of this entity were caused solely by Michael Markow.

22. Francois Goelo, age unknown, resides in the Cayman Islands. Goelo`s citizenship is unknown.

23. Yongzhi Yang, age 44, resides in Irvine, California. At all relevant times, he controlled K&J Consulting, Ltd. as the president of the company. He was born in China but is a U.S. citizen. From 1994 through 1999, he was a college professor in the U.S. Since then, he has been a self-employed business consultant. At all relevant times, he was a consultant for the Chinese Linux company, and then continued to be a consultant for MAS after it acquired the Chinese Linux company and changed its name to BluePoint.

24. K&J Consulting Ltd. ("K&J") is a British Virgin Islands entity organized and controlled by Yongzhi Yang. Yongzhi Yang formed K&J in January 2000. Yongzhi Yang used K&J to acquire and sell BluePoint stock. At all relevant times, acts of this entity were caused solely by Yongzhi Yang.

25. Ke Luo, age 44, resides in Jamaica Plain, Massachusetts. At all relevant times, he controlled M&M Management, Ltd. as the president of the company. He is a citizen of the People`s Republic of China. From 1992 through 1998, he was a student in the United States, and during 1998-99, he was employed as a research scientist at a university in Alabama.

26. M&M Management Ltd. ("M&M") is a British Virgin Islands entity organized and controlled by Ke Luo. Ke Luo formed M&M in February 1999. Ke Luo used M&M to acquire and sell BluePoint stock. At all relevant times, acts of this entity were caused solely by Ke Luo.

Broker-Dealer Defendants

27. Sierra is a broker-dealer located in Columbus, Ohio that has been registered with the Commission since 1994. Sierra is a small, one-office operation that conducted a general securities business in listed and over-the-counter securities and made a market in many bulletin board stocks. During all relevant times in the Complaint, Sierra was a market maker in BluePoint. On March 7, 2003, the NASD gave Sierra notice of its intention to expel the firm from membership for failure to pay a fine. Since November 2002, Sierra has not been operating for failure to meet net capital requirements under the federal securities laws. On October 8, 2002, the Commission instituted an unrelated administrative and cease-and-desist proceedings against Sierra`s Chairman, who was also CEO and part-owner, in a matter involving a fraudulent, unregistered offering of securities in an unregistered hedge fund. In 1998, 2000 and 2002, Sierra was censured and fined by the National Association of Securities Dealers ("NASD") three times for various violations of NASD regulations, including, failure to timely report transactions, failure to correctly memorialize the time of execution of transactions, failure to memorialize the time of entry and time of execution of transactions, and failure to establish, maintain and enforce written supervisory procedures regarding trading and market making activities.

28. Geiger, age 48, resides in Morton, Illinois. During the relevant time period, Geiger was employed as a registered representative and trader at Sierra. In July 2002, the NASD fined Geiger $10,000 and suspended him from association with any NASD member for twenty days for conducting transactions at Sierra as an equity trader without being registered. In January 1997, the NASD censured Geiger, fined him $10,000, suspended him for ten days, and barred him from acting as a securities firm principal for one year. Geiger had acted as an unregistered principal of a member firm, allowed another individual to work at the firm without the required registration, and failed to properly report transactions and prepare trade confirmations. Based on the NASD action, the state of Ohio refused to grant Geiger a securities sales license, and Geiger worked for Sierra out of his home in Illinois during the times alleged in the Complaint.

29. Richardson, age 44, resides in Columbus Ohio. Richardson is the president of Sierra, its head trader, and a part-owner of the firm. He supervised Geiger and authorized all of Geiger`s trades in BluePoint during all relevant times. In July 2002, the NASD censured Richardson and fined him $10,000 (jointly and severally with Sierra) for allowing Geiger and another Sierra employee to function as equity traders without being registered to do so. In June 2000, Richardson was fined $5,000 by the NASD for various violations at Sierra, including, its failure to timely report transactions, failure to correctly memorialize the time of execution of transactions, failure to memorialize the time of entry and time of execution of transactions, and failure to establish, maintain and enforce written supervisory procedures regarding trading and market making activities.

Touting Defendant

30. Armstrong, age 39, resides in Seaside, Oregon. Since early 2000, his only source of income has been from stock market investing.

OTHER RELEVANT NON-DEEFENDANT ENTITIES

31. MAS was formed by Tsai in 1996 as a blank check Indiana shell corporation. In April 1999, Tsai caused MAS to become a voluntary reporting company by registering its class of common stock under Section 12(g) of the Exchange Act by filing a Form 10-SB with the Commission. In February 2000, MAS acquired BluePoint Linux Software Company, and changed its name to BluePoint upon the acquisition.

32. BluePoint Linux Software Company was a Chinese entity that marketed a Chinese version of the Linux computer operating system, an alternative to Microsoft`s Windows program. As a result of being acquired by MAS, it became BluePoint Linux Software Corporation or BluePoint. Aside from a December 2000 Form S-8 involving common stock to be awarded to certain employees as part of an employee benefit plan, BluePoint has never filed a registration statement under the Securities Act. BluePoint stock currently trades on the OTC Bulletin Board around $0.10.

THE FRAUDULENT SCHEME

The Start of the Scheme

33. When Tsai formed MAS in October 1996, he was its chairman, president, and treasurer, and he caused MAS to issue him 8.5 million shares of common stock. MAS was a shell with minimal assets, and its express purpose was to merge with a private entity looking to establish a public trading market for its shares.

34. In several Commission filings made in 1999, Tsai falsely represented that he and MAS had transferred thousands of MAS shares to dozens of individuals during 1997 and 1998 in order to conceal his true ownership and control of the shares and to make it appear that the shares could be later sold without a registration statement in effect. More specifically, Tsai falsely reported in these filings that in January 1997 he gifted 50,000 of his own shares to each of five former directors, for a total of 250,000 shares, and that MAS issued a total of 500 shares in January 1997 and a total of 750 shares in September 1998 to former directors as compensation for services in 1997 and 1998. Tsai subsequently fabricated documents which showed that the former directors transferred most of their 250,000 shares supposedly gifted by Tsai in January 1997 to roughly thirty other individuals in August 1999.

35. The two January 1997 transfers and the September 1998 transfer were shams since the purported directors rendered no services for MAS and never knew they supposedly were directors. Tsai never told the purported directors they received shares in MAS from him or the company, or that the 250,000 shares they supposedly collectively received from Tsai in January 1997 were later transferred to others.

36. In fact, at all relevant times, the "directors" and other "shareholders" were nominees, and Tsai controlled the stock they supposedly owned. Tsai duped the nominees into signing one or more blank stock powers, which Tsai kept and later used to further the scheme.

The Promoter Defendants` Initial Involvement in the Scheme

37. On February 17, 2000, after MAS acquired the Chinese Linux company and changed its name to BluePoint, the total outstanding shares of BluePoint stood at 20 million shares. Of the 20 million shares, approximately 16 million shares were restricted. The Chinese Linux company`s founders held 15.5 million restricted shares, and Tsai held 450,000 restricted shares. This left roughly 4 million shares in the float. On the same day, the Promoter Defendants obtained 3.75 million shares, or over 90% of the supposed unrestricted shares, from Tsai. Tsai sold the nominees` shares to the Promoter Defendants through the stock powers he obtained earlier in 1997 and 1998, and he never told the nominees about the stock sale.

38. Markow facilitated the transfer of the 3.75 million BluePoint shares from Tsai to the other Promoter Defendants. Through Markow, the Promoter Defendants paid Tsai $250,000 for the shares while Markow paid the nominees each $100 to make it look like he and the other Promoter Defendants were buying from shareholders rather than Tsai. The Promoter Defendants never reported their acquisition of 90% of the free-trading shares of BluePoint, and Tsai never reported the sale of the nominees` shares which he effectively controlled to the Promoter Defendants.

Distribution of BluePoint Shares to the Promoter Defendants and
Preparation to Trade

39. Markow and Goelo knew that they were required to report their control of BluePoint stock in a Commission filing and actively took steps in an unsuccessful attempt to evade the reporting requirement. Markow was careful to cause the 3.75 million shares to be assigned to fourteen separate holders, with no single holder assigned more than 2.5% of BluePoint`s outstanding stock.

40. Out of the 20 million total shares of BluePoint outstanding, the promoters had collectively acquired 18.75% (3.75 million shares). They held or directly controlled 15.45% (3,090,000 shares), and Yang at least partially controlled an additional 3.3% (660,000 shares) held by him, K&J, his spouse and in-laws.

41. Of the 3.75 million shares controlled by the Promoter Defendants, Markow caused a total of 2.6 million BluePoint shares to be issued in the names of the Promoter Defendants and entities they controlled. Markow also caused another 590,000 shares to be placed in the names of the spouses of Yang (220,000 shares) and Luo (220,000 shares), and Luo`s minor child (150,000 shares). The remaining shares (560,000) were placed in the names of Yang`s mother, father-in-law, and mother-in-law. The shares initially assigned to Yang`s mother (120,000) were soon transferred to Yang, and he had at least partial control of the shares held by his in-laws and spouse. The shares assigned to Luo`s child were soon transferred to Luo, and he controlled the shares held by his spouse.

42. The Promoter Defendants concealed from the investing public that they controlled the float of BluePoint, that they planned to manipulate the BluePoint market, and that they had paid only pennies for their shares. In addition, Markow never reported the "desist-and-refrain" orders issued against him by the state of California in 1998 in any BluePoint filing with the Commission.

43. Around the time of the acquisition, Markow, Goelo, Yang, and Luo worked together as a group to arrange for BluePoint to trade publicly by lining up market makers for BluePoint shares, communicating frequently amongst each other, and transferring a majority of the BluePoint shares held by the Promoter Defendants to Sierra.

44. During this same time, Markow also recruited Sierra and other brokerage firms to act as market makers for BluePoint.

45. Three days before trading began in early March, Markow wrote to Yang and Goelo as follows: "WE CAN TRADE ON MONDAY. EVERYTHING IS FINE. LET`S HAVE A CONFERENCE CALL SHORTLY."

The Manipulative Trading Activity on March 6, 2000
Domination and Control of the BluePoint Market

46. By March 6, 2000, the Promoter Defendants had placed 2.43 million BluePoint shares in Sierra accounts they controlled. That day, BluePoint began trading on the OTC Bulletin Board.

47. On March 6, 2000, the Promoter Defendants and Broker-Dealer Defendants maintained control of BluePoint`s float and exercised domination and control of the market in BluePoint shares. The initial BluePoint trades all involved Sierra, Goelo, Yang, and Luo. Specifically, in the first eleven minutes of trading, the following transactions occurred:

Acting for Sierra`s account, Geiger bought 100,000 shares from Yang at $6 per share. Sierra reported the purchase to the Nasdaq system as four separate blocks of 25,000 shares each.

Geiger (on behalf of Sierra) sold 40,000 of the Yang shares for $6.02 per share to Goelo, who already owned nearly a million shares.

Geiger (on behalf of Sierra) bought one block of 50,000 shares each from Yang and Luo at $6.50 per share.
48. These transactions were artificially structured by the Promoter Defendants acting in concert and were executed at literally hundreds of times the price that the Promoter Defendants had paid just weeks earlier.

49. Geiger resold another 40,000 of the first 100,000 Yang shares to Geiger`s wife, his mother, Richardson, and John McCamey ("McCamey") of Sierra. Each buyer got 10,000 shares at $6.1275 per share.

50. At 9:58 a.m., sixteen minutes after the first trade, Sierra sold 5,000 shares of BluePoint at $7.1875 per share to a Sierra customer, who was advised by Markow to buy BluePoint. Markow arranged this trade in advance with Geiger.

51. At 10:22 a.m., forty minutes after the first trade, Geiger bought another 20,000 shares for Sierra from Luo at $15 per share. Sierra`s bid was then 200 shares at $11 per share.

52. By 10:28 a.m., BluePoint had traded at its high for the day, $21 per share.

53. After the first eleven minutes, Sierra began reselling the shares it bought from Yang and Luo to other broker-dealers. In just over half an hour between 9:54 a.m. and 10:31 a.m., Sierra sold 59,700 shares at prices starting at $7.125 per share and ending at $20 per share. By 1:00 p.m., Sierra had sold 103,700 shares at prices as high as $21 per share.

54. BluePoint`s total trading volume on March 6 was 1.15 million shares. Sierra`s trading accounted for 44% of the volume, and the market maker with the next highest volume had just 8%.

Price Leadership by Sierra

55. Throughout the day, the Broker-dealer Defendants demonstrated price leadership

of the BluePoint shares. During this sell-off, Sierra dominated other market makers. For much of the morning, only Sierra consistently offered BluePoint for sale. From the first trade at 9:42 a.m. until 10:06 a.m., Sierra was the only market maker quoting an ask. During that time, Geiger raised Sierra`s ask from $7 to $10.

56. From 10:06 a.m. until 10:17 a.m., only one other market maker quoted an ask.

57. From 10:17 a.m. through 11:18 a.m., other market makers frequently quoted a bid but no ask, while Sierra always quoted both prices.

58. Geiger also ensured the Sierra led the bid, although it bought little from other broker-dealers. Between the market open and 10:47 a.m., Sierra`s bid (entered by Geiger) went from $3 to $19. Yet Sierra did not buy BluePoint from another broker-dealer until 10:51 a.m.

59. Sierra`s bid leadership occurred when over half the float was in Sierra accounts and over 90% of it was held by the promoters or their relatives. For the day, Sierra had the exclusive high bid 59% of the time, and shared the high bid with one or more other broker-dealers 16% of the time. Sierra also raised its bid ten times to match or exceed the high bid. Yet for the day, Sierra bought only 5,400 shares from other broker-dealers.

60. Sierra bid and bought aggressively (from Yang and Luo) in the absence of arms-length retail demand for BluePoint from Sierra customers. Every retail customer to whom Sierra sold BluePoint on March 6, with the exception of one person, was either one of the promoters, a Sierra employee, a relative of Geiger, someone whose account Geiger set up specifically to trade in BluePoint, or someone with ties to Markow. Because Sierra had purchased enough shares of BluePoint from Yang and Luo in the first eleven minutes to satisfy the total retail customer demand on March 6, Sierra had no legitimate reason to raise the bid throughout the day.

61. Likewise, Sierra had purchased enough shares to satisfy demand from other broker-dealers and had no legitimate reason to raise the bid throughout the day on March 6.

62. Geiger and Richardson knew they could immediately resell 80,000 shares to Sierra customers when Sierra bought the initial 100,000 shares from Yang. The customers, however, were Goelo, Geiger`s wife, Geiger`s mother, Richardson, and McCamey. There was no preexisting retail interest in the remaining 20,000 Yang shares, or for the other 100,000 shares Sierra bought from Yang and Luo in the first eleven minutes of trading on March 6, 2000.

63. As the day wore on, Sierra bought back over half of the 40,000 BluePoint shares Sierra had sold earlier to Geiger`s wife, Geiger`s mother, Richardson, and McCamey. Sierra paid as much as $19.875 per share for the stock, which it had sold to these customers for $6.1275 per share.

64. At all relevant times and to date, the Promoter Defendants never made any filings with the Commission as required to report their sales of BluePoint securities and the change in their ownership.

65. At all relevant times, Tsai, the Promoter Defendants, Sierra and Richardson sold or offered to sell shares of BluePoint without a registration statement in effect.

The Slide Down

66. BluePoint never regained the $21 per share high and million-plus volume seen on its first day of trading. On the first day, it closed at $17.75 per share. On the second day, BluePoint closed at $18.50 per share, and trading volume fell to slightly over 100,000 shares. By March 13, 2000, BluePoint closed at $17.875 per share on volume of 80,000 shares. By March 20, 2000, the closing price was $14.50 per share on a volume of 34,000, and by March 27, 2000, BluePoint closed at $13.75 per share with volume of 25,000. On April 6, 2000, one month after it began trading, BluePoint closed at $6.875 per share with volume of 6,700.

67. On the last trading day in April, BluePoint closed at $6.375 per share with 3,700 in volume. By the end of May, it was down to slightly over $4.00 per share, and by the end of June, it fell to under $3.00 per share, with volume at 3,800.

68. After July 2000, BluePoint never closed above $5 again.

Touting Scheme

69. Markow and Goelo orchestrated a scheme to arrange for individuals, including Armstrong, to tout the BluePoint stock. Armstrong posted over eighty times on the BluePoint message board located on the Raging Bull website in the first three weeks. He praised BluePoint`s investment value and encouraged traders who were having trouble getting their orders filled to keep trying. Armstrong never stated in his posts on the Internet that he was being compensated for making the postings. However, Goelo and Markow compensated Armstrong by transferring stock in three separate companies to Armstrong at below market prices during the relevant time period.

Profits to the Defendants

70. All the defendants profited from selling BluePoint. After the first day of trading and continuing through July, the Promoter Defendants sold off many of their remaining shares. Although the price of BluePoint fell sharply during this period, the Promoter Defendants continued to profit because they had paid Tsai only pennies per share for their stock.

71. Tsai received $250,000 from the Promoter Defendants when they bought the nominee shares from him.

72. To date, the Promoter Defendants` approximate profits from selling BluePoint are as follows: Yang $1.27 million; Luo $1.24 million; Markow $1.23 million; and Goelo $300,000.

73. Sierra`s profits from BluePoint were about $570,000 on March 6, 2000 and about $40,000 thereafter. Sierra paid 60% of its March 6 BluePoint profits to Geiger, per his usual compensation program. Richardson has made about $90,000 in profits from trading BluePoint in his personal account, most of which he made on March 6.

74. Armstrong made at least $20,000 from selling the shares of the three securities he received from Markow and Goelo.

75. In making their profits, the Promoter Defendants did not give up their control of the float. By the end of the third week of trading (March 27, 2000), they still directly held about 2.97 million shares. On succeeding dates, they still held shares as follows: April 17, 2.96 million shares; April 30, 2.94 million shares; May 31, 2.63 million shares; June 30, 2.82 million shares; July 31, 2.78 million shares.

76. During this time, the Promoter Defendants never reported made any filings with the Commission as required to report their sales of BluePoint stock and the change in their ownership of the securities.

COUNT I

Violations of Sections 5(a) and 5(c) of the Securities Act
[15 U.S.C. §77e(a) and §77e(c)]

77. Paragraphs 1 through 76 are hereby realleged and incorporated by reference.

78. From February 2000 through at least July 2000, Defendants Tsai, Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra and Richardson, and each of them, directly or indirectly, made use of the means or instruments of transportation or communication in interstate commerce or of the mails to offer and sell securities through the use or medium of a prospectus or otherwise when no registration statement has been filed or was in effect as to such securities and when no exemption from registration was available.

79. Tsai orchestrated a complex scheme to create the appearance that he had distributed MAS shares to dozens of shareholders who in fact were nominees. Tsai then sold this nominee stock to the Promoter Defendants. Yang and Luo resold 220,000 shares to Sierra, which immediately resold shares. Thereafter, all the promoters continued to sell shares they had acquired from Tsai, and Richardson sold the BluePoint shares he obtained from Sierra. Overall, Tsai, the promoters, Sierra and Richardson funneled BluePoint stock into the public trading market without a registration statement in effect.

80. By reason of the activities described in paragraphs 77 through 79 above, Defendants Tsai, Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra and Richardson, and each of them, violated Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §77e(a) and §77e(c)].

COUNT II

Violations of Section 17(a)(1) of the Securities Act [15 U.S.C. §77q(a)(1)]

81. Paragraphs 1 through 76 are realleged and incorporated by reference herein.

82. At the times alleged in this Complaint, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, and each of them, in the offer and sale of securities, by the use of the means and instruments of transportation and communication in interstate commerce and by the use of the mails, directly and indirectly, employed devices, schemes and artifices to defraud, all as more fully described in paragraphs 1 through 76 above.

83. Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, and each of them, knew or were reckless in not knowing of the facts and circumstances described in paragraphs 1 and 76 above.

84. By reason of the activities described in paragraphs 81 through 83 above, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, and each of them, violated Section 17(a)(1) of the Securities Act [15 U.S.C. §77q(a)(1)].

85. Alternatively, by reason of the activities described in paragraphs 81 through 83 above, Defendant Markow and Global Guarantee knew, or was reckless in not knowing, of the activities committed by Defendants Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, violated Section 17(a)(1) of the Securities Act [15 U.S.C. §78q(a)(1)], and provided substantial assistance in their violation. Thus, Defendants Markow and Global Guarantee aided and abetted Defendants Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson`s violation of Section 17(a)(1) of the Securities Act [15 U.S.C. §78q(a)(1)].

COUNT III

Violations of Section 17(a)(2) and 17(a)(3) of the Securities Act
[15 U.S.C. §§77q(a)(2) and 77q(a)(3)]

86. Paragraphs 1 through 76 are realleged and incorporated by reference herein.

87. At the times alleged in this Complaint, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, and each of them, in the offer and sale of securities described above in paragraphs 1 through 76, by the use of the means or instruments of transportation and communication in interstate commerce and by the use of the mails, directly and indirectly, obtained money and property by means of untrue statements of material facts and have omitted and are omitting to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and engaged in transactions, practices or courses of business which operated and operated as a fraud and deceit upon purchasers and prospective purchasers as more fully described in paragraphs 1 through 76 above.

88. By reason of the activities described in paragraphs 86 and 87 above, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, and each of them, violated Section 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. §77q(a)(2) and §77q(a)(3)].

89. Alternatively, by reason of the activities described in paragraphs 86 through 87 above, Defendants Markow and Global Guarantee knew, or was reckless in not knowing, of the activities committed by Defendants Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, violated Section 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. §77q(a)(2) and §77q(a)(3)], and provided substantial assistance in their violation. Thus, Defendants Markow and Global Guarantee aided and abetted Defendants Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson`s violation of Section 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. §78q(a)(2) and §78q(a)(3)].

COUNT IV

Violations of Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)]
and Rule 10b-5 [17 C.F.R. §240.10b-5] Thereunder

90. Paragraphs 1 through 76 are realleged and incorporated by reference as if set forth fully herein.

91. At the times alleged in the Complaint, Defendants Markow and Global Guarantee, in connection with the purchase and sale of securities described above in paragraphs 1 through 76, by the use of the means and instrumentalities of interstate commerce and of the mails, directly and indirectly, employed devices, schemes and artifices to defraud; made statements of material fact and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and engaged in acts, practices and courses of business which operated as a fraud and deceit upon purchasers and sellers of such securities as more fully described in paragraphs 1 through 76 above; or in the alternative, by reason of the activities described in paragraphs 1 through 76 above, Defendants Markow and Global Guarantee knew, or was reckless in not knowing, of the activities committed by Defendants Goelo, Yang, Luo, Sierra, Geiger, and Richardson, violated Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R. §240.10b-5] promulgated thereunder, and provided substantial assistance in their violation. Thus, Defendants Markow and Global Guarantee aided and abetted Defendants Goelo, Yang, Luo, Sierra, Geiger, and Richardson`s violation of Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R. §240.10b-5] promulgated thereunder.

92. At the times alleged in the Complaint, Defendants Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, and each of them, in connection with the purchase and sale of securities described above in paragraphs 1 through 76, by the use of the means and instrumentalities of interstate commerce and of the mails, directly and indirectly, employed devices, schemes and artifices to defraud; made statements of material fact and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and engaged in acts, practices and courses of business which operated as a fraud and deceit upon purchasers and sellers of such securities as more fully described in paragraphs 1 through 76 above.

93. Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, and each of them, knew or were reckless in not knowing of the activities described in paragraphs 1 and 76 above.

94. By reason of the activities described in paragraphs 90 through 93 above, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, and each of them, violated Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R. §240.10b-5] promulgated thereunder.

COUNT V

Violations of Section 15(c)(1) of the Exchange Act [15 U.S.C. §78o(c)(1)]

95. Paragraphs 1 through 76 are realleged and incorporated by reference herein.

96. At all times alleged in the Complaint, Defendants Sierra, as a registered broker-dealer, made use of the mails and instrumentalities of interstate commerce, and induced the purchase and sale of securities, otherwise than on a national securities exchange of which they were members, by means of manipulative, deceptive and fraudulent devices and contrivances, as more fully described in paragraphs 1 through 76 above.

97. Defendant Sierra knew, or was reckless in not knowing, of the activities described in paragraphs 1 and 76 above.

98. By reason of the activities described in paragraphs 95 through 97 above, Defendant Sierra violated Section 15(c)(1) of the Exchange Act [15 U.S.C. §78o(c)(1)] and Rule 15c1-2 [17 C.F.R. §240.15c1-2].

COUNT VI

Aiding and Abetting Violations of Section 15(c)(1) of the Exchange Act
[15 U.S.C. §78o(c)(1)]

99. Paragraphs 1 through 76 are realleged and incorporated by reference herein.

100. At all times alleged in the Complaint, Defendant Sierra, as a registered broker-dealer, made use of the mails and instrumentalities of interstate commerce, and induced the purchase and sale of securities, otherwise than on a national securities exchange of which they were members, by means of manipulative, deceptive and fraudulent devices and contrivances, as more fully described in paragraphs 1 through 76 above.

101. Defendants Geiger and Richardson knew, or were reckless in not knowing, of the activities committed by Defendant Sierra as described in paragraphs 1 and 76 above, violated Section 15(c)(1) of the Exchange Act [15 U.S.C. §78o(c)(1)], and provided substantial assistance in Defendant Sierra`s violation.

102. By reason of the activities described in paragraphs 99 through 101 above, Defendants Geiger and Richardson aided and abetted Defendant Sierra`s violation of Section 15(c)(1) of the Exchange Act [15 U.S.C. §78o(c)(1)].

COUNT VII

Violations of Section 17(b) of the Securities Act [15 U.S.C. §77q(b)]

103. Paragraphs 1 through 76 are realleged and incorporated by reference herein.

104. At all times alleged in the Complaint, Defendant Armstrong, by engaging in the conduct described above with respect to BluePoint, used the means or instruments of interstate transportation, or communication in interstate commerce, or the mails, to publish or circulate communications which described securities for a consideration received or to be received, directly or indirectly from the issuers, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof, as more fully described in paragraph 66 above.

105. By reason of the activities described in paragraphs 103 through 104 above, Defendant Armstrong violated Section 17(b) of the Securities Act [15 U.S.C. § 77q(b)].

COUNT VIII

Violations of Section 13(d) (1) and (2) of the Exchange Act
[15 U.S.C. §§78m(d)(1) and (2)] and Rule 13d-1(a) and 13d-2(a)
thereunder [17 C.F.R. §§240.13d-1(a) and 240.13d-2(a)]

106. Paragraphs 1 through 76 are realleged and incorporated by reference herein.

107. The common stock of BluePoint was registered pursuant to Section 12 of the Exchange Act [15 U.S.C. §78l] and was listed and traded on the OTC Bulletin Board, as more fully described in paragraphs 31 and 32 above.

108. At all times alleged in the Complaint, Defendant Tsai, directly or indirectly through nominees, beneficially owned substantially more than 5% of the issued and outstanding shares of MAS. Defendant Tsai, however, never filed any Schedule 13D with the Commission which disclosed his beneficial ownership of MAS stock.

109. At all times alleged in the Complaint, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M acted as a "group for the purpose of acquiring, holding, or disposing of securities" and thus, are deemed a "person" as defined by Section 13(d)(3) of the Exchange Act [15 U.S.C. §78m(d)(3)].

110. Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M acting as a group, directly or indirectly, beneficially owned substantially more than 5% of the issued and outstanding shares of BluePoint. During all relevant times, Defendants Markow, Global Guarantee, Goelo, Yang, and Luo, directly or through entities they controlled, sold, for their own benefit, no less than 611,400 of these shares. Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M, however, never filed any Schedule 13D with the Commission disclosing their beneficial ownership and changes in beneficial ownership of BluePoint stock.

111. At all times alleged in the Complaint, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M, never filed any Schedule 13D with the Commission disclosing their purpose for acquiring shares in BluePoint and any contracts, arrangements, or understandings they had amongst themselves with respect to BluePoint, including but not limited to, guaranties against loss or guaranties of profits. During this same time period, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M, never filed any Schedule 13D with the Commission disclosing the source and amount of the funds or other consideration used or to be used in making the purchases in shares of BluePoint. Furthermore, Markow never reported the "desist-and-refrain" orders issued against him by the state of California as required by Schedule 13D.

112. By reason of the activities described in paragraphs 106 through 111 above, Defendants Tsai, Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M violated Section 13(d)(1) of the Exchange Act [15 U.S.C. §78m(d)(1)] and Rule 13d-1(a) thereunder [17 C.F.R. §§240.13d-1(a)].

113. By reason of the activities described in paragraphs 106 through 111 above, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M violated Section 13(d)(2) of the Exchange Act [15 U.S.C. §78m(d)(2)] and Rule 13d-2(a) thereunder [17 C.F.R. §§240.13d-2(a)].

COUNT IX

Violations of Section 16(a) of the Exchange Act [15 U.S.C. §78p(a)]
and Rule 16a-3 thereunder [17 C.F.R. §§ 240.16a-3]

114. Paragraphs 1 through 76 are realleged and incorporated by reference herein.

115. The common stock of BluePoint was registered pursuant to Section 12 of the Exchange Act [15 U.S.C. §78l] and was listed and traded on the OTC Bulletin Board, as more fully described in paragraphs 31 and 32 above.

116. At all times alleged in the Complaint, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M, are deemed a "person" as defined by Rule 16a-1(a)(1) of the Exchange Act [17 C.F.R. §240.16a-1(a)(1)].

117. At all times alleged in the Complaint, Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M, acting as a group, and Tsai beneficially owned substantially more than 10% of the issued and outstanding shares of BluePoint. Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M, however, never filed any Forms 3 or 5 with the Commission disclosing their beneficial ownership of BluePoint stock.

118. Defendants Markow, Goelo, Yang, and Luo, directly or through entities they controlled, sold, for their own benefit, no less than 611,400 of their BluePoint shares. Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M, never filed any Forms 4 notifying the Commission of changes in their BluePoint holdings.

119. By reason of the activities described in paragraphs 114 through 118 above, Defendants Tsai, Markow, Global Guarantee, Goelo, Yang, K&J, Luo, and M&M violated Section 16(a) of the Exchange Act [15 U.S.C. §78p(a)] and Rule 16a-3 thereunder [17 C.F.R. §§240.16a-3].

PRAYER FOR RELIEF

WHEREFORE, the Commission requests that the Court:

I.

Find that Defendants committed the violations alleged above.

II.

Grant an Order of Permanent Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining Defendants Tsai, Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, and Richardson, their officers, agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order of Permanent Injunction, by personal service or otherwise, and each of them, from, directly or indirectly, engaging in the acts, practices or courses of business described above, or in conduct of similar purport and object, in violation of Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §77e(a) and 77e(c)].

III.

Grant an Order of Permanent Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, Sierra, Geiger, and Richardson, their officers, agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order of Permanent Injunction, by personal service or otherwise, and each of them, from, directly or indirectly, engaging in the acts, practices or courses of business described above, or in conduct of similar purport and object, in violation of Sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. §§77q(a)(1), 77q(a)(2) and 77q(a)(3)] and Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R. §240.10b-5] thereunder.

IV.

Grant an Order of Permanent Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining Sierra, Richardson and Geiger, their agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order of Permanent Injunction, by personal service or otherwise, and each of them, from, directly or indirectly, engaging in the acts, practices or courses of business described above, or in conduct of similar purport and object, in violation of Sections 15(c)(1) of the Exchange Act [15 U.S.C. §78o(c)(1)].

V.

Grant an Order of Permanent Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining Armstrong, his agents, servants, employees, attorneys and those persons in active concert or participation with him who receive actual notice of the Order of Permanent Injunction, by personal service or otherwise, and each of them, from, directly or indirectly, engaging in the acts, practices or courses of business described above, or in conduct of similar purport and object, in violation of Sections 17(b) of the Securities Act [15 U.S.C. §77q(b)].

VI.

Grant an Order of Permanent Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining Defendants Tsai, Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, their agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order of Permanent Injunction, by personal service or otherwise, and each of them, from, directly or indirectly, engaging in the acts, practices or courses of business described above, or in conduct of similar purport and object, in violation of Sections 13(d)(1) and 16(a) of the Exchange Act [15 U.S.C. §§78m(d)(1) and 78p(a)] and Rules 13d-1(a) and 16a-3 promulgated thereunder [17 C.F.R. §§240.13d-1(a) and 240.16a-3].

VII.

Grant an Order of Permanent Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining Defendants Markow, Global Guarantee, Goelo, Yang, K&J, Luo, M&M, their agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order of Permanent Injunction, by personal service or otherwise, and each of them, from, directly or indirectly, engaging in the acts, practices or courses of business described above, or in conduct of similar purport and object, in violation of Sections 13(d)(2) of the Exchange Act [15 U.S.C. §78m(d)(2)] and Rule 13d-2(a) promulgated thereunder [17 C.F.R. §§240.13d-2(a)].

VIII.

Grant an Order requiring all Defendants to disgorge the ill-gotten gains that they received as a result of their wrongful conduct, including prejudgment interest.

IX.

Impose civil penalties against all Defendants in accordance with Section 20(d) of the Securities Act [15 U.S.C. §77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §78u(d)(3)].

X.

Retain jurisdiction of this action in accordance with the principals of equity and the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that may be entered or to entertain any suitable application or motion for additional relief within the jurisdiction of this Court.

XI.

Grant Orders for such further relief as the Court may deem appropriate.

Respectfully Submitted,

___________________________
Amy Stahl Cotter

___________________________
Tracy W. Lo

Attorneys for
Plaintiff U.S. Securities and Exchange Commission
175 W. Jackson Blvd., Suite 900
Chicago, IL 60604
(312) 353-7390 (phone)
(312) 353-7398 (fax)
Dated: April 11, 2003

sec.gov

=================================================================

Regis Possino



Raymond Dirks



CRIMM Anthony L Tobin makes vintage statement on this message board in 1999. Sorry Anthony but you were nothing but a two bit CRIMM

To: jjs64 who wrote (249)4/7/1999 10:01:00 AM
From: Anthony L Tobinof 10310
ZSUN - MESSAGE FROM THE PRESIDENT/CEO

I have been alerted by several people that there is much discussion of ZSUN, and myself, taking place on these message boards, so I have taken the time to browse through.

It appears that many of the postings, both positive and negative, do not appear to have any relevance to ZiaSun's activities, or to whether the company would be a good investment or not.

Some of the postings are amusing, some are rather shocking. Some are outright lies.

I do understand that most people who post on and read this board are investors, holding both long and short positions. I have little experience as an active stock trader, but I do believe that everyone has the right to make money no matter how they trade a stock.

However, I don't believe that traders should be allowed to profit from defamation of a company or a person. This is something that ZiaSun and some of its larger shareholders are looking into through legal counsel.

I urge anyone who is really interested in learning about ZiaSun to go to our website and read these recently updated pages:

http://www.ziasun.com/ceoframe.html
http://www.ziasun.com/finframe.html

Anthony L Tobin
President and CEO
ZiaSun Technologies Inc
www.ziasun.com

Euromoney.com Chronology of Controversial Practices in a Microcap Company A Case Study of Ziasun Technologies euromoney.com

Saturday, August 31, 2002

In 1998, numerous “new economy” companies that conducted business through the Internet floated very successful initial public offerings. Many investors believed that any company with the suffix dot-com could become the next Microsoft or Intel. They became willing to pay an absurd price for a dot-com company with no prospects.

A variety of opportunists took advantage of this irrational exuberance. They rushed to bring many conceptual companies to the Over-the-Counter through reverse mergers. Ziasun Technologies (ZSUN) was one of them, brought to the Over-the-Counter Bulletin Board (OTCBB) in September 1998.

The predecessor of ZSUN was formed on March 19, 1996, under the name of Carlisle Enterprise, Inc. The company’s stated business operation was executive search and employee recruitment, although it never engaged in human resource management—it mostly issued stock. At the time of inception, the founder, Jennifer McMinn, contributed $5,000 to the company, receiving 50,000 shares of common stock. Right before inception, the company issued 750,000 shares under Rule 504 of Regulation D to 50 non-U.S. citizens for a total consideration of $75,000. The stock was then quoted on OTCBB under the ticker symbol of CLEP.

Following this first private placement, the company acquired a company called Fountain Fresh International (FTFR), whose main business concept was to sell beverages through specially designed machines in grocery or convenience stores. The company then issued 15 million shares of Regulation S shares to offshore investors for a total consideration of $1.5 million. By April 1997, FTFR acquired Katori Consultants, a company owned by Bryant Cragun, father of the founder, Jennifer McMinn, and a related party to FTFR. Mr. Cragun claimed that Katori owned a license agreement to FTFR products. FTFR agreed to pay Katori $5 million over 20 years for the license agreement. The name of Fountain Fresh International was changed to BestWay USA, Inc. and was traded in OTCBB under the ticker symbol BTTF.

ABUSIVE REGULATION S OFFERING

Selling Regulation S securities in foreign countries exempts a company from the rigorous registration requirement provided by Securities Act of 1933. The assumption is that buyers of private placements are sophisticated foreign investors who understand the risk that they are taking. The restricted period reduces the immediate impact to the general public. When the restricted period expires, the investors must file Statement 144, proposed sale, to register the Regulation S securities. Additionally, investors can sell only 1% of the total outstanding shares in any given 90-day period. The regulatory agency believes that these rules offer protection to the current shareholders.

A closer examination of the offshore investors who initially bought the Regulation S shares from CLEP or BTTF reveals that they were nothing but front companies that were established by insiders and related parties of CLEP or BTTF in foreign countries. Those front companies bought CLEP or BTTF at the wholesale price of $0.10 and then resold the shares to neophyte foreign investors through boiler room operators. Although any party that acquires securities through private placements is required to file Statement 144 to sell after expiration of the restricted period, the SEC cannot stop a foreign party from reselling Regulation S shares to other foreign parties during the restricted period.

The front companies involved in these sales included International Assets Management, Oxford International Management, Amber Group, Pacific Continental Securities, and Capital Growth Reports, which operated in Brussels, Barcelona, Dublin, Jakarta, Manila, Hong Kong, Taipei, Melbourne, and Bangkok. These front companies and their unscrupulous operators were taking advantage of the growing demand for U.S. stock by foreigners during the bull market of the 1990s. They frequently resold the restricted S shares to uninformed foreign investors. The promoters moved from country to country, each move designed to elude the enforcement agencies.

Besides ZSUN, they promoted a basket of illiquid, money-losing microcap companies such as BTTF, Chequemate International (DDD), Titan Motorcycle Co. of America (TMOT), Dynatec International (DYNX), Fountain Fresh International (FTFR), BEVEX (BEVX), Loraca International, Inc. (LCAI), and Kensington International (KNGI). All these microcap companies eventually either filed for Chapter 7 bankruptcy or became inoperative. Their stock prices fell to near nothing.

In July 1997, BestWay USA made a private placement, and sold 129,994 shares for a total consideration of $324,984, or a price of $2.50 per share. For unknown reasons, these shares were not accounted for in Ziasun’s initial registration statement two years later. One possible explanation is that the shares were originally issued to insider-related parties and later resold to a new group of uninformed investors.

FAILURE OF BESTWAY USA

The business concept of BestWay USA has never become operative. By September 1998, the company had consumed all the cash from the private placement. Without any significant business operations, BestWay USA had become a shell corporation.

Meanwhile, the front company investors who bought those shares through private placements had gradually dumped all their shares either in the OTCBB or through their unscrupulous foreign brokers and also to uninformed individual investors in various countries. Although the company was inoperative and had consumed all the cash, the stock was quoted on OTCBB at $3 to $5 in 1997 and at $1 to $3 in 1998.

At that time, companies trading on the OTCBB did not have to file financial statements. Thus, investors were completely in the dark as to the company’s actual financial condition. They relied on the penny stockbrokers: boiler room operators who were adept at selling pitches and little else. When these ill-informed investors wanted to sell, the unscrupulous brokers gave them many reasons not to sell. In some cases, the brokers disappeared, leaving investors with worthless slips of paper.

In September 1998, the company announced a one-for- two reverse stock split, and changed its name to Ziasun Technologies. The company wrote down the license agreement to Katori Consultants for $50,000 and spun off the beverage business to an inactive company called BEVEX. BEVEX was quoted on OTCBB and later on the Pink Sheets. Ziasun Technologies had truly become a shell corporation, with no business earnings operations, but plenty of outside stock: 7.9 million shares after the reverse split.

A REVERSE MERGER

On October 5, 1998, the company announced a reverse merger by acquiring a financially strapped Philippines company, New Age Publication, whose principal business was in printing and telemarketing. Many of New Age’s clients had connections to Ziasun’s insiders or the companies peddled by International Assets Management, Oxford International Management, and so on. New Age Publication changed its name to Momentum Asia. Ziasun issued 2 million shares to acquire Momentum Asia.

On the same date, ZSUN also announced that it would acquire Momentum Internet, which was organized in the British Virgin Islands but had no assets or revenues. ZSUN, however, issued 565,000 shares to the sole shareholder of Momentum Internet, Vulcan Consultants. Vulcan Consultants had only one shareholder— who was at the time the president of Ziasun Technologies, Anthony Tobin.

ZSUN lent Anthony Tobin $75,000. Tobin paid the company back with 65,000 shares of stock. In other words, the total consideration was $75,000 plus 500,000 shares for a company that had nothing but the expectation of becoming an Asian Internet portal.

ZSUN claimed that the sources of revenues of Momentum Internet included online financial services, banner advertising, website advertising, e-mail list rentals, and online marketing. The sources of revenues of Momentum Asia included Internet support services such as website design, database management, telemarketing, and printing. A closer examination of the 10K statements of 1998, 1999, and 2000 reveals that both subsidiaries produced no meaningful revenues from Internet businesses at all.

Interestingly, ZSUN hired the same attorney, George C. Chachas, who was found to have participated in the fraud of Electro-Optical Systems and violated the registration provisions of the Securities Act of 1933 on April 20, 1998, as its legal counsel. Chachas drew all the legal documents of the reverse merger. Moreover, ZSUN employed a penny stock auditor, Jones & Jensen of Salt Lake City, Utah, as its independent accountant. Jones & Jensen has constantly been charged by the SEC for issuing opinions without performing audits according to generally accepted accounting principles.

CREATIVE ACCOUNTING

ZSUN also swapped its own common stock with other related microcap companies such as DDD, TMOT, or LCAI through the related parties. When ZSUN filed the first version of its registration statement on September 16, 1999, it listed two strange items as “other assets.” One was membership in country clubs for $142,857. The other was a common stock “held to maturity” valued at $857,243. The sum of these two unrelated items is exactly $1 million. The probability that two unrelated items with such odd values would have the sum of $1 million is ridiculously low.

One plausible explanation is that the parties intended to take advantage of the $1 million cap set by Rule 504 on Regulation D offerings. They then contributed a group of illiquid penny stocks and memberships in country clubs to come up with the $1 million in an effort to obtain ZSUN shares.

Like Regulation S, Regulation D permits a publicly held company to raise capital through private placements, except that the buyers can be U.S. citizens. Rule 504 limits the amount of an offering to $1 million within 12 months. Many microcap companies commonly abuse Rule 504 because the issuer is exempt from filing audited financial statements.

Moreover, bonds mature; one cannot hold a common stock to mature at a certain value. The most likely interpretation of “common stock held to maturity” is that these stocks are the restricted Regulation S securities of DDD, TMOT, and LCAI that were acquired from related parties. When the restricted periods expire, ZSUN can then reclassify these as marketable securities in the current assets section of its financial statements.

This accounting magic is very important to ZSUN. If ZSUN had issued its own stock, it would have had to record all the proceeds as contributed capital in the shareholders’ equity section. This stock would have no impact on the earnings per share. When it swapped the securities with other penny stocks, however, ZSUN was now able to record them as marketable securities.

Realized and unrealized gains on marketable securities would then be reported in the income statement, not as contributed capital on the balance sheet. The additional gains would increase the earnings per share. ZSUN could then tout these phantom profits to naive and illinformed investors. Unsophisticated investors would not understand these discrepancies; indeed, most cannot understand financial statements. They became easy targets or the boiler room operators.

STOCK PROMOTION AND EXAGGERATED ANNOUNCEMENTS

ZSUN then hired the penny stock market promotion firms, Veritas Group of Vancouver, Canada, and OTC Financial, to promote its stock. Many speculators with connections to the front companies of IAM and Oxford acquired shares before starting their game of stock manipulation in early February 1999. Some resorted to stock chat rooms such as Silicon Investor and Raging Bull to tout the stock.

Meanwhile, ZSUN issued a press release on February 8, 1999, claiming that it would achieve a $950,000 record profit on $2.4 million revenues and earnings per share exceeding $0.11 for 1998. In fact, ZSUN lost money from its two subsidiaries, Momentum Internet and Momentum Asia. The profit was from selling or holding the penny stocks such as DDD, TMOT, and LCAI that ZSUN had exchanged between related parties on or before the reverse merger.

On March 3, 1999, ZSUN announced that its Momentum Internet subsidiary produced a profit of $325,355 and revenues of $1,013,267. On April 9, 1999, ZSUN announced a two-for-one stock split. On April 19, 1999, it announced the completion of 1998 audited financial statements that achieved profit of $1,152,210 and revenues of $3,537,397 and EPS of $0.11.

ZSUN also posted the audited financial statements on its website—but a completely different financial statement from the audited financial statements ultimately filed with the SEC on September 16, 2001. The same accountant, Jones & Jensen, audited both these statements.

All this stock touting from different angles was very effective. The stock soared from a split-adjusted price of $2.50 in early February 1999 to as high as a split-adjusted price of $17.50 on March 31, 1999.

ACQUISITION FRENZY

On March 25, 1999, ZSUN acquired Asia4sale.com Ltd. for $15,000 and 100,000 common shares, plus one additional share for every dollar of earnings before income tax, interest, and depreciation expenses. ZSUN also lent $50,000 to Asia4sale for developing its website. Asia4sale was supposed to become the Asian version of Amazon. com, despite the fact that it had only a few thousand dollars in computer equipment and produced hardly any revenue.

Managers knew their earnings were mainly from touting games in the penny stock portfolio. They realized that this gain could not go on forever. ZSUN therefore began searching for a business that could produce a high profit margin so it could masquerade as a high-growth Internet holding company. On March 31, 1999, ZSUN announced it had acquired an investor education company, Online Investor Advantage (OIA). At the time of the acquisition, OIA had hardly any assets. It operated traveling investment seminars on Internet stock trading or day trading for $2,995 apiece.

ZSUN offered a very generous package to former OIA shareholders: $400,000 cash and 1 million common shares, plus 5 million common shares in escrow. OIA had to achieve $2.5 million in earnings before taxes, interest, and depreciation expenses for the first 12 months. If the earnings were above $2.5 million, the former OIA shareholders would receive two common shares for every dollar of earnings. If the earnings were below $2.5 million, the escrow shares would be reduced by two shares for every dollar of earnings. ZSUN also granted 150,000 shares to Global Marketing Direct for arranging the acquisition.

After this merger, OIA produced 85% of ZSUN’s revenues. The former OIA shareholders become the largest shareholders of ZSUN.

When ZSUN calculated the total shares it had to award to former OIA shareholders on March 31, 2000, it discovered that it had to issue over 21.8 million shares. The former OIA shareholders decided to sell 12 million shares back to ZSUN for $6 million, and received in exchange the remaining 9,820,522 shares. ZSUN recorded the total amount as goodwill for $111,704,230, which represented 90% of its total assets on March 31, 2000.

Interestingly, ZSUN’s market price on March 31, 2000, was $11.375, but the former OIA shareholders were willing to settle for $0.50 per share. They knew that there would be extreme difficulties in unloading 12 million shares on the open market for an obscure company like ZSUN. Therefore, $0.50 per share was a very good deal for them.

SLAPP LAWSUITS

Many critics posted negative statements about ZSUN’s controversial practices on Internet message boards. A now-defunct website publisher, StockDetective.com of Financial Web, posted an article about ZSUN’s various activities. Instead of changing its behavior, ZSUN filed strategic litigation against public participation (SLAPP) lawsuits against all the critics. Obviously, the primary purpose of these lawsuits was to silence the critics, because the chances of actually obtaining a financial judgment were virtually non-existent. Apparently, ZSUN believed that the individual critics had no resources to defend themselves. The idea was to force these critics to sign agreements not to post any negative comments.

ZSUN continued to issue exaggerated press releases in 1999 and 2000. It held itself out as a profitable leading Internet holding company, despite the fact that all its Internet holding units had produced little revenue and had all lost money. In reality, ZSUN was nothing but OIA in disguise. ZSUN was riding on the Internet fever. As long as it claimed to be an Internet business, gullible investors would bid up the price. If ZSUN had actually disclosed that the primary business was a traveling seminar firm, investors would have little interest.

PSEUDO-RESEARCHERS

ZSUN’s related parties then employed stock promoters, Security Capital Trading, Dirks and Associates, Access One Financial, and Stockreporter.de, to write pseudo-research reports and issue strong-buy recommendations with target prices as high as $36 between November 1999 and June 2000. The promoters all received ZSUN shares and cash for writing the research reports, but they never disclosed the amount of compensation, in clear violation of Section 17b of the Securities Act of 1933 and Section10b of the Securities Act of 1934.

Although there was no direct evidence that ZSUN paid for this pseudo-research, ZSUN used the promoters’ reports as its official press releases. The SEC later charged Stockreporter.de with violation of the Securities Act of 1933 for touting ZSUN without disclosing the amount of compensation.

EARNINGS REVISIONS

ZSUN started to file its first registration statement on September 16, 1999. The registration statement needed seven revisions to obtain final approval from the SEC. For unknown reasons, ZSUN constantly revised its revenues of 1998 downward. Sales went from $3,537,397 to $760,529. Net income was revised from $1,152,210 to $769,320.

A closer examination of ZSUN’s operating results reveals that ZSUN lost $201,729 from operations. The company generated $535,801 profit from realized gain on marketable securities and $712,438 profit from unrealized gain on marketable securities. These gains are clear evidence that ZSUN swapped its own stock with the stock of its related parties, DDD, TMOT, and LCAI to portray itself as a profitable Internet holding company.

Further examination of the financial statements of DDD, TMOT, and LCAI reveals that these companies also reported realized and unrealized gains from selling and holding ZSUN stock. Thus, as we have described before, by swapping stocks among themselves, each company was able to shift money from additional paid-in capital contributions on to the income statement. This accounting sleight of hand allowed these companies to conceal their operating losses.

CREATION OF A PHANTOM COMPANY

On December 23, 1999, ZSUN announced the sale of Asia4sale.com Ltd. to Internet Venture in Somoa, Indonesia, for $5 million and 300,000 shares of Internet Venture. Internet Venture had 1 million shares outstanding. Therefore, after the acquisition, ZSUN owned 30% of Internet Venture. Since Internet Venture owned 100% of Asia4sale.com Ltd., and ZSUN owned 30% of Internet Venture, ZSUN still owned 30% of Asia4sale.com Ltd., as well. Asia4sale.com Ltd. had a negative net worth of $6,986 as of December 31, 1999, with revenue of $70,024 and a net operating loss of $9,213 excluding goodwill amortization in 1999.

The casual observer might wonder why anyone would pay $5 million for an obscure company with few assets and a dead-end future; however, a closer examination of the people behind the scenes clarifies the madness. Internet Venture had a close connection with ZSUN’s insiders and related parties such as International Assets Management, Oxford International Management, and Capital Growth Report. Internet Venture raised the $5 million to pay for Asia4sale.com Ltd. from ill-informed Asian investors. Apparently, Internet Venture promised these naive investors that once Asia4sale.com started trading in the U.S., the investors would receive a more than 1,000% return. Internet Venture did not raise the capital in U.S., so it was beyond the reach of the SEC. It did not have to file registration statements with the SEC under the Securities Act of 1933. The company was based and located in Indonesia. It was beyond the reach of the regulatory agencies in other Asian countries as well.

$5 million is also an important figure to ZSUN. ZSUN’s final purpose was to send Asia4sale.com for quoting on the OTCBB. Under Section 3(b) of the Securities Act of 1933, the maximum amount of an offering exempted from registration is $5 million. Thus, the offering to the Asian investors by Internet Venture was not required to re-register under the Securities Act of 1933 when those securities started to circulate in the U.S.

We have already noted that the former OIA shareholders received $6 million to settle their claim on a bonus 12 million shares of ZSUN. We can almost be assured that ZSUN used the proceeds of $5 million from the sale of Asia4sale.com Ltd. to Internet Venture to pay most of the former OIA shareholders’ $6 million bonus.

On February 10, 2000, Internet Venture entered a reverse merger deal with Asia4sale.com Inc. in the U.S. Asia4sale.com Inc. was a company previously known as H&L Investment. H&L Investment was a shell corporation incorporated in September 1996 and quoted on the OTCBB. The company had no assets, and a negative net worth of $1,285, but it had 1 million shares of common stock outstanding. Out of those 1 million shares, 200,000 shares were tradable. Obviously, H&L had close connections with ZSUN insiders and other related parties.

Asia4sale.com Inc. issued an additional 9 million shares to exchange all 1 million shares owned by Internet Venture. The company then changed its ticker symbol from HLIN to AFSI. The ultimate result of these dealings transformed ZSUN’s Asia4sale.com Ltd. into an OTCBB company, Asia4sale.com Inc.—completely avoiding the registration process. Under Section 3(a)(10) of the Securities Act of 1933, securities being exchanged for mergers are exempt from registration. After the reverse merger, ZSUN’s ownership dropped to 27%; the naive Asian investors now owned 63%, and the original shareholders of H&L owned the remaining 10%.

Although 9 million shares were floating around, these were restricted for one year. In actuality, the float of tradable AFSI stock was only 200,000 shares. Market makers could easily manipulate the price. Before the merger, HLIN seldom traded on the OTCBB—but upon changing its name to AFSI, the first trade was for 800 shares at $10 a share. Trading volume had previously been extremely thin.

Out of nothing, AFSI created an absurd market value of $100 million—a dramatic value for a company with very little business activity, and that was virtually worthless before one simple name change.

A LIQUIDATION DIVIDEND AND EARNINGS MANIPULATION

On March 29, 2000, ZSUN announced that it would grant 800,000 shares of AFSI to ZSUN shareholders. ZSUN’s ownership in AFSI now dropped to 19%. ZSUN decided that it could now apply the cost method of accounting rather than the equity method of accounting for its ownership in AFSI, according to Financial Accounting Standards Board (FASB) Statement 115. The losses of AFSI would no longer be allocated to ZSUN. This change allowed ZSUN to use the absurd market value of AFSI to generate unrealized gains and to cover up the huge losses in stock investments and unprofitable Internet operations.

In its 10Q statement for the second quarter of 2000, ZSUN reported $3.8 million of unrealized gain from AFSI ($2 per share). Without this item, ZSUN would have incurred $471,661 of unrealized loss on marketable securities in that quarter. FASB Statement 115, however, allows an investor to report only the unrealized gain from “trading securities” on the income statement. Trading securities are debt and equity securities purchased with the intent of selling them in the near future. Trading involves frequent buying and selling of securities. Restricted shares of AFSI were not tradable. Thus, there could have been no intention of selling these shares. Shares of AFSI were extremely illiquid because of thin trading.

At best, ZSUN should have classified the shares of AFSI as available-for-sale securities. Unrealized gains from available-for-sale securities must be reported in the shareholders’ equity section, not on the income statement. ZSUN’s reporting of the unrealized gain on the income statement was a clear attempt to manipulate the EPS, in violation of generally accepted accounting principles.

In another twist, ZSUN valued AFSI at $2.0875 a share while the stock was quoted in the OTCBB at between $8.5 to $10.5. ZSUN never explained the basis for its valuation in the 10Q statement. Unfortunately for ZSUN shareholders, the company announced it was canceling the liquidating dividend of 800,000 shares on May 16, 2001. The shareholders were never able to realize this dividend, while ZSUN was able to take advantage of reducing its ownership of AFSI to 19%.

The absurd market capitalization served two other purposes. First, AFSI could tell the ill-informed Asian investors that their $5 million investment was worth an amazing $63 million. Second, AFSI used the absurd valuation to convince another group of naive investors to purchase 800,000 more restricted shares through a private placement at $2.50 per share.

The naive investors did not understand that when the restricted period expired, they were required to file Statement 144 to register their shares. Furthermore, the maximum shares disposed of cannot exceed more than 1% of the total outstanding shares in each quarter. Thin trading prohibited shareholders of AFSI from liquidating their positions at a reasonable price.

The final fate of AFSI was almost predictable. AFSI could not produce the 10K statement of 2000. The stock was removed from OTCBB system. It is currently quoted in the Pink Sheets at $0.01 per share, and has virtually no trading activity.

A NONSENSE ACQUISITION

On June 6, 2000, ZSUN announced the acquisition of Asia Prepress Technology for $100,000 cash, 100,000 restricted shares, and assumption of a loan of over $159 million. ZSUN also acquired Asia Internet Services for $200,000 cash and 150,000 restricted common shares.

Both companies had been operated by the same individual and used the same office as Momentum Asia, ZSUN’s Philippines subsidiary. Apparently, they had few assets or revenues but offered plenty of hope and promise. Why would ZSUN pay so much for companies doomed to fail?

KAMIKAZE INVESTMENT

On June 22, 2000, ZSUN announced that it had formed a McKenna-Ziasun Venture Fund (MKZ) with the McKenna Group of California. Under the agreement, ZSUN would contribute $15 million to MKZ. The McKenna Group would provide the management, consulting, and analysis services on behalf of the Venture Fund under the direction of an investment board made up of both ZSUN and the McKenna Group members.

ZSUN contributed 100% to MKZ but it would receive only 60% of the first $20 million of MKZ distributions, and the McKenna Group would receive 40% of such distributions. ZSUN would receive 51% of distributions above $20 million, and McKenna Group would receive 49% of such distributions.

A new business entity, McKenna Venture Accelerator (MVA), was formed to which ZSUN, through MKZ, was the sole contributor. Although the McKenna Group contributed no money, it held 25% of the ownership in MVA. The management team of MVA had 15% ownership; ZSUN’s MKZ had 60% of the ownership in MVA.

MVA invested in several extremely risky start-ups. ZSUN lost 40% of the $15 million immediately upon contributing the money to MKZ and then to MVA. If these ventures ever made a dime, ZSUN could enjoy only 60% of the return from MVA and lose another 40% or 49% through MKZ.

This investment makes no sense, if the purpose of the investment is to make money. The only explanation is that the money was diverted to start-ups that had connections with ZSUN’s insiders.

As of June 30, 2001, ZSUN had contributed only $7.5 million to MKZ. ZSUN reported a loss of $200,000 on MVA in 2000. It reported a loss of $474,603 on MVA in the first half of 2001. ZSUN paid 50,000 restricted shares to Bryant Cragun, former ZSUN CEO, and current advisor. ZSUN also paid 50,000 restricted shares to one of its directors, Hans Von Meiss, to arrange a deal that most people would have avoided.

EXPOSURE BY THE MAINSTREAM MEDIA

On August 16, 2000, the Wall Street Journal (WSJ ) reported stock scams perpetrated by International Assets Management (IAM) and Oxford International Management (OIM), which had been established and operated by ZSUN’s insiders or related parties in Europe and Asia. The Journal reported that legions of Europeans and Asians had developed a strong appetite for U.S. stocks because of the prolonged bull market and rising economy during 1990s. Unfortunately, neophyte investors often ventured into a grey area that national regulators are either unable or unwilling to police.

Outfits like IAM and OIM typically bought unregistered, illiquid penny stocks at significant discounts through Regulation S private placements. To elude the enforcement of a national regulatory agency, they operated in one foreign country to entice investors in another foreign country into buying these worthless stocks. Then, when investors discover they have been defrauded and complain to the SEC, they are told that the agency cannot help because the shares were issued under Regulation S. Investors frequently can neither receive their stock certificates nor sell their stocks. Often the broker would sell the shares only if the investors agreed to plow the proceeds into another obscure penny stock.

After the WSJ article, ZSUN realized that it had to put an end to its SLAPP actions. The management settled with all the critics on October 11, 2000. Since Financial Web had filed for bankruptcy under Chapter 7, ZSUN rescinded the lawsuit against it.

DIVESTMENT

On September 15, 2000, ZSUN announced that it was selling Momentum Internet back to its original owner, Vulcan Consultants, because Momentum Internet had not produced any significant revenues. The dream of becoming Yahoo! in Asia had suddenly vaporized. Vulcan Consultants returned 750,000 shares of ZSUN and paid back a $500,000 loan. Apparently, Vulcan Consultants knew this coming event. It started liquidating 250,000 shares at the then market price around $6 per share in June 2000 in order to pay back the $500,000 loan and make a handsome $1 million profit.

When a bear market arrived in Summer 2000, ZSUN encountered difficulty selling its high-priced investment seminars. Revenues and margin declined. Ironically, ZSUN was teaching people “how to invest,” but did not know how to handle its own money. ZSUN’s stock portfolio incurred significant amounts of realized and unrealized losses in 2000. The touting activities gradually waned.

ZSUN’s share price steadily declined. It dropped below $1 in the fourth quarter of 2000. By the third quarter of 2001, the stock had dropped below $0.40.

In the 10K statement of 2000, ZSUN announced that it was divesting all of its foreign Internet subsidiaries. On April 27, 2001, the former owners of Momentum Asia returned 200,000 shares of ZSUN for the subsidiary. ZSUN paid $50,000 to the former owners of Momentum Asia. On June 27, 2001, the former owner of Asia Prepress Technology and Asia Internet Services returned 200,000 restricted shares of ZSUN and agreed to pay ZSUN $200,000 over three years.

ZSUN decided to write off the entire ownership in AFSI. ZSUN also rescinded the promised liquidation dividends to its (once) gullible shareholders. The dream of becoming Amazon.com in Asia vanished.

ZSUN used the absurd valuation of AFSI to cover up the losses of its stock portfolio and the slowdown of its investment seminar business in its second and third quarter 10Q statements in 2001. When it wrote off AFSI in the 10K statement, it simply told shareholders that the writeoff was a one-time charge. ZSUN did not explain why its shares of AFSI jumped from 2.7 million shares to 5.4 million shares. Poor neophyte investors who bought the stock on misleading information now incurred huge losses.

The entire losing stock portfolio was pushed into the assets of discontinued operations. Apparently, ZSUN turned in the stock portfolio to Momentum Asia when that subsidiary was divested. After the divestment, ZSUN was equivalent to Online Investor Advantage, an investment seminar firm.

GETTING OUT OF THE SHADOWS

On May 16, 2001, ZSUN announced a merger with Telescan (TSCN), a Nasdaq firm that specialized in investment software. ZSUN and TSCN would change their names to Investment Tool Inc.

Telescan had provided financial information services to several Internet portal companies. After it lost contracts with two media giants, however, the stock tumbled from the mid $30s in December 1999 to 30 cents in September 2001.

Apparently TSCN was on the verge of bankruptcy and delisting from Nasdaq, so it had no choice but to agree to a merger with a company with a tainted past. And ZSUN’s management believed that by merging with a Nasdaq company, it might be able to participate in the mainstream financial market.

CONCLUSION

The majority of penny stocks follow the tactics used by ZSUN. These peddlers apparently have no difficulty attracting neophyte investors and duplicating the scheme. We can summarize the common tactics as follows:

Birth from a reverse merger. The acquiring company is typically a publicly held shell corporation that has been inactive for years; the acquired company is typically financially strapped or a conceptual company with phantom technology—normally a private company. As long as the SEC allows shell corporations with no assets, no capital, no employees, and no intention of doing meaningful business activities to register as publicly held companies, the door is left open to the potential of fraud. The existence of these corporations allows swindlers to orchestrate reverse mergers and defraud uninformed investors. Laws can be strengthened to require that a reverse merger follow the same registration process as a new public offering.

Regulation D or Regulation S offering. Microcap companies frequently raise additional needed capital through private placements to circumvent the registration process. Regulation D deals with domestic investors, while Regulation S deals with offshore investors. Regulation S offerings are used most often because the SEC has more difficulty enforcing the law in foreign countries.

Promotion of stocks by public relations firms. The public relations firms frequently masquerade as unbiased researchers. They often violate Section 17 (b) of the Securities Act of 1933, which requires disclosure of compensation for advertising. Ill-informed investors then buy the stock through boiler room operators and on the basis of these strong buy recommendations.

Participation in Internet chat rooms. This method is an easy and effective way to promote a stock without being suspected by naive investors. Promoters masquerade as innocent investors merely sharing information. Once the stock is pumped up, they simply dump their shares. When the naive investors discover that they have been deceived, the swindlers have disappeared. The investor’s lifetime savings suddenly vanish, with little recourse.

Exaggerated press releases. This tactic is essential to attract the naive investors. Many of these investors do not or cannot read the SEC filing. They tend to believe press releases from management. Managers know that as long as their press releases are half-true and tread a fine line, they can defend themselves against SEC probes. And they know that the mainstream media has little interest in reporting unethical behavior at obscure firms.

Changing core business constantly. Promoters of dubious ventures tend not to focus on one core business. They tend to search for the business that is hot in the current market environment. The managers, insiders, related parties, and promoters are more interested in manipulating the stock price than actually developing the business.

Establishing many subsidiaries. Microcap companies are small. The number of employees is never more than a handful. Because these companies are small, it surely does not make economic sense to have a lot of subsidiaries. But the misleading ventures do. Apparently, the operators of microcap companies believe they can easily put pieces together and easily break a company apart. They also use the subsidiary structure to manipulate their earnings.

Nonsense investment. Many microcap companies have little respect for the shareholders’ money. They frequently make investments that would benefit only the insiders and the related parties. They seldom regard shareholders as their business partners.

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IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:
Harris v. Harris,

2006 BCSC 644

Date: 20060421
Docket: E042154
Registry: Vancouver

Between:

Lori Lynn Harris

Plaintiff

And

Mark Alan Harris

Defendant

Before: The Honourable Madam Justice Loo

Reasons for Judgment

Counsel for the Plaintiff
G. A. Lang and M. Bjelos

Counsel for the Defendant
S. J. Zukerman

Date and Place of Trial/Hearing:
14-17 November 2005; and

1-3 and 8-10 February 2006

Vancouver, B.C.

[1] After 16 years of marriage, the plaintiff Lori Harris and the defendant Mark Harris separated in September 2002. There are no children of the marriage. Ms. Harris who was 38 years old at separation, did not work during the marriage and has not worked since. She seeks seventy per cent of the net equity in the matrimonial home based on a value of $1.9 million, and lump sum spousal support of $200,000. The legal foundation for her claims is said to be as follows:

1. This is a long marriage.

2. Ms. Harris has no employment skills and was not able to advance her education or work skills during the marriage.

3. Ms. Harris followed her husband from Florida to Spain to Hong Kong to the Philippines and then to California.

4. Ms. Harris has no benefits, no life insurance, no pension, and no future security beyond her share of the family assets.

5. Ms. Harris is unlikely in the short term to achieve self-sufficiency. If Ms. Harris is able to complete a real estate course, she will be part of an industry that is economy driven with a reputation for significant drop-out rates.

6. Mr. Harris' tax-free and off-shore existence will make it difficult for Ms. Harris to rely on monthly periodic payments.

[2] The parties started their married life in 1986 with few, if any, assets. Ten years later, they had over $1 million (U.S.) in a Swiss bank account and lived a fairly luxurious lifestyle. The bank account has dwindled to less than $30,000.

[3] Ms. Harris in her evidence focussed on the lavish lifestyle she once had. Mr. Harris focussed on the rise and fall of his income in telemarketing and investor relations and Ms. Harris' excessive shopping habits. Ms. Harris argues that Mr. Harris is not credible, that he "ran his affairs like one big ball", and that all of his business assets, primarily a brokerage account, should be considered family assets.

Background

[4] The parties were married in Banff, Alberta in May 1986 when Ms. Harris was 22 years old and Mr. Harris was 29.

[5] Ms. Harris was raised in Calgary and has a grade 11 education.

[6] Mr. Harris attended junior high school in Arizona before moving to Calgary. He dropped out of school in grade 11 and went to work in a steel mill. He saved money and travelled for 10 months throughout Asia. When he returned to Canada he took jobs that ranged from truck driving, to working at McDonalds, and selling cars. He was a car salesman when the parties met and married.

1986-1989: Telemarketing in Spain and Hong Kong

[7] Shortly after they were married, Mr. Harris worked as a floor tiler in Florida, but found the work too physically demanding. He began training as a stock broker when a friend offered him a job telemarketing with Indigo Investments in Torremolinos, Spain. The couple had only $500 and no credit. Mr. Harris purchased an airline ticket on his mother’s credit card and gave the $500 to Ms. Harris so that she could travel to Spain ahead of him and stay at a friend’s place. Mr. Harris worked for another six weeks, saved about $2,500, and joined his wife in Spain in October 1986. He immediately began work as a telemarketer persuading prospective clients to purchase stock in companies. He earned $5,000 in his first month.

[8] The couple returned to Calgary for a summer vacation in 1987. Shortly after they returned to Spain, they moved to Marbella, Spain when Mr. Harris became the telemarketing sales manager for Equity Management Services ("EMS"). For his work Mr. Harris received a percentage of the business and a salary of about $10,000 a month. The job ended abruptly after about a year when the payroll failed to materialize. However, EMS' telemarketing team was offered similar work in Hong Kong starting the following week.

[9] Within a few days the parties moved from Spain to Hong Kong and within five months, Mr. Harris' commission income was back up to $10,000 a month. However, eight months later, the Hong Kong Securities and Exchange Commission (SEC) forced the telemarketing operations to shut down. Mr. Harris tried working for a similar operation in Macau but the parties found working and living in Macau extremely uncomfortable. After about a month the parties decided to leave Macau and use their $100,000 in savings and travel.

1989-1990: Travelling and Living off Savings

[10] The parties travelled to the Philippines, Indonesia, Thailand, Europe and London. They returned to Calgary in February 1990 with about $35,000. They spent $20,000 for a 1989 GMC four wheel drive so they could go skiing, and by the summer of 1990, they had used up all of their savings.

1990-1997: Hong Kong and the Philippines

[11] Around August 1990, Bryant Cragun, a former senior vice-president with Goldman Sachs, sought Mr. Harris' assistance in setting up a telemarketing operation in Hong Kong. After borrowing $5,000 from his father the parties moved to Hong Kong in October 1990 and Mr. Harris started work. Just four months later, the Hong Kong SEC caused the telemarketing operations to close.

[12] The parties and Mr. Cragun travelled through Singapore, Jakarta, Bangkok, and the Philippines looking for another jurisdiction in which to live and establish a similar telemarketing operation. Mr. Cragun chose the Philippines where Oxford International Management ("OIM") began operating as a U.S. equity fund manager.

[13] OIM began operations in April 1991, and within four months, Mr. Harris' salary doubled to $10,000 (U.S.) a month, plus a business override and a percentage of the sales he generated. By the end of 1991, Mr. Harris' earnings approached $15,000 a month. By 1993 OIM had grown to fifty employees and Mr. Harris earned over $250,000 (U.S.) annually.

[14] In 1993 Mr. Harris incorporated United Holdings Ltd. (“United Holdings”), an off-shore company, in order to open a joint bank account with Swiss Bank Corp. in Geneva, later the Union Bank of Switzerland (the ”UBS account”). He explained to Ms. Harris about the UBS account and where the UBS account documents were located. The parties are equal shareholders in United Holdings.

[15] By 1995 OIM had offices in Spain, Brussels, Taipei, Indonesia, and Bangkok, and Mr. Harris' earnings were upwards of $500,000 (U.S.) annually.

[16] Other than the occasional modelling job, Ms. Harris did not work. However, she took Spanish lessons in the Philippines for four months, and spent her time shopping, playing tennis, travelling with Mr. Harris, flying to Hong Kong to have her hair done, and looking after the house and staff. The parties had a maid, gardener, part-time carpenter, dog walker, and a driver who drove Mr. Harris to work, and then returned to the house to drive Ms. Harris wherever she wanted to go.

[17] The couple went to Italy for Ms. Harris' birthday each year, and to the Four Seasons Resort in Bali each Christmas. They stayed at some of the world's top hotels and each summer returned to Calgary and the Okanagan to visit their families.

[18] During the beach season from November to April the parties spent their weekends on Boracay Island about an hour and a half from Manila. Mr. Harris bought a boat they could use on the weekends. However, after recognizing the effort involved in pulling the boat in and out of the water every weekend, he started a small aquasports business. Mr. Harris invested approximately $200,000 in boats, jet skis, and other equipment, and built a small beach house upstairs from the aquasports business that had up to five employees. Mr. Harris made no money from the venture. As he stated, it gave them a lot of enjoyment for three or four years, but otherwise, the business lined the pockets of others.

[19] During the beach season, Mr. Harris' business colleagues, most of whom were expatriates, arrived at the beach house on Fridays after work. Ms. Harris was a good hostess and looked after the wine and cheese and other appetizers.

[20] Ms. Harris also helped arrange OIM's annual Christmas party which had as many as 400 people attending. She also helped Mr. Harris entertain at home at least twice a month.

[21] Mr. Harris invested approximately $85,000 in a small restaurant known as Rama Mahal in Subic Bay that Ms. Harris helped decorate. The parties agree that the restaurant is a family asset valued at $30,000 (U.S.) and that it will be retained by Mr. Harris.

[22] Mr. Harris' work included travel, and meeting clients and prospective clients for lunch or dinner. He often brought Ms. Harris along with him at dinners. He considered his wife an asset, because together, they were an attractive, well-dressed couple. Ms. Harris enjoyed the travelling and being able to use her credit cards "freely", but otherwise she took almost no interest in her husband's work or their finances.

The House in Osoyoos

[23] In 1995 the parties purchased from Ms. Harris' step-father, Ted Takacs, one acre of his Osoyoos orchard for $115,000. Their initial plan was to build a 3,000 square foot retirement home for approximately $500,000. Construction started in 1995 and completed in 1996. During that time, the parties lived in the Philippines so most of their directives to the contractor or architect went by fax.

[24] The house grew to 6,000 square feet, with seven bathrooms and marble flooring throughout, including the mechanical and laundry rooms. Ms. Harris had the outdoor dining area copied after the Four Seasons Resort in Bali; chandeliers cost $35,000, and a wrought iron staircase cost $40,000.

[25] In the summer of 1998 the parties began furnishing the house. A desk for Mr. Harris' home office cost $25,000 and Ms. Harris insisted on purchasing five Versace carpets for more than $100,000. Mr. Harris estimated they spent $250,000 furnishing the house. All of it came from their UBS account.

[26] The final cost for constructing and furnishing the house was over $3 million. The house was appraised at $1.7 million in January 2006. This appraisal is the average of an estimated market value of $1.5 million using the direct comparison approach, and $1.9 million using a cost approach.

[27] The comparison approach was based on three comparable sales in the Penticton area because no comparable sales exist in the Osoyoos area. It is the most expensive house in Osoyoos and would likely take months to sell if it were listed for sale.

[28] Ms. Harris testified that she wanted to retain the home but said that she would not remain in Osoyoos but would likely return to California if she does not get the home. In closing argument, Ms. Harris did not seek to retain the home but sought seventy per cent of the net equity in the home based on a value of $1.,9 million.

1997: Del Mar, California

[29] By 1996 OIM had over 10,000 clients, but Mr. Harris was under tremendous pressure as the markets began a downward turn and he was forced to deal with unhappy investors. He needed and wanted a change.

[30] Mr. Cragun was opening an investment banking business in San Diego, and Mr. Harris saw that as an opportunity to expand his knowledge of investment banking. Mr. Harris felt comfortable starting a new life in California and accumulating more wealth. Their UBS account had reached over $1 million (U.S.) and they had paid cash for the house in Osoyoos, although it still had to be furnished.

[31] In October 1997 the couple moved to Del Mar, just outside of San Diego, and rented a 3,200 square foot ocean view home for $4,750 a month.

[32] After Mr. Harris had received two pay cheques for a total of $20,000 (U.S.), around the fall of 1997 Mr. Cragun decided he wanted Mr. Harris to help him support the public companies he had invested in and work in investor relations ("IR") rather than investment banking.

[33] In December 1997 Mr. Harris purchased a 1998 Porsche 911 for $96,000 (U.S.) and in January 1998 he ordered a 1998 540 BMW for $65,000 (U.S.). The money came from their UBS account.

The Osoyoos Vineyard

[34] Sometime in 1998 Mr. Takacs convinced Mr. Harris to become a partner in his vineyard and enter into an option to purchase a portion of his property when it could be subdivided. In the last four years, the parties have spent $350,000 in equipment and grapes for the vineyard, but the venture has gone sideways. The parties have jointly commenced litigation against the Takacs and agreed that they will share equally in any resulting proceeds.

1998-1999: Veritas Communications

[35] In the spring of 1998, Mr. Harris began operating Veritas Communications, an IR firm in Vancouver, and six months later, he also began operating an IR firm in Solana Beach near San Diego. He spent Tuesday to Friday in Vancouver, and Saturday to Monday in Del Mar.

[36] Veritas leased a vehicle for Mr. Harris, and an apartment in Vancouver where he and other Veritas employees stayed when they were in town.

[37] Starting in the summer of 1998 the parties used their house in Osoyoos as a summer home and Mr. Harris continued to commute extensively. The full-time maid that the parties had in the Philippines for seven years came to work in Del Mar and Osoyoos during the summers.

[38] Other than the $20,000 in salary earned in the fall of 1997, and approximately $23,000 which represented a one per cent override on the operations in the Philippines that Mr. Cragun had agreed to pay him for six months following his departure from the Philippines, Mr. Harris received no other income in 1997. The parties lived off their UBS account.

[39] Mr. Harris explained how the IR business works:

Investor relations works like any other business. I go out and find product, stock or companies that are looking to promote their shares, give it more value, more visibility, and they will pay me in either stock or cash for those services. When the stock is given to me its not necessarily my stock; it's stock to be used to generate income to provide marketing services, and if a contract is cancelled, then quite often I will have to send the stock back, because the contracts are over normally three months, six months or a year periods. Once the stock is sold I create income and then I use that income to provide marketing services, telemarketing services, email services, direct mail services, a whole number of ways. I get them listed on foreign exchanges, such as Frankfurt, Berlin, the AIM Exchange in London, which all require costs, and at the end of the day its like running a grocery store. Once I have created the revenue, I spend whatever it takes to get the job done and I anticipate, you know, maintaining at the end of the day at least a 20% profit margin, and if things go well, a 40% margin, and if the stocks or company does exceptionally well and the stock actually goes up dramatically in value, possibly a lot more than that. And then the opposite side: if the stock or company is failing for one reason due to economic conditions or not hitting their financial targets, their stocks go down, and so then my profit margins sometimes completely evaporates. So it's a risky business and to a certain degree a stressful business.

[40] Mr. Harris received no income and drew no salary in 1998 or 1999 as the "war chest" of stock grew and he anticipated recovering a large profit or equity position in the companies Veritas was promoting. At its peak, Veritas had more than 20 employees and monthly overhead of over $100,000. At times the overhead exceeded profit, and Mr. Harris lent the company money to meet its payroll.

[41] Ash Katey is a chartered accountant who looks after a number of IR firms. Mr. Katey's explanation as to how IR firms generally operate is consistent with Mr. Harris' statement:

Q And is there a business model that investor relations people use when conducting their business?

A Well, generally the standard way will be that the investor relations person will receive a lot of shares from either the public company or, more often, from the principal shareholder of public company as an inducement to start working in increasing the price of those shares in the stock market. As the price goes up, then he can sell those shares, receive the cash, pay for the expenses, and it, of course, benefits the principal shareholders who have stock shares in those companies to now get larger sale price for their shares. From the sale price of shares, then they pay their expenses, subcontractor, and all the other things, but almost all the time the remuneration depends on how well the share prices do. If they go down and down and down, they may not have enough money to pay all their expenses. If they go up, they will become rich.

[42] Mr. Harris did not become rich. The shares were almost worthless by the time he was able to trade them. For example, ZiaSun Technologies Inc. traded between $3 and $5 a share when Mr. Harris received several thousand restricted shares as compensation under the terms of an IR contract. The stock went as high as $30. By the time the shares became freetrading in late 1999 they had plunged to $0.30 a share.

[43] When Mr. Cragun retired in 1999, Rory Boyce-Varley, an internet marketing specialist, became Mr. Harris' business partner in Veritas. The financial prospects for 2000 looked promising when Trademex placed a million shares in escrow, and Internet Studios promised two million shares. However, in 2000 things went from bad to worse. Internet marketing started its downward spiral, Trademex was de-listed, and unbeknownst to Mr. Harris, Mr. Boyce-Varley swapped Internet Studios restricted shares for freetrading shares and sold them. Mr. Harris returned from California to find that his partner had cleaned out his office and apartment, and left the country.

[44] In 2000 Mr. Harris' income was only $12,700 plus $85,000 in loan repayments from Veritas. By the end of 2000 the UBS account stood at $631,000.

[45] In early 2001, with tax losses of $888,632, and unpaid payroll taxes of over $10,000, Veritas ceased operations.

[46] Throughout these difficult financial times, Mr. Harris tried to explain to Ms. Harris that they had to live with less, but Ms. Harris refused to listen, and continued with her shopping habits.

2001: IMI Net Media

[47] In 2001 Mr. Harris started IMI Net Media, a small IR company with two employees. It had one or two clients that Mr. Harris hoped would be sufficiently successful so his company could profit.

[48] In March 2001 United Holdings opened a brokerage account with Research Capital, a Canadian brokerage firm which Mr. Harris used to place stock that he received as compensation for his IR work. Unfortunately, the stock market for internet companies was still depressed, and IMI Net Media ceased operating in early 2002 with net losses of $187,338.

[49] Mr. Harris' only income in 2001 was $10,000. By the end of 2001 the parties had spent more than $300,000 of their savings. They could not afford to travel in 2000 or 2001, but Ms. Harris' passion for high-end designer fashions continued undeterred. She spent around $100,000 on clothes and merchandise in 2000 or 2001.

The Separation

[50] The parties separated in September 2002 after 16 years of marriage.

[51] Unable to afford the cost of two homes, Mr. Harris ended the tenancy on the house in Del Mar. The household contents were packed and shipped to their home in Osoyoos. Ms. Harris' statement that she "did it all myself without any help from Mark" is an exaggeration. Mr. Harris paid $20,000 in moving costs that included three men who took two days to pack the household contents. Ms. Harris' mother helped Ms. Harris pack her personal belongings.

[52] Since October 2002, Ms. Harris has resided in Osoyoos.

[53] Daniel Munroe, the landlord of the house in Del Mar, obtained judgment against the parties for $11,600 (U.S.) for the unexpired term of the lease and registered the judgment against the Osoyoos property.

[54] The parties have a joint bank account at the CIBC branch in Osoyoos. At the time of separation their line of credit stood at $59,000. In November 2002 Ms. Harris withdrew $25,500 from the line of credit. She used $6,000 for plastic surgery and the balance for living expenses. In January 2003 Mr. Harris began depositing regular monthly payments of $5,000 (U.S.) a month into the CIBC account. From that Ms. Harris pays $2,370 a month for the mortgage, house insurance, and utilities. In addition to the $60,000 (U.S.), Mr. Harris also pays for the property taxes, Ms. Harris' car insurance and repair costs, the house, pool, and garden maintenance expenses, including the wages and accommodation expenses of the gardener for six months of the year, for a total of close to $100,000 each year since separation. Ms. Harris has also spent an additional $80,000 from the joint line of credit since separation.

2003-2004: Mr. Harris Returns to Work in Spain

[55] In February 2003 Mr. Harris sold the 1998 Porsche for $65,000. On February 17, 2003 he opened a Bank of Montreal account, deposited the $65,000 and transferred $10,000 to pay for the parties’ outstanding debt in their Wells Fargo account in California.

[56] At the beginning of 2003 there was only $127,000 remaining in the UBS account. Due to his lack of financial success in Vancouver, Mr. Harris returned to Marbella, Spain as a United Holdings consultant, to set up offices for Global Asset Advisors. At the same time he began a common law relationship with Jonni Sissons.

[57] Mr. Harris found the work environment in Spain much more difficult and competitive than before. From his 2003 gross revenue of $273,000 that he deposited into the UBS account, roughly $153,000 remained after operating expenses, including office overhead and the salary of three employees. Mr. Harris sent $97,000 to Osoyoos, which included $5,000 (U.S.) per month for spousal support in addition to money for property taxes and house maintenance. That left Mr. Harris with under $60,000 to support himself and Ms. Sissons. He supplemented this amount with $7,000 withdrawn from the UBS account and approximately $40,000 in gains generated in the Research Capital account. That year, Mr. Harris also paid $7,000 in legal fees incurred by Ms. Harris to defend a driving offence.

[58] In 2004, Mr. Harris generated gross revenue of $335,000, out of which he paid operating expenses of $150,000. He again sent $97,000 to Osoyoos, leaving him with about $88,000. He supplemented this amount with $38,000 from the UBS account, reducing its balance to below $100,000. On January 24, 2004, Ms. Sissons gave birth to their son in Malaga, Spain. The cost for hospital care was approximately $25,000, leaving Mr. Harris with about $100,000 to support himself, Ms. Sissons, and their newborn.

[59] In June 2004 Mr. Harris and his new family returned to Canada. He became a Canadian resident on June 27, 2004. Until then, and for most of the marriage, Mr. Harris had been a non-resident. He began working as an IR consultant and using the United Holdings brokerage account Research Capital for his business dealings. In the fall of 2004 he became the sole shareholder of Skylla Capital Corp. and rolled into that company the IR contracts he entered into that year. His income from Skylla from June 2004 to June 2005 before tax amounted to $133,588. His income for the calendar year 2005 is approximately $130,000. He anticipates earning the same income in 2006.

Allegation credibility and allegations of non-disclosure.

[60] A constant and strident theme throughout the trial was that Mr. Harris made late disclosure or failed to disclose. A similar theme was Mr. Harris’ “ability to spin tales” and his lack of credibility. There is no doubt from the manner in which this trial was conducted and from Ms. Harris’ evidence that Ms. Harris sought to establish that Mr. Harris has a greater income and more assets at his disposal than he has disclosed.

[61] I observed Mr. Harris testify for more than four days. He answered the questions as best he could; he was not evasive. If there were any inconsistencies in his answers, they were minor discrepancies that he was able to explain. His evidence regarding his financial affairs was uncontradicted. I was impressed with his ability to recall dates and events and understand and recall voluminous financial records. Although Ms. Harris and her counsel tried to paint a portrait of a man who evades his taxes and bills, hides his assets, and cannot be believed, I find Mr. Harris to be credible. If there is any conflict between the evidence of Ms. Harris and Mr. Harris, I prefer the evidence of Mr. Harris.

[62] Ms. Harris struck me as quite uninterested in Mr. Harris’ business dealings or their finances during the marriage. She resolutely denied knowing anything about their finances, his work, or even why they moved from Spain to Hong Kong or elsewhere. Her answers were generally along the lines of “I had nothing to do with his office things”.

[63] For example, Ms. Harris testified that Mr. Harris told her that he had a Banco Italiano account. She said that they were out for dinner with a Banco Italiano banker and his wife when the banker said that Mr. Harris could not open an account with less than $1 million. Ms. Harris also said that she found the Banco Italiano account number from a printout from Mr. Harris’ Palm Pilot. There is however no Banco Italiano account.

[64] Mr. Harris explained the situation. He said that a UBS bank manager he had been working with left UBS to work for Prime Partners where they had higher capital limits of $1 million. He was interested in Mr. Harris’ business, but Mr. Harris was not interested in changing banks. Similarly, a bank manager at UBS went to work for Banco Italiano. He tried unsuccessfully to encourage Mr. Harris to move his account to Banco Italiano. Mr. Harris told Ms. Harris that they should have just one savings account and that it should remain at UBS.

[65] This is not a case where one spouse has kept details of his or their finances from the other spouse. This is a case where one spouse has repeatedly tried to explain details of their finances, but the other spouse was not interested in listening.

[66] This action was commenced in June 2004. The statement of defence was filed in March 2005. Ms. Harris was not examined for discovery. Mr. Harris was examined for discovery in July 2005. There were no interim applications. In October 2005 Mr. Harris delivered to the lawyer for Ms. Harris four large bankers’ boxes containing Veritas documents, cancelled cheques, GST records, banking records, financial statements, credit card statements, wire transfers, and all of the other document records that Mr. Harris was able to obtain up to that date.

[67] Mr. Harris has made more than reasonable efforts to obtain documents from the Philippines, Spain, Switzerland, California, and every place in the world he has worked or opened a bank or credit card account in the last several years, including documents of the companies that he has worked for. Understandably, it took time to obtain some of the documents. Mr. Harris was unable to obtain other documents, such as OIM's tax filings in the Philippines despite a concerted effort. Almost as soon as Mr. Harris received documents as a consequence of his search, his counsel delivered a supplemental list. Mr. Harris has produced his sixth supplementary list of documents.

[68] Mr. Harris was not examined for discovery on any of the documents contained in the four bankers' boxes. At trial he was taken almost line by line through credit card statements, bank statements, cheques, and financial statements, on the basis that it was necessitated by Mr. Harris' late disclosure. However, the cross-examination failed to shed any light on any assets that Mr. Harris has not otherwise disclosed.

[69] In preparation for trial, Mr. Harris cross-checked hundreds of documents in order to reconcile all of the funds in his Bank of Montreal account. In extensive cross-examination, he was able to state what each cheque was for, the source of the funds, and how to read various banking documents, including UBS account statements. None of his material evidence was contradicted.

The Brokerage Accounts

[70] Ms. Harris alleges that Mr. Harris avoids paying taxes, has an off-shore existence, “ran his affairs like one big ball”, and intermingled his personal and business assets. She therefore contends that all of his business assets, particularly the Research Capital brokerage account, should be considered family assets. Ms. Harris produced various schedules showing large sums of money going in and out of the Research Capital and other accounts. However, I found the schedules alone, without explanation, to be meaningless.

[71] Mr. Harris produced tax returns and financial statements for Veritas, IMI Net Media and Skylla. He said that he filed tax returns in the Philippines and described his unsuccessful efforts to obtain copies of the tax filings made in that country. Based on advice from an accountant in Spain, he understands that he has five years within which to report income.

[72] Mr. Katey testified that Mr. Harris only needed to declare income earned in Canada after June 27, 2004. Mr. Katey helped prepare Mr. Harris’ 2004 personal tax return and Skylla's corporate tax return. Over the course of three meetings between Mr. Harris and Mr. Katey or his assistant, Mr. Katey carefully reviewed and questioned various IR contracts, receipts, banking documents, credit card statements, transfers in and out of the different accounts, including UBS account records, chequebooks, the Research Capital account, and Veritas’ loss of over $800,000, in order to determine to his satisfaction which expenses and items were personal to Mr. Harris and which were business related. Except for one unrelated question, Mr. Katey was not cross-examined. I accept his evidence.

[73] Between February 2002 and August 2005 all of the cheques issued from the Research Capital account totalling close to $174,000 in Canadian funds and $247,000 in U.S. funds went towards IR contract obligations. No funds from any of the parties’ bank accounts, including the UBS account, or another personal bank account, were deposited into the Research Capital account.

[74] While United Holdings was incorporated off-shore, I do not find that Mr. Harris otherwise has an "off-shore existence". I am satisfied that he has made full financial disclosure, and that his current annual income is approximately $130,000. As his counsel asked rhetorically during closing argument: “If Mr. Harris was truly trying to hide his income, why would he deposit his 2003 and 2004 income into the UBS account? Why not open a secret account and deposit monies there?”

[75] Ms. Harris contributed neither directly nor indirectly to the Research Capital account. I am satisfied that the Research Capital account is an excluded business asset and not a family asset.

Ms. Harris' Spending Habits during the Marriage and since separation.

[76] Ms. Harris testified about expensive jewellery Mr. Harris bought during their marriage, her personal shopper, and her ability to buy Versace, Dolce & Gabbana and other expensive designer clothes on sale.

[77] Mr. Harris testified about closets so full of her clothes and shoes that he had little room in a closet for more than one shirt. He complained that she would not listen when he tried to talk to her about their finances, the cost of maintaining two expensive homes, and the need to reduce her spending. Ms. Harris continued to shop and spend as she always had.

[78] In August 2002, shortly before separation, Ms. Harris insisted that Mr. Harris come with her to Saks Fifth Avenue because she wanted an $8,000 full length mink coat. An argument ensued over the coat, and Mr. Harris stormed out knowing that Ms. Harris’ Saks Fifth Avenue credit card was at its maximum limit. Undeterred, Ms. Harris opened another Saks Fifth Avenue account and purchased the coat. The account remains unpaid. When asked about the account, Ms. Harris’ retort was that Mr. Harris has a habit of not paying his accounts.

[79] Ms. Harris swore two Financial Statements. The Financial Statement she swore in November 2005 lists total annual expenses of $218,424 which she describes as her “lifestyle before separation”, including $3,000 a month for clothing, and $537 a month for hair care and cosmetics. The Financial Statement she swore on April 21, 2005 lists total annual expenses of $97,572 or what Ms. Harris describes as her “bare minimum” including $1,000 a month for clothes and $500 a month for hair care and cosmetics.

[80] Mr. Harris argues that Ms. Harris' profligate spending habits contributed only to the depletion of the parties’ assets rather than to the acquisition, preservation or maintenance of the assets.

[81] There is no doubt that Ms. Harris has a clothes buying habit, but it is not the function of this court to delve into the parties’ spending habits during the marriage. Her expensive clothes and jewellery are not considered by the parties to be a family asset but they are a factor that may be taken into account in apportioning the family assets under s. 65(1)(f) of the Family Relations Act, R.S.B.C. 1996, c. 128: see Uchikoshi v. Suzuki, 2004 BCSC 1763 at ¶ 49-53. In my view this must be so because the credit card debts that were incurred by Ms. Harris prior to separation and up to the triggering event, including the Saks Fifth Avenue credit card debt for the fur coat are agreed to be family debts. It is appropriate to consider the purpose for which family debt was incurred in determining an apportionment of the family assets: Mallen v. Mallen (1992), 40 R.F.L. (3d) 114 at 117, 65 B.C.L.R. (2d) 241 (C.A.).

The Assets and the Liabilities

[82] A s. 57 declaration was made on April 21, 2005. The parties are entitled to an undivided half interest in the family assets as of that date, subject to any reapportionment.

[83] The family assets, excluding the former matrimonial home, are as follows:

ASSETS

ITEM
VALUE
(CDN Dollars)
RETAINED BY

1998 BMW 840
$24,000.00
Plaintiff

CIBC Account #72-56337
$1,869.31
Plaintiff

Dzigurski Painting
$10,000.00
Plaintiff

Versace carpets
$50,000.00
Plaintiff

1991 BMW 850
$15,000.00
Defendant

1998 Yamaha Scooter
$2,100.00
Defendant

21 Foot SeaRay Boat
$20,000.00
Defendant

CIBC USD Account Term Deposit
$109,973.22
Defendant

UBS Swiss Account
$34,296.00
Defendant

Thai Oil Painting
$10,000.00
Defendant

Persian carpets
$50,000.00
Defendant

Shares in Rama Mahal Restaurant
$34,296.00
Defendant

Other household contents, excluding clothing and jewellery
To be determined by inventory and valuation
Plaintiff and Defendant equally

Value of assets retained
$85,869.31
Plaintiff

Value of assets retained
$275,665.22
Defendant

[84] The family debts are as follows:

DEBTS

ITEM
AMOUNT
(CDN Dollar)

CIBC Mortgage (as of May 19, 2005)
$233,875.00

CIBC Joint Line of Credit
$119,694.50

CCRA owing by Mark Harris
$9,711.00

Property Taxes owing
$4,227.33

Del Mar landlord's judgment
$19,958.11

Taxes payable by Mr. Harris on 2004 income
$17,995.00

Ms. Harris' credit card debt
$42,796.46

Mr. Harris' credit card debt
$29,591.08

TOTAL DEBTS TO BE DIVIDED
$477,848.48

[85] I have not included in the assets the proceeds of the 1986 and 1988 Porsches as Ms. Harris would like because they were sold before the triggering event and the proceeds were used by Ms. Harris or otherwise used for the Osoyoos property for a family purpose.

[86] As I indicated earlier, while I do not include Ms. Harris’ fur coat or jewellery worth approximately $100,000 in the family assets, it is appropriate to consider their value, because they were purchased with family assets and some of the purchases remain a family debt. Mr. Harris’ four brokerage accounts, including the United Holdings account with Research Capital, are excluded business assets. The gross value of these brokerage accounts as of December 31, 2005 was $51,460.36. Finally, while United Holdings is a family asset, the shares currently have no value. Mr. Harris will retain the shares in United Holdings, Veritas, IMI, and Skylla, all of which have no value.

Ms. Harris’ Claim for Reapportionment and Support

[87] Ms. Harris seeks seventy per cent of the net equity of the former matrimonial home based on a value of $1.9 million and $200,000 in lump sum spousal support. Her claim appears to be based primarily on need.

[88] Mr. Harris is willing to pay Ms. Harris one-half the $1.9 million value of the matrimonial home which is $200,000 above the appraised value and lump sum spousal support of $100,000. However he requires time to organize his affairs in order to raise the funds to do so.

[89] The Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), provides:

Objectives of spousal support order

15.2(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[90] The Family Relations Act, R.S.B.C. 1996, c. 128, provides:

Judicial reapportionment on basis of fairness

65(1) If the provisions for division of property between spouses under section 56, Part 6 or their marriage agreement, as the case may be, would be unfair having regard to

(a) the duration of the marriage,

(b) the duration of the period during which the spouses have lived separate and apart,

(c) the date when property was acquired or disposed of,

(d) the extent to which property was acquired by one spouse through inheritance or gift,

(e) the needs of each spouse to become or remain economically independent and self sufficient, or

(f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse,

the Supreme Court, on application, may order that the property covered by section 56, Part 6 or the marriage agreement, as the case may be, be divided into shares fixed by the court.

Obligation to support spouse

89(1) A spouse is responsible and liable for the support and maintenance of the other spouse having regard to the following:

(a) the role of each spouse in their family;

(b) an express or implied agreement between the spouses that one has the responsibility to support and maintain the other;

(c) custodial obligations respecting a child;

(d) the ability and capacity of, and the reasonable efforts made by, either or both spouses to support themselves;

(e) economic circumstances.

(2) Except as provided in subsection (1), a spouse or former spouse is required to be self sufficient in relation to the other spouse or former spouse.

[91] Under s. 65 of the Family Relations Act, it is necessary to determine whether an equal division of the assets would be unfair.

[92] The duration of the marriage was 16 years which by itself would tend towards equality of division (see S.B.M. v. N.M. (2003), 14 B.C.L.R. (4th) 90, 2003 BCCA 300 at ¶ 23). The parties have been apart for three and a half years. During this time Ms. Harris has been supported by Mr. Harris. She recognizes that she is required to become self-sufficient, but her conduct indicates otherwise.

[93] Ms. Harris was 38 years old when the parties separated in September 2002. Other than working as a receptionist for four months before the marriage, and the occasional modelling assignment during the marriage, she has no work history. While Ms. Harris says that Mr. Harris never asked her to work during the marriage, he encouraged her to work at OIM’s offices in the Philippines when she frequently said that she was bored. When she expressed an interest in importing furniture from Bali to the Okanagan, he set up a company and a bank account for her, but that is as far as it went. There is no evidence that Ms. Harris wanted to advance her education or work skills during the marriage. Nonetheless, I accept that during the marriage, both parties assumed that there was no necessity for Ms. Harris to work or further her education.

[94] In February 2003 Mr. Harris offered to pay for Ms. Harris to take various aptitude and interest tests through the Women’s Resource Centre at UBC to help her determine what work she might be suited for or interested in. She has refused his offer.

[95] Mr. Harris has suggested avenues Ms. Harris might explore, such as being a veterinary assistant, because she loves animals, or being a personal shopper, because she has exquisite taste and enjoys interacting with people. He has offered to pay for any training programs that would assist her in becoming self-sufficient. Instead she has taken no real steps towards finding work or training because she claims she is too emotionally distraught from moving and unpacking in 2002, not knowing where Mr. Harris was at times, and learning about his girlfriend.

[96] While there is no doubt that Ms. Harris was distraught over the break up of the marriage, there is no medical evidence that she is physically or emotionally unable to take at least some steps towards becoming economically independent. She has no child care obligations. I recognize it will be more challenging for her to become self-sufficient at this point in her life than it would have been had she not met and married Mr. Harris. However it could also be said that given her education and work history, she has been economically advantaged by the marriage and its breakdown.

[97] Having considered the applicable factors enumerated, I do not find that an equal division of the assets would be unfair.

[98] Ms. Harris is entitled to one-half of the net value of the matrimonial home remaining after payment of the family debts. The home is appraised at $1.7 million. For the purpose of equalizing the family assets, I fix the value of the home at $1.9 million. Mr. Harris will have ninety days within which to pay Ms. Harris one-half of the net value of the home after payment of the family debts based on a value of $1.9 million. Ms. Harris shall deliver vacant possession to Mr. Harris within sixty days of her counsel's receipt of written notification that the buyout will proceed. In the event that Mr. Harris is not able to purchase Ms. Harris' interest, the home shall be listed for sale with joint conduct of sale, with liberty to either party to apply to court for directions regarding the sale.

[99] While the standard of living during marriage is a relevant consideration in determining spousal support, Mr. Harris is not required to fund the lifestyle to which Ms. Harris became accustomed to during the marriage. Spousal support is affected by the paying spouse’s ability to pay. The parties’ earn-and-spend lifestyle was contingent: Mr. Harris rode the internet marketing wave and crashed with it. They spent beyond their means.

[100] Since their separation, Mr. Harris has paid $5,000 (U.S.) a month in spousal support and in addition, he has paid for maintenance of the Osoyoos property, property taxes, Ms. Harris' car insurance, and gardener’s wages. His total annual support of nearly $100,000 for the past three years exceeds fifty per cent of his annual income, well in excess of the Spousal Support Guidelines. In addition, Ms. Harris has used and increased the line of credit by approximately $60,000. The time has come where Ms. Harris must learn how to live with less, and how to earn a living on her own.

[101] I award Ms. Harris spousal support of $150,000 to be paid in two equal installments on January 1, 2007 and January 1, 2008.

[102] Ms. Harris requested payment by Mr. Harris of fees for her to take a real estate course. She has "looked into" being a realtor because a girlfriend has two real estate franchises. I decline to make this award, because I see no reasonable prospect of Ms. Harris taking the course and remaining in B.C.

Conclusion

[103] In conclusion:

1. The parties will retain the family assets as set out at paragraph 83.

2. Ms. Harris is entitled to one-half of the net value of the matrimonial home set at $1.9 million, after payment of the family debts set out at paragraph 84. Mr. Harris will have ninety days within which to pay Ms. Harris her share of the asset. Ms. Harris shall deliver vacant possession to Mr. Harris within sixty days of her counsel's receipt of written notification that the buyout will proceed. In the event that Mr. Harris is not able to purchase Ms. Harris' interest, the home shall be listed for sale with joint conduct of sale, with liberty to either party to apply to court for directions regarding the sale.

3. Ms. Harris will receive spousal support of $150,000 to be paid in two equal installments on January 1, 2007 and January 1, 2008.

4. The divorce order is granted.

5. Mr. Harris was largely successful and is entitled to seventy-five per cent of his costs.

“L.A. Loo, J.”
The Honourable Madam Justice L.A. Loo

The Female Wolf Of Wall Street: Promoter Dodi Handy aka Dodi Zirkle’s $700+ Million Pump & Her Ties With Arms Dealers, Embezzlers, Convicts & The Mafia
UPDATE: Two weeks exactly after this post appeared, DIMI is now trading at just 4 cents/share, down a stunning 98% since this expose…short sellers who took my lessons are banking, insiders who hired Dodi Handy to pump this stock so they could dump it are banking…sales of my DVDs are surging as are my October conference tickets (which is nearly sold out) since this is by far my best call (email admin@timothysykes.com for DVD specials and conference pricing/details)

Today on July 4th, 2012 we celebrate our country and its founding.

But 236 years after the signing of the Declaration of Independence, 185 years after slavery was abolished in New York, 126 years after we received the Statue of Liberty as a gift from France and 3 years after the Statue of Liberty’s crown reopened to the public, where do we stand as a nation?

I’m not into politics or economics – at all – but I’ll tell you where we stand with the US stock market and it’s ugly.

“Financial experts” and questionable media sources tout investments of their choosing in any manner of their choosing, taking advantage of the SEC’s incompetence and gullible investors with lotto ticket mentalities. The ugly facts of how most traders lose money, most stocks go down each year, most tips are full of misinformation and most penny stocks are complete scams are meticulously kept away from the mainstream public so CNBC can keep making $500+ million/year, brokers keep making billions on commissions knowing full well that most of their clientele lose every day and the corrupt Wall Street juggernaut keeps churning profits for the powerful suits who bribe politicians in exchange for favorable laws and lax regulation.

Only the ignorant, smelly and destitute dare go against such a powerful and evil empire, whining in a park…and then they got crushed by the NYPD and went back to writing poems.

But I won’t stop fighting for the rights of the suckered.

As those who watch my 7 free video lessons understand, I’ve dedicated my life to exposing scams, the ugly reality of this corrupt industry, the ugly people behind this reality and to teaching my trading challenge students how to cut through all the BS and actually profit consistently.



That’s the beauty of America; thanks to all the green and corruption, therein lies the opportunity to profit since the manipulators aren’t very smart and they underestimate us, we, their honest competition as subscribers of my 4 newsletters have now made over $4 million in profits the past few years (the figure is actually over $5.5 million now, I need to update THIS blog post from just a few weeks ago) and you can see how I’ve made nearly $3 million HERE, again, detailed trade-by-trade, just a few thousand dollars in profits at a time.

But America is a mixed bag and despite the opportunity, the bad side of America ignores rules, regulations, ethics and does whatever it can to profit, no matter who gets hurt in the process.

Such an example is Dodi Handy aka Dodi Zirkle…I bring up both names because if you just Google the name she goes by professionally, you might miss this mugshot of Dodi Handy and not get the full picture of who Dodi really is.



Dodi is the investor relations behind AWSR, a pump and dump on which Jarmall made $5,000 whle waiting in line at the DMV…he bought early during the spike and sold LONG before it tanked 99%, just as pretty much every single one of Dodi’s investor relations companies have done.

After all, Dodi is a longtime penny stock promoter, and her picks do well while she puts the press on, then they crash when insiders cash out, or the company goes bankrupt, or fraud charges are leveled, as you’ll read below has happened multiple times with Dodi’s clientele.

Dodi has decades of experience being in charge of multiple promoters’ mailing lists, creating shiny hardcopy mailers full of propaganda for companies in which her or her associates have been compensated or own shares. Here’s her bio from an old SEC filing(her current company, which is on its 4th name change as you’ll see further down in this post, biography doesn’t dare be so detailed about her promotional mailing history ??

Prior to joining CCEC, Ms. Zirkle served as General Sales Manager of Direct Response Marketing, Inc. (DRM) from November 1989 to June 1993 and later DataBase Direct, Inc., (which was acquired by DRM), two of the largest direct marketing and lettershop firms in the Southeast, where she was responsible for managing the direct marketing needs of national clientele including the National Republican Congressional Campaign Committee in Washington, D.C., TimeWarner Cable, Universal Studios – Florida and Premier Cruise Lines (The Big Red Boat(R)).

Since joining CCEC in 1993, Ms. Zirkle has served in a variety of capacities involving the Company’s operations. Initially, she was responsible for overseeing all production and operational aspects of the Company’s Inside Wall Street campaigns, in addition to managing all database marketing and list rental services. In 1995, she was promoted to Vice President of Operations where she was responsible for creating many of the logistical operating systems employed by the Company today. In 1997, Ms. Zirkle was promoted to Vice President of Corporate Sales where she assisted CCEC’s Chairman and CEO with multiple managerial tasks, the negotiation and direction of high-profile client campaigns, the development and enhancement of CCEC’s debt/equity financing source network, and the implementation of internal expansion efforts. These activities included the development of the Broker Relations Department, the enhancement of the Company’s Financial Consulting division, and the research and development of CCEC’s Market Access Program. In 1998, Ms. Zirkle was promoted to Chief Operating Officer and has since led the management buy-out of CCEC from the original founder and sole owner via the creation of Madison & Wall Financial Services, Inc.

This detailed biography helps us understand Dodi VERY well as “she assisted CCEC’s Chairman and CEO with…the development of the broker relations department” and when that Chairman and CEO, John R. Manion, as this old article entitled “ Embattled Securities Promoter Steps Down” did step down and Dodi led the employees to buyout the boiler room investor relations firm, she was quoted HERE as saying:

John Manion has been a mentor to many of us. We will miss his contributions, not just to our business, but to our lives. His proven leadership and corporate vision have served as the cornerstones on which Continental Capital has been built and upon which all future successes will be founded.

Given that John Manion was her mentor, it was his “vision” that she wanted to build upon and the fact that she created their “broker relations department”, it’s interesting to note that Manion was convicted of fraud and served time and the Bloomberg article detailing the conviction says “Legend accused of mob ties Russian, Italian crime figures linked by feds to defunct firm’s stock deals”, “On July 21, Manion settled unrelated insider trading charges filed by the SEC by agreeing to pay $40,186 and not commit securities fraud in the future.” and worse:

However, it is known that Staples had met with John Manion of Apopka. Manion reportedly stated he had associates in New York who could bolster — even control — the struggling public company’s stock price. Manion is among those named in the 15-page federal indictment; specifically for his involvement with Legend Sports.

According to the indictment, Manion, along with members of the Colombo crime family and Russian organized crime, came to control virtually all of the tradeable stock of Legend and two other publicly traded companies.

That allowed them to artificially inflate the price of Legend’s stock. Once the stock price began rising, a small army of unregistered brokers and cold callers began aggressively selling the stock at its new, high price to unwary investors.

No longer supported by brokers touting its strengths, and battered by the sudden sell-off, the stock price plummeted, leaving the new investors holding near-worthless paper.

But by then, fat commissions had enabled the boiler room operations to shave profits: The stock of Legend and the two other companies alone netted the group an estimated $10 million in profits.

Remember Dodi’s bio said “she was responsible for overseeing all production and operational aspects of the Company’s Inside Wall Street campaigns, in addition to managing all database marketing and list rental services” and this article regarding Manion’s conviction says:

“In 1996, Manion and Continental settled SEC fraud charges relating to their public relations work for First Entertainment Corp., a movie producer, in 1992 and 1993. Neither Manion nor Continental admitted wrongdoing. The SEC alleged that Continental distributed 400,000 copies of its ‘Inside Wall Street’ newsletter touting First Entertainment’s stock without disclosing that Continental was paid in shares worth more than $700,000 to write the reports. Manion and Continental agreed not to commit securities fraud in the future.”

Dodi’s current pump is DIMI, which I actually bought on the first day of the promotion at $1.07 and made some money…it’s a laughable 2-person company whose latest SEC filingshows it has no revenues and under $1 million in the bank (only because they recently sold a ton of shares at 17 cents/share, which is 1/10th of the current price) and is currently losing $100,000+ every 3 months. Yet thanks to Dodi’s “investor relations”, DIMI is valued at over $700 million…hence which I’m currently short (my subscribers of my 4 newsletters know how I expect this to play out).



Of course, as orchestrated by investor relations pro Dodi, DIMI did just use their surging stock price to acquire an app company that has done $14,000 in revenue…and despite having no real cash, no revenues, no product for sale and no real employees, DIMI, thanks to Dodi, who is listed as the press release’s contact, did commence an “awareness campaign”, which is the cause of the stock price surge.

Why promote a company with so little going for it? To sell shares of course!

Just like great pumps of the past, SPNG and POTG and dozens more, DIMI issued a press release stating they would retire/cancel some of their shares…do I believe that they actually do retire these shares?

Of course not!

No different than recent pump IDNGD (which subscribers know I shorted just before it dropped 90% in a week…blog post coming soon), these pumps mess with their share structure just to mess with short sellers and confuse the gullible into thinking the companies are real and good investments…when in reality, the companies know regulators are so incompetent and brokers are so corrupt that they can sell these “retired” shares and pretend they never existed.

This pump, like every other one of Dodi’s pumps in the past, will soon crash 90-99% no different than THIS pump based out of a barn and THIS pump hyped up by a one man operating out of this shack and his cell phone and countless more… just like these 77 pumps I mention in this video, all of which have crash 90-99% after experiencing the same kind of spiking pattern that DIMI is currently enjoying all thanks to people like Dodi and their penny stock promotion campaigns.

What I find most interesting that while Dodi and her firm are listed as the investor relations company behind DIMI, there’s no mention of her compensation nor how many shares she or her firm owns, the EXACT same problem that got her old boss and mentor, John Manion, whose vision she wanted to continue, into so much trouble int he past when their Inside Wall Street newsletter, which as Dodi’s bio states she was responsible for, didn’t include any disclaimer of how they were paid in shares worth $700,000 to write the reports.

Take a look at DIMI’s hardcopy direct-mailer, Dodi’s specialty which as you remember from her bio was her specialty as she worked with “Florida and Premier Cruise Lines (The Big Red Boat(R))” and as you can read in the disclaimer was financed by $2.4 million paid for by a company called Cloud Focus Group (another Dodi company?!?!?!)



Hmmmmmmmmmm, Dodi, am I going to get to feature another mugshot of you soon? Do you miss your mentor John Manion and want to go visit him in prison?

I don’t know if or how much Dodi and her firm are getting paid by DIMI insiders or shareholders or if she owns this Cloud Focus Group or what, but I’d appreciate greater transparency, just like I show how my students have made over $4 million in the past few years and you can see how trade-for-trade.

But promoters like Dodi Handy aka Dodi Zirkle will never be transparent because it would ruin their business.

Dodi has been pumping for decades, she’s been the main PR person for multiple frauds, in fact researching her for two days leads me to believe she is the penny stock promoter with the single most fraud clients like Allou Beauty and Healthcare where she said:

Dodi Zirkle, Chief Operating Officer of Continental Capital, stated, “To say that we are impressed with the depth and breadth of Allou, its management and its future outlook, is a considerable understatement. Everyone at Continental Capital is very excited about introducing such a fundamentally strong company to our network of investors, stockbrokers, analysts, and fund managers and looks forward to effectively educating the Street on this compelling, undervalued situation worthy of mass market awareness. Despite 13 years of consecutive profitability, significant revenue growth, and a reputation for excellence in its field, Allou currently trades at a steep discount to its industry peers. With aggressive representation of Allou and the employment of comprehensive marketing tools and resources, Continental Capital intends to play a key role in obtaining the Company broader market awareness — both domestically and abroad, enhanced market liquidity and, ultimately, a fairer market valuation.”

A little while later, Allou’s stock tanked, the company went bankrupt and executives plead guilty to fraud:

Top executives of Allou Healthcare Inc. and related companies have pleaded guilty to crimes arising from a massive corporate fraud scheme at Allou. The indictment obtained by the U.S. Attorney’s office for the Eastern District of New York detailed a staggering, decade-long bank fraud and securities fraud scheme involving hundreds of millions of dollars of phony sales and grossly inflated inventory, and a mail fraud and insurance fraud scheme arising from a fire at Allou’s Brooklyn warehouse involving a false insurance claim and the bribery of an undercover fre marshal to change the cause of the fire from “arson” to “accidental.” The related schemes resulted in losses to creditors, investors, and other victims in the amount of an estimated $160 million and ultimately drove Allou into bankruptcy.

OK, being attached to one fraud isn’t that bad,, we all make mistakes, right?

Unfortunately, Dodi’s past is VERY checkered, as she’s had dealings with Aaron Tsai, a multiple SEC offender, known for selling unregistered shares, as you can read about HERE and HERE and HERE which basically says Tsai helped convicted stock manipulator Dr. Jui-Teng Lin, who according to the SEC complaint “dumped a substantial amount of Surgilight stock on an unsuspecting public through two nominee accounts and then wired the proceeds overseas” and Tsai was finally barred from the entire brokerage business in 2010 for “based on his wrongdoing in the late 1990s through 2000 while associated with registered broker-dealers.”

Scroll down on this post and you’ll read an article from the San Jose Mercury News:

Consider the strange story of ESafetyworld (SFTY),

It’s hard to know precisely what Madison & Wall did for ESafetyworld. I couldn’t get Madison & Wall’s chief, Dodi Handy, to call me back. But just like some of its clients, Madison & Wall has an interesting history. Once called Continental Capital & Equity, the firm was founded by John R. Manion, 53, who has had a series of run-ins with securities regulators.

Though the company since has been bought out by employees who say that Manion’s problems have no relation with the firm, a close look at developments this year suggests that investors might pause before buying the stock of Madison & Wall’s clients.

Two weeks ago, Nasdaq stopped the trading in one of those companies, GenesisIntermedia (GENI) as the Securities and Exchange Commission began probing dealing in its shares by Saudi arms dealer Adnan Khashoggi. Another Madison & Wall client, Ursus Telecom (UTCC), filed for bankruptcy protection in April. That came a little more than a month after a former Ursus official filed to sell 200,000 shares while the stock enjoyed a brief rebound during a Madison & Wall-sponsored product campaign.

The SEC went after eSafetyWorld and their executives for fraud, just like Dodi’s other client Allou, saying:

In the first action, the SEC claimed that eSafetyWorld’s CEO, Edward A Heil, and CFO, R. Bret Jenkins, engaged in fraudulent schemes in 2001 involving issuance of a false press release, financial fraud and/or market manipulation. According to the SEC’s complaint, on October 19, 2001, shortly after the anthrax attacks, Heil drafted eSafetyWorld’s false press release about a supposed revolutionary anthrax-containment device. The press release had a dramatic effect on the value of eSafetyWorld shares, causing prices to increase by 413% in one day. Volume for that day shot up by 57,085%.

The SEC also alleges that Heil and Jenkins aided eSafetyWorld’s improper conduct by implementing improper revenue recognition policies and understating net losses in the Company’s financial reports.

The improper conduct apparently did not end there. In 2001, in order to manipulate the stock of eSafety, Heil purportedly directed the purchase and sale of eSafety stock and transferred $473,288 in eSafety funds to two entities, one of which he controlled. The SEC says that Heil executed a false loan agreement and provided eSafety’s auditors with a false loan confirmation to conceal the use of monies in the manipulation.

For those keeping track at home, that’s Dodi’s second fraudulent client, but the third is the biggest since that San Jose Mercury reporter mentioned GenesisIntermedia (GENI) and its ties to Saudi arms dealer Adnan Khashoggi. Adnan and this company have their own Wikipedia page and an LA Times article talks about how the SEC went after them for fraud too:

Saudi financier Adnan Khashoggi and former GenesisIntermedia Inc. Chief Executive Ramy El-Batrawi were sued by U.S. regulators over claims that they orchestrated a $130-million stock loan and manipulation scheme.

From 1999 to 2001, Khashoggi, El-Batrawi and others loaned $130 million in GenesisIntermedia’s shares to broker-dealers while allegedly artificially inflating the stock price, the Securities and Exchange Commission said Thursday. El-Batrawi failed to repay the loans when the alleged scheme collapsed, causing some of the dealer-brokers to go bankrupt, the SEC said.

(The article interestingly includes a brief passage about penny stock promoter Courtney Smith who I featured as he was paid $400,000 to promote a company based out of a UPS store whose stock fell from $1.75 to 25 cents/share in 4 days after a 2 week promotion specifically timed to inflate the price before insiders could sell (sound familiar DIMI?))

Can you guess who handled the press of GENI when “inflating the stock price”?

Interestingly, in this message board post Dodi said:

Furthermore, we do not advocate “boiler room” tactics for increasing awareness of our client companies, however we do engage in telemarketing activities to pro-actively educate the professional investment community (i.e. retail brokers, institutions and analysts) on those companies whose fundamentals and technicals meet the expressed interest criteria from individuals within that community

Our financial relations executives are highly trained and effective marketing professionals who understand the sensitivities involved in working in a highly regulated environment and one in which they exhibit only the highest levels of responsibility, integrity and professionalism. Tours of our facilities are common and encouraged.

It is our belief that in today’s sophisticated investment arena, companies can not and should not wait for the market to come to them. If they are to attract broad market appreciation for their businesses, then they must pro-actively educate this arena on the reasons why they are worthy of that appreciation. In our professional opinion, GenesisIntermedia is such a company.

Whoops!

Another fraud from Dodi’s past is Xybernaut, check out the details on that $55 million fraud here.

And there’s plenty more Dodi frauds and questionable associates, but I’ve written nearly 4,000 words today so I’ll only include a bit more.

Worse, Khashoggi, along with Ramy El-Batrawi, the principal financier behind GenesisIntermedia, Inc. (GENI) have ties with the Filipino boiler room king Amador Pastrana who has a VERY interesting feature article on him here and also Rakesh Sexana who just got sentenced to 10 years in jail for embezzlement.

What a group of winners!

OK, OK, let’s play devil’s advocate for a second, maybe Dodi just got realllllly unlucky in her dealings with arms dealer Adnan, but she learned her lesson, right?

Unfortunately, Dodi’s company Madison & Wall, as confirmed by StockLemon HERE, was also the investor relations for Junum Inc., a telemarketing company owned by Khashoggi, which also went bankrupt and was only exposed due to the boiler room operators complaining to the press they hadn’t been paid!

My trading challenge students are especially in luck tomorrow because we have a special 2-hour live trading webinar planned and DIMI might very well start dumping once people realize how it’s Dodi’s firm which is on its 4th name, that is hyping this carcass of a company with nothing else behind it and as you’ve read her past is littered with similar schemes.

PS One of my preferred brokers has had shares to short of DIMI every day this week, choose your broker carefully ??

This entry was posted in Basics, Success Stories, Testimonials, Videos and tagged Adnan Khashoogi, Amador Pastrana, Basics, Dodi Handy, Great Penny Stock Pump & Dumps, Penny Stock Promoters, Rakesh Sexana, Ramy, Success Stories, Testimonials, Tim Sykes Reviews, Timothy Sykes Reviews, Videos on July 4, 2012 by Timothy Sykes.Posted in Basics, Success Stories, Testimonials, Videos

Tags: Adnan Khashoogi, Amador Pastrana, Basics, Dodi Handy, Great Penny Stock Pump & Dumps, Penny Stock Promoters, Rakesh Sexana, Ramy, Success Stories, Testimonials, Tim Sykes Reviews, Timothy Sykes Reviews, Videos

FURTHER VINDICATION!!!!!!!!

Court Slaps Stock Message-Board Poster With Restraining Order
Posters and free-speech advocates worry a chill may settle over stock message boards.

Beth Kwon
Jan 31, 2000 10:12 PM EST

A California court Monday issued a temporary restraining order against an Internet message-board poster who made caustic postings about a bulletin-board stock.

Message-board posters reacted angrily to the decision against Floyd Schneider and predicted a chilling effect on message-board stock discussions. The temporary restraining order was issued on behalf of Bryant Cragun, a shareholder in ZiaSun Technologies ( ZSUN), who has also been a target of Schneider. And it followed a preliminary injunction filed last week against Schneider by the U.S. District Court in Washington state. That case was brought by ZiaSun.

Schneider says he'll abide by the restraining order, issued by California Superior Court in San Diego, which orders him to retract press releases and "any statements" implying ZiaSun's employees are "disreputable, dishonest, unscrupulous or engaged in criminal behavior." Says Schneider: "It's either that or going to jail."

"We don't mind criticism, but we don't like when people are twisting the truth to this level," said Mark Harris, ZiaSun's vice president of investor relations.

Schneider, who goes by "the Truthseeker" and "Floydie," started posting vitriolic missives about ZiaSun, an Internet services company based in Solana Beach, Calif., in November 1998.

"ZSUN is a very bad deal," Schneider posted on Silicon Investor on Dec. 7, 1999. Schneider has suggested that ZiaSun and its officers are "Satan bound" and that one of ZiaSun's vice presidents was a "stuttering liar." Schneider also posted press releases on his Web site, TheTruthseeker.com, reiterating a strong sell recommendation. (He says he hasn't had a position in the stock.)

Last June, the company sued Schneider for engaging in a "cybersmear" campaign. Last week's injunction prevents him from posting "false and defamatory statements" about ZiaSun and its officers. But it didn't keep Schneider quiet. "It just says I can't post anything that's not the truth," Schneider said then. "I'm very careful."

Regardless of the facts of the matter, experts say the preliminary injunction and temporary restraining order were surprising.

"I don't assume that the defendant's an angel here, but this is a very unusual type of remedy," says Lyrissa Lidsky, a professor at the University of Florida who specializes in cases dealing with message boards. "The merits of the case haven't been adjudicated yet. Usually under First Amendment doctrine, a preliminary injunction is treated as what's called a 'prior restraint,' and it's particularly disfavored under the First Amendment. There's a heavy presumption that prior restraints are unconstitutional. Now that two courts have done it is even more surprising. It sounds like a dangerous precedent is being set."

The message-board community was disheartened. "It's muzzling of dissent," posted Janice Shell, herself a Net vigilante who says she tries to expose questionable stocks, on Silicon Investor. "I'd have preferred that Floydie be a bit more circumspect in his accusations, but this really goes too far."

The only defense for message-board posters, says Jared Silverman, a New Jersey lawyer and former chief of the New Jersey Bureau of Securities, is the truth. "Basically what the case says is that people who start making accusations through various Internet methods, be it chat boards or whatever, should be very careful of what they say because they could be held accountable for it."

As for the message-board community, it could result in quieter boards. "I think it's a very bad precedent," says Jeffrey Mitchell, a Silicon Investor poster who's worked alongside Shell. "It's silencing John Doe. If you put something out on a message board, you're screwed," he says.

=====================================================================================

Oh the Vindication!! TheStreet.com were scumbags that would not tell the whole Ziasun story. Beth Kwon was very dishonest. Mark harris was a studdering liar.

=======================================================================================

Court Slaps Stock Message-Board Poster With Restraining Order
Posters and free-speech advocates worry a chill may settle over stock message boards.

Beth Kwon
Jan 31, 2000 10:12 PM EST

A California court Monday issued a temporary restraining order against an Internet message-board poster who made caustic postings about a bulletin-board stock.

Message-board posters reacted angrily to the decision against Floyd Schneider and predicted a chilling effect on message-board stock discussions. The temporary restraining order was issued on behalf of Bryant Cragun, a shareholder in ZiaSun Technologies ( ZSUN), who has also been a target of Schneider. And it followed a preliminary injunction filed last week against Schneider by the U.S. District Court in Washington state. That case was brought by ZiaSun.

Schneider says he'll abide by the restraining order, issued by California Superior Court in San Diego, which orders him to retract press releases and "any statements" implying ZiaSun's employees are "disreputable, dishonest, unscrupulous or engaged in criminal behavior." Says Schneider: "It's either that or going to jail."

"We don't mind criticism, but we don't like when people are twisting the truth to this level," said Mark Harris, ZiaSun's vice president of investor relations.

Schneider, who goes by "the Truthseeker" and "Floydie," started posting vitriolic missives about ZiaSun, an Internet services company based in Solana Beach, Calif., in November 1998.

"ZSUN is a very bad deal," Schneider posted on Silicon Investor on Dec. 7, 1999. Schneider has suggested that ZiaSun and its officers are "Satan bound" and that one of ZiaSun's vice presidents was a "stuttering liar." Schneider also posted press releases on his Web site, TheTruthseeker.com, reiterating a strong sell recommendation. (He says he hasn't had a position in the stock.)

Last June, the company sued Schneider for engaging in a "cybersmear" campaign. Last week's injunction prevents him from posting "false and defamatory statements" about ZiaSun and its officers. But it didn't keep Schneider quiet. "It just says I can't post anything that's not the truth," Schneider said then. "I'm very careful."

Regardless of the facts of the matter, experts say the preliminary injunction and temporary restraining order were surprising.

"I don't assume that the defendant's an angel here, but this is a very unusual type of remedy," says Lyrissa Lidsky, a professor at the University of Florida who specializes in cases dealing with message boards. "The merits of the case haven't been adjudicated yet. Usually under First Amendment doctrine, a preliminary injunction is treated as what's called a 'prior restraint,' and it's particularly disfavored under the First Amendment. There's a heavy presumption that prior restraints are unconstitutional. Now that two courts have done it is even more surprising. It sounds like a dangerous precedent is being set."

The message-board community was disheartened. "It's muzzling of dissent," posted Janice Shell, herself a Net vigilante who says she tries to expose questionable stocks, on Silicon Investor. "I'd have preferred that Floydie be a bit more circumspect in his accusations, but this really goes too far."

The only defense for message-board posters, says Jared Silverman, a New Jersey lawyer and former chief of the New Jersey Bureau of Securities, is the truth. "Basically what the case says is that people who start making accusations through various Internet methods, be it chat boards or whatever, should be very careful of what they say because they could be held accountable for it."

As for the message-board community, it could result in quieter boards. "I think it's a very bad precedent," says Jeffrey Mitchell, a Silicon Investor poster who's worked alongside Shell. "It's silencing John Doe. If you put something out on a message board, you're screwed," he says.

========================================================================

Bryan Kos Ziasuns former stock promoter speaks out about his time in JAIL and more!! We put him there. NOTICE TO ZIASUN BAD GUYS FROM THE ZIASUN 8: WE ARE HUNTING YOU + YOU CANNOT HIDE FROM US! YOU ARE NOW 1 DAY CLOSER TO PRISON JUST LIKE MARK HARRIS FOUND OUT!

WE ARE GROWING. WE NEVER FORGIVE. WE NEVER FORGET. WE ALWAYS FINISH WHAT WE START



Bryan Kos Entrepreneur,Learner of "Life's" Lessons bryanscottkos.wixsite.com


Hello and Welcome to my web site! I hope I can help you! If you are under Indictment or have been sued by the SEC, I will be able to help. Why? Because I’ve been there, done that. I have knowledge from the other side. So, stay positive and let me help to guide you through the MAZE. Because the Justice system is a MAZE. Anyone who has simply been pulled over for a driving ticket knows the beginning of the Justice system. Keyword “Bureaucracy”.

My main objective with this web site is to help others to deal with their past while I deal with my own. As well as, write about what really happened in 2004. And what continually happens today in my own life based upon what is and has been said about me online for many, many years. Time for me to take action! After all, there are NO saints reading this posting. You are either a person in trouble, has caused trouble or someone that knows, loves or cares about you. I understand it all and am available to help you. : )

If you would like to schedule a brief conversation together to discuss your challenges, please fill out this contact form or call me directly at 312-532-1048.

I had for years been very successful in the business of Internet Marketing. It’s true I used bulk email to promote various opportunities. One of them being Investor Awareness for publicly traded companies. I also used PPC (Pay per click), direct mail, TV, Pop-up ads, faxes. I paid for advertising, there was nothing I was doing that was wrong as all my ads online had disclaimers & disclosure according to rules and regulations. My problems started because I didn’t do due diligence on the people behind a company called CNDD (Concorde America). If anyone was to take the time to read these disclaimers the first thing they would see it say is: “Do Not Buy this Stock…” Why did we say that? We wanted people to know that they should research the company prior to purchasing the stock as was outlined in the rest of the disclaimer.

Bottom line at the end of the day all the companies were researched by our writers and the CEO’s were interviewed and most of the companies CEO’s were even video interviewed with the writers of the research reports.

I’m tired of people judging me for a story that is online about me. It’s not a true story, only a story created by one guy. Personally, I believe he was a stock “Shorter” and a part of a syndicate of “Shorters”. By driving the stock price down with negative publicity, he / others, were able to cause “FEAR” in the marketplace from Individual Investors. It’s very similar to the Herbalife situation that has now circled the media since January of 2013 and continues today. Look it up and read about how some people who want to make money can push a sphere of negative news towards something while they reap the rewards of that negativity.

If you do not know how the stock market works, then here’s a little lesson. Just as you buy stock to make money as it goes up, you can “short” stock to make it go down. And there are many other things you can do in between. End of lesson.

What was Prison like?

Here is my side of the story. If you like, first read what is said, then read what was happening in my life in 2004 (today it’s 2014).

First off, the author of the piece about me on JunkFax.org is a guy named Steve Kirsch. I never met Steve Kirsch, nor did I ever talk to him. All I know is that he called me numerous times as he did everyone else that I knew or know on this mostly BS storyline. While calling various people in this article he also was known to impersonate being a lawyer, a member of the FBI, SEC and other enforcement agencies to scare people into talking to him. I never played his game.

Here is his first comment about me in his “story about me” on the Internet.

Like Jaynes, Kos is also a top ROKSO e-mail spammer (see ROKSO page on Kos). However, he wasn't as successful as Jaynes. In early 2003, he didn't have much available cash.

Who cares how much cash I have or had?

Born and lived in the US (Sunnyvale CA, Scottsdale AZ, and Chicago IL). Went to high school at St. Viator High in Arlington Heights, IL. He's now based in Quebec partly because he thinks he'd be harder to get there and partly because his wife Caroline is from there. Kos and Jaynes hooked up in 2000 and are the top people which is consistent with their psych profile as well (i.e., they don't take orders from anyone). According to one of Kos' former associates I spoke with, Kos, like Kevin Katz (of fax.com), is very charming and charismatic in person. People want to like him and help him. Just like Katz, his charisma creates a huge sense of loyalty to him that transcends their better judgment.

Again “Who cares where I grew up and where I went to High School?” I lived in Canada because I love Canada and I was busy raising my awesome children. I was hardly trying to escape anyone or anything. I never met or knew Kevin Katz.

Kos is co-founder of SGNJ, a heavily promoted WSP stock. Not really surprising because the profit margins are much higher on a pump and dump when you own the whole company, rather than do it for someone else.

I was a co-founder of SGNJ and I wasn’t “Pumping and Dumping” anything. I was doing what everyone in the Investment industry does which was raising money so that we could buy Storage facilities.

Kos' ROKSO page says this: "Another long time spammer. Normally spams for hire using free websites or "fake free websites" that either he, or a spamming partner run. Normally spams porn and illegal stock hyping schemes."

I never spammed porn sites.

Kos's main company is Internet Opportunities aka IOPS Inc aka www.i-ops.com aka Internet Promos LLC aka BK Ventures aka XTR Capital Resources, LLC based in Canada (see the ROKSO page for more info). He started IOPS around 1996. IOPS actually stands for "Internet Optimized Promotion Services."

Kos is quite diversified as he describes in this e-mail excerpt from 2001 where he is recruiting for talent:

Internet Promos is an Internet company that owns an ever-growing number of Internet Properties. We own a Financial Education Center including many Financial Newsletters, Dating Services, as well as many additional Free Newsletters on diverse topics (such as: Health, Travel, Credit, Taxation, etc.) as well as an Internet Public Relations Firm specializing in the promotion of Public companies.

Note that he forgot to mention his porn business. Here's just one of the websites he created to promote the I-OPS turnkey porn business: Koss porn promo.pdf. Kos will supply the porn expertise and marketing guidance; you run it.

I find this very interesting. Prior to being involved in the Internet business I was in the 900# industry where I owned numerous types of 900#’s as well as sold these services to individuals for many seminar companies. This opportunity was nothing different. Many major public companies such as Hyatt, Hilton, Starwood (Hotels) sell porn in their hotel rooms. Porn is a legal business. If you don’t like it, don’t watch it!

As noted in the writeup, IOPS provides "investor relations services" as one of their core businesses. Investor Relations (IR) is the euphemism that they use to describe their illegal "pump and dump" stock promo business. For example, they provided "investor relations service" to Advanced Optics Electronics Inc. according to their SEC Form SB-S/A Filing of 9/21/01.

I never promoted a company called Advanced Optics. I don’t know of it.

He's been involved with promoting a lot of stocks including the WSP stocks as well as the stocks listed in the next paragraph.

In 2000, Kos, started with Steve Reid (THE WIZZ KID) using the names "MOEBIUS-Emerging Company Reporter", Moebius "STOCK PICKS." In 2001, Kos switched to Heysek as "The Penny Stock Picker" and The Heysek Report and Micro-Caps News. From April 2001 to April 2003, Kos and crew promoted the following roster companies: Wasatch Pharmaceutical (WSPH), Ziasun (ZSUN), UICO, ARSN, ESPB, ZABC, FASI, TELI, DDD, First Aid Direct (FADI) in 2001, Thaon Communications Inc. (THAO) in April 2001, VisualMED Clinical Systems (VSMD), Regency Group Limited (RGNC), MLM World News Today, Inc. (MLMS), Biomerica Inc. (BMRA), HouseHold Direct, Inc. (BYIT), CastPro.com (KPRC), Internet Venture Group, Inc. (ITVI), NanoPierce Technologies, Inc (NPCT.OB), KCS Energy, Inc. (KCS), Parallel Petroleum Corporation (PLLL), Contango Oil & Gas Company (MCF), American Bio Medica Corporation (ABMC), Bradley Pharmaceuticals, Inc. (BPRX), Lynx Therapeutics, Inc. (LYNX), Questcor Pharmaceuticals, Inc. (QSC), Align Technology, Inc. (ALGN), Derma Sciences, Inc. (DSCI.OB), Endocardial Solutions Inc. (ECSI), I-trax.com, Inc. (IMTX.OB), inTEST Corporation (INTT), MDSI Mobile Data Solutions Inc. (MDSI), Vital Images, Inc. (VTAL), EP MedSystems, Inc (EPMD), eUniverse, Inc. (EUNI), Ostex International, Inc. (OSTX), Carroll Shelby International Inc. (OTC BB:CSBI), and Genius Products, Inc. (GNPI).

And?

Kos also promoted Geoffrey Eiten's OTCFN.com aka OTC Financial Network (OTCFN) a full-service financial communications and investor relations firm that specializes in emerging micro-cap companies listed on the OTC Bulletin Board (see Stock Profit About Us showing Kos' promotion). More about Geoffrey Eiten can be found here, Eiten posting on Silicon Investor, but the article is incorrect as I only found that Kos promoted OTCFN.

Here's more on Geoffrey Eiten aka Geoffrey J. Eiten:

From New York Post Online Edition, Geoffrey J. Eiten: Arrested, convicted and sentenced to prison in 1984 for cocaine possession with intent to distribute, Eiten was dismissed by his next six post-incarceration employers, and thereafter opened a Web-based penny-stock touting firm called OTC Financial Network. The Web site lists none of his previous brokerage-industry employers, though it speaks of the "high esteem" in which he is held in the investment community and the fact that he has appeared as a "guest analyst" on CNBC's "Squawk Box" cable TV show.

for more info, do a SiteSearch on Investrend.com for articles about Eiten, and the services he allegedly uses to hype LocatePLUS Holdings Corp (OTCBB: LPLHA), including TheSubway.com.

I met Geoffrey Eiten one time via the phone. I never promoted his OTCFN.com newsletter.

I obtained a copy of the Genius Products, Inc. contract with Kos, for example. The short story is that he gets paid based on a fixed dollar value of the stock calculated right before the promo starts. Specifically, in this particular case, the payments are:

$50,000 in shares - price per share to be that on the day that the Company gives the "go-ahead"

$25,000 in stock due the day the Company gives the "go-ahead"

$25,000 due 30 days after "go-ahead" date

Therefore, Kos is incentivized to blow up the price as high as he can so he (and the company that hired him) can sell their shares at the inflated price.

The promotion for Genius Products was not about promoting their stock. It was a promotion of their products not their stock. I was paid in stock and I was paid based apon the stock price. This is very common in any payment program when someone is paid in stock.

Here's some more info on NanoPierce, for example, which Kos promoted sometime around April 2002:

The CEO of NanoPierce has been sued by the SEC three times for fraud. Their current stock promoter and past stock promoter is currently being sued for securities fraud for illegally promoting the scam stock.

See Nanopierce Technologies Inc., NPCT Paul Metzinger CEO, potential securities fraud NPCT.ob

Note: the author of that page is being sued by the current stock promoter for libel, but has won the first 5 rounds.

I did not promote nor did I know of a company called Nanopierce.

Here's a screenshot of the i-ops home page on April 18, 2001, showing The Penny Stock Picker and The Heysek Report: i-opsHeysekReport4-18-01.pdf.

Here's a writeup on THAO on i-ops.com in April 2001: Thaon Communications Inc. (THAO)

Here's the pitch i-ops.com used to solicit "investor relations" (IR) business: i-ops.com Investor Relations "pitch"

Here is Bryan Kos management team. Caroline (who is listed on that page) is his wife, Caroline Kos aka Caroline Archambault. The key thing here is that the two top executives are Kos and Heysek.

In his SEC deposition, Bryan (like Oehmke) basically answered "Fifth Amendment" to most of the questions. In his answer to the SEC complaint, he denied everything.

His attorneys are William Nortman (based in Florida), and his long-time counsel, David J. Levenson (Potomac, Maryland).

I have no idea why I was ever indicted with David Hagen in April of 2008 – I did not know David Hagen and only met him once on a webinar in September of 2004 when Howell Woltz asked me to invest $500,000. For his company. I did not invest.

I had been presented a Plea offer by the States attorney of North Carolina in August of 2006 that I never accepted. My thoughts are that after numerous attempts to indict me with a grand jury they did not have evidence of any criminal action by me. So, the way they were able to indict me was to “Bundle” me with David Hagen. Once indicted I had no chance of defending myself especially using the services of the Federal Defenders office. Federal Defenders are overworked and underpaid compared to their counterparts. Most Federal / Public Defenders work for the public sector long enough to reach the top pay grade when they then leave to defend the same people they once prosecuted. This is also true of the SEC (Security Exhange Commission). Most top officials of the SEC go on to very lucrative careers defending the same people they once prosecuted.

No matter what is said about me wheter true or not the bottom line is I was involved in bringing Investor Awareness to companies. I did it through email marketing, PPC (Pay Per click), “Paid” advertising”, Faxes, Pop-up ads, Newspaper, TV, Direct Mail, etc…

All paid for upfront by me and my partners. What I was doing was legitimate advertising with complete Disclaimers & Disclosure. The beginning of our Disclaimers started with “DO NOT BUY THIS STOCK” and went on from there. In the years following 2004 when I left the business of stock promotion it never ceases to amaze me how many stock promoters and public companies still go up and down. That is the nature of the stock industry. Speculation!

Either way, I’m alive and well in 2014, I served 2.5 years in Federal Prison Camps in Atlanta, Duluth MN, and Pekin, IL. I also stayed a week in the “Hole” in Terre Haute, IN (while being moved to Duluth to compete the RDAP (Residential Drug & Alcohol Program), and one week at the MCC (Metropolitan Correctional Complex) in Chicago.

I paid my price, I did my time, and it’s over.

If I can help you in any way, let me know. I have a broad range of business experience, expertise in marketing and I’m a cool guy! When I say help you in any way what I mean is helping you with marketing, promotion, sales, or if you are going to prison or have been indicted I can shed a lot of light on that as well. I’m happy to help!

Have a great day!

Bryan Scott Kos

================================================================

312-532-1048

Floyd Schneider
XX XXXXXX XXXXXXXXX XXXX
XXXXXX, XX XXXXX
Tel XXX.XXX.XXXX
Fax XXX.XXX.XXXX.
XXXXXXX@aol.com

August 30, 2000

California State Bar
180 Howard Street
San Francisco, CA 94105
Attention: Attorney Complaint Division

Re: Cragun v. Does
San Diego Superior Court Case No. 730826

ZiaSun Technologies, Inc v. Schneider, et al.
Case No. C00-1612 PJH, USDC ND CA

Dear Sir/Madam:

I am a defendant in both of the above matters. These are “cybersmear” lawsuits, i.e., I and others are alleged to have made defamatory statements about the plaintiffs through Internet chatrooms. This complaint concerns actions taken by Timothy Blackford, attorney for plaintiff in the San Diego action. Mr. Blackford is associated with the law firm Gray Cary Ware & Freidenrich LLP, 401 B Street, Suite 1700, San Diego, CA 92101, tel 619-699-2700, fax 619-236-1048. My attorney is James A. Shalvoy, 1201 Morningside Drive Suite 215, Manhattan Beach, CA 90266, tel 310-796-0447, fax 310-796-0277.

The complaint in the San Diego action was filed on or about May 14, 1999. It alleges that I made false statements about the plaintiff, Bryant Cragun, through Internet chatrooms. The complaint fails to allege what the statements consisted of, who made them, or how they are false. The complaint alleges unfair and deceptive business practices under the California Business and Professions Code. Although this matter has been pending for over a year, and extensive discovery has been propounded and responded to, plaintiff has yet to disclose a single actionable statement made by me. A motion to compel Mr. Cragun to disclose this information, and for sanctions against him and his law firm, will be heard September 22, 2000.

On or about January 27, 2000, Mr. Cragun applied ex parte for a temporary

California State Bar
August 30, 2000
Page 2

restraining order against me. The basis for the application was that I was allegedly issuing Internet press releases regarding ZiaSun Technologies, Inc., a company with which Mr. Cragun is associated, based on false facts, but designed to resemble legitimate analyst positions released by ZiaSun itself. See Memorandum Of Points And Authorities In Support Of Plaintiff’s Application For Temporary Restraining Order, p. 6 therein; see also Declaration Of Timothy S. Blackford In Support Of Plaintiff Bryant Cragun’s Application For Temporary Restraining Order, para. 10-11, exhibits 1-2.

Exhibits 1 and 2 attached to Mr. Blackford’s declaration are the allegedly false “press releases” issued by me. The words “Company Press Release” at the top of each release, however, were not put there by me. They were put there by Yahoo. I sent the press releases to Business Wire without the words “Company Press Release” on them. A copy of the press releases sent by me to Business Wire are attached hereto as exhibit A. You will note that they do not contain the words “Company Press Release.”

Business Wire then sent the press releases over the Internet to many portals, one of them being Yahoo. Yahoo added the tag line “Company Press Release” above the body of the release without my authorization, knowledge, or consent.

On January 31, 2000, the San Diego Superior Court entered a temporary restraining order against me. The alleged use by me of the words “Company Press Release” played a large part in the court’s decision. In the TRO, drafted by Mr. Blackford’s firm, the court stated:

“IT IS FURTHER ORDERED that Floyd D. Schneider is hereby enjoined and restrained from publishing, whether electronically, in writing, orally, or otherwise, any statements using the line “Company Press Release” or mentioning Cragun or ZiaSun in the heading or subheading of any statement without disclosing in the heading or subheading in clear language that this release is not issued or authorized by either Cragun or ZiaSun (emphasis added).”

Upon being served with the TRO, I immediately contacted Mr. Blackford and advised him that I was not responsible for putting the words “Company Press Release” on the subject press releases. See the e-mail from me to Mr. Blackford dated February 6, 2000 attached hereto as exhibit B that states:

“This is business wires response to me in a email about the ‘Company Press Release’ that you to the judge in the Bryant Cragun Law suit that I had put in my press release of Jan. 1 and jan 3 of 2000 to make it look like a official Ziasun press release. For the record what you told the judge was not the truth.

California State Bar
August 30, 2000
Page 3

“In regard to the below reference to Yahoo’s placement of the words “Company
Press Release”, that is an issue that you need to take up with Yahoo directly as they are the ones who add that tag line above the release, not Business Wire (emphasis added). [Signed] Phyllis Dantuano, Vice President, New York Regional Manager, Business Wire/New York, 212-752-9600, phyllis@bizwire.com”

Notwithstanding Mr. Blackford’s knowledge that I was not responsible for putting the words “Company Press Release” on the press releases, he allowed a sworn declaration by Mark Harris to be used in support of a preliminary injunction against me that repeated this false assertion, i.e., that I was responsible for utilizing a format and language that made it appear that the press release was issued by ZiaSun. See Declaration of Mark Harris In Support Of Motion For Preliminary Injunction, para. 2-3. A preliminary injunction was subsequently entered by the court against me on February 15, 2000 based on this knowingly false declaration drafted by an attorney at Gray Cary Ware & Freidenrich LLP, and after I had advised Mr. Blackford of its falsity. That injunction remains in effect today. I was not represented by counsel at the time these actions took place.

Although I am layman, I understand that it is a violation of the California Rules of Professional Conduct for a lawyer to suppress evidence that he has a legal obligation to produce:

“A member shall not suppress any evidence that the member or the member’s client has a legal obligation to reveal or produce.” Rules of Professional Conduct, Rule 5-220.

In light of the language in the TRO, it is clear that Mr. Blackford and the other members of his firm had a duty to advise the court that the words “Company Press Release” were not put on the subject press releases by me when it applied for the preliminary injunction. Mr. Blackford failed to do so, even after he was advised of this in writing by me prior to the hearing on the preliminary injunction.. Instead, Mr. Blackford and other attorneys in his firm concealed this information from the court and wrongfully obtained the preliminary injunction.

I understand that these actions may also constitute a violation of CCP 128.7 which requires all allegations and factual contentions in a pleading to have evidentiary support.

I bring this matter to your attention as the disciplinary arm of the State Bar and, more importantly, in light of the recent Wall Street Journal article regarding Mr. Cragun. (“Hot For U.S. Stocks, Foreigners Get Burned In Regulatory Limbo, WSJ, August 16, 2000, page 1.) California State Bar
August 30, 2000
Page 4

A copy of the article is attached hereto as exhibit C. As you can see, Mr. Cragun is associated with a shadowy world of stock manipulators and scam artists. He obviously will not hesitate to say anything if it will further his interests. As officers of the court, however, Mr. Blackford and the other attorneys in his firm are held to the higher standard of telling not only the truth, but the unvarnished truth. They have fallen woefully short of that standard.

I have instructed my attorney to pursue all available remedies for the damages I have suffered from Mr. Blackford’s illegal and unethical actions, including seeking dissolution of the preliminary injunction and sanctions under CCP 128.7.

Please contact me or my attorney, James A. Shalvoy, if I can provide you with any additional information.

Very truly yours,

Floyd Schneider

FS/hs

EXHIBIT A
(Copy of press releases sent to business wire without the words “Company Press Release” on them)

EXHIBIT B
(copy of e-mail to Blackford re the press releases)

EXHIBIT C
(copy of WSJ article
================================================================================

Ziasuns IR Dodi Handy

The Female Wolf Of Wall Street: Promoter Dodi Handy aka Dodi Zirkle’s $700+ Million Pump & Her Ties With Arms Dealers, Embezzlers, Convicts & The Mafia

Home » Blog » Basics » The Female Wolf Of Wall Street: Promoter Dodi Handy aka Dodi Zirkle’s $700+ Million Pump & Her Ties With Arms Dealers, Embezzlers, Convicts & The Mafia
Last updated on September 26, 2018


UPDATE: Two weeks exactly after this post appeared, DIMI is now trading at just 4 cents/share, down a stunning 98% since this expose…short sellers who took my lessons are banking, insiders who hired Dodi Handy to pump this stock so they could dump it are banking…sales of my DVDs are surging as are my October conference tickets (which is nearly sold out) since this is by far my best call (email admin@timothysykes.com for DVD specials and conference pricing/details)

Today on July 4th, 2012 we celebrate our country and its founding.

But 236 years after the signing of the Declaration of Independence, 185 years after slavery was abolished in New York, 126 years after we received the Statue of Liberty as a gift from France and 3 years after the Statue of Liberty’s crown reopened to the public, where do we stand as a nation?

I’m not into politics or economics – at all – but I’ll tell you where we stand with the US stock market and it’s ugly.

“Financial experts” and questionable media sources tout investments of their choosing in any manner of their choosing, taking advantage of the SEC’s incompetence and gullible investors with lotto ticket mentalities. The ugly facts of how most traders lose money, most stocks go down each year, most tips are full of misinformation and most penny stocks are complete scams are meticulously kept away from the mainstream public so CNBC can keep making $500+ million/year, brokers keep making billions on commissions knowing full well that most of their clientele lose every day and the corrupt Wall Street juggernaut keeps churning profits for the powerful suits who bribe politicians in exchange for favorable laws and lax regulation.

Only the ignorant, smelly and destitute dare go against such a powerful and evil empire, whining in a park…and then they got crushed by the NYPD and went back to writing poems.

But I won’t stop fighting for the rights of the suckered.

As those who watch my 7 free video lessons understand, I’ve dedicated my life to exposing scams, the ugly reality of this corrupt industry, the ugly people behind this reality and to teaching my trading challenge students how to cut through all the BS and actually profit consistently.

That’s the beauty of America; thanks to all the green and corruption, therein lies the opportunity to profit since the manipulators aren’t very smart and they underestimate us, we, their honest competition as subscribers of my 4 newsletters have now made over $4 million in profits the past few years (the figure is actually over $5.5 million now, I need to update THIS blog post from just a few weeks ago) and you can see how I’ve made nearly $3 million HERE, again, detailed trade-by-trade, just a few thousand dollars in profits at a time.

But America is a mixed bag and despite the opportunity, the bad side of America ignores rules, regulations, ethics and does whatever it can to profit, no matter who gets hurt in the process.

Such an example is Dodi Handy aka Dodi Zirkle…I bring up both names because if you just Google the name she goes by professionally, you might miss this mugshot of Dodi Handy and not get the full picture of who Dodi really is.



Dodi is the investor relations behind AWSR, a pump and dump on which Jarmall made $5,000 whle waiting in line at the DMV…he bought early during the spike and sold LONG before it tanked 99%, just as pretty much every single one of Dodi’s investor relations companies have done.

After all, Dodi is a longtime penny stock promoter, and her picks do well while she puts the press on, then they crash when insiders cash out, or the company goes bankrupt, or fraud charges are leveled, as you’ll read below has happened multiple times with Dodi’s clientele.

Dodi has decades of experience being in charge of multiple promoters’ mailing lists, creating shiny hardcopy mailers full of propaganda for companies in which her or her associates have been compensated or own shares. Here’s her bio from an old SEC filing (her current company, which is on its 4th name change as you’ll see further down in this post, biography doesn’t dare be so detailed about her promotional mailing history ??

Prior to joining CCEC, Ms. Zirkle served as General Sales Manager of Direct Response Marketing, Inc. (DRM) from November 1989 to June 1993 and later DataBase Direct, Inc., (which was acquired by DRM), two of the largest direct marketing and lettershop firms in the Southeast, where she was responsible for managing the direct marketing needs of national clientele including the National Republican Congressional Campaign Committee in Washington, D.C., TimeWarner Cable, Universal Studios – Florida and Premier Cruise Lines (The Big Red Boat(R)).

Since joining CCEC in 1993, Ms. Zirkle has served in a variety of capacities involving the Company’s operations. Initially, she was responsible for overseeing all production and operational aspects of the Company’s Inside Wall Street campaigns, in addition to managing all database marketing and list rental services. In 1995, she was promoted to Vice President of Operations where she was responsible for creating many of the logistical operating systems employed by the Company today. In 1997, Ms. Zirkle was promoted to Vice President of Corporate Sales where she assisted CCEC’s Chairman and CEO with multiple managerial tasks, the negotiation and direction of high-profile client campaigns, the development and enhancement of CCEC’s debt/equity financing source network, and the implementation of internal expansion efforts. These activities included the development of the Broker Relations Department, the enhancement of the Company’s Financial Consulting division, and the research and development of CCEC’s Market Access Program. In 1998, Ms. Zirkle was promoted to Chief Operating Officer and has since led the management buy-out of CCEC from the original founder and sole owner via the creation of Madison & Wall Financial Services, Inc.

This detailed biography helps us understand Dodi VERY well as “she assisted CCEC’s Chairman and CEO with…the development of the broker relations department” and when that Chairman and CEO, John R. Manion, as this old article entitled “ Embattled Securities Promoter Steps Down” did step down and Dodi led the employees to buyout the boiler roominvestor relations firm, she was quoted HERE as saying:

John Manion has been a mentor to many of us. We will miss his contributions, not just to our business, but to our lives. His proven leadership and corporate vision have served as the cornerstones on which Continental Capital has been built and upon which all future successes will be founded.

Given that John Manion was her mentor, it was his “vision” that she wanted to build upon and the fact that she created their “broker relations department”, it’s interesting to note that Manion was convicted of fraud and served time and the Bloomberg article detailing the conviction says “Legend accused of mob ties Russian, Italian crime figures linked by feds to defunct firm’s stock deals”, “On July 21, Manion settled unrelated insider trading charges filed by the SEC by agreeing to pay $40,186 and not commit securities fraud in the future.” and worse:

However, it is known that Staples had met with John Manion of Apopka. Manion reportedly stated he had associates in New York who could bolster — even control — the struggling public company’s stock price. Manion is among those named in the 15-page federal indictment; specifically for his involvement with Legend Sports.

According to the indictment, Manion, along with members of the Colombo crime family and Russian organized crime, came to control virtually all of the tradeable stock of Legend and two other publicly traded companies.

That allowed them to artificially inflate the price of Legend’s stock. Once the stock price began rising, a small army of unregistered brokers and cold callers began aggressively selling the stock at its new, high price to unwary investors.

No longer supported by brokers touting its strengths, and battered by the sudden sell-off, the stock price plummeted, leaving the new investors holding near-worthless paper.

But by then, fat commissions had enabled the boiler room operations to shave profits: The stock of Legend and the two other companies alone netted the group an estimated $10 million in profits.

Remember Dodi’s bio said “she was responsible for overseeing all production and operational aspects of the Company’s Inside Wall Street campaigns, in addition to managing all database marketing and list rental services” and this article regarding Manion’s conviction says:

“In 1996, Manion and Continental settled SEC fraud charges relating to their public relations work for First Entertainment Corp., a movie producer, in 1992 and 1993. Neither Manion nor Continental admitted wrongdoing. The SEC alleged that Continental distributed 400,000 copies of its ‘Inside Wall Street’ newsletter touting First Entertainment’s stock without disclosing that Continental was paid in shares worth more than $700,000 to write the reports. Manion and Continental agreed not to commit securities fraud in the future.”

Dodi’s current pump is DIMI, which I actually bought on the first day of the promotion at $1.07 and made some money…it’s a laughable 2-person company whose latest SEC filing shows it has no revenues and under $1 million in the bank (only because they recently sold a ton of shares at 17 cents/share, which is 1/10th of the current price) and is currently losing $100,000+ every 3 months. Yet thanks to Dodi’s “investor relations”, DIMI is valued at over $700 million…hence which I’m currently short (my subscribers of my 4 newsletters know how I expect this to play out).



Of course, as orchestrated by investor relations pro Dodi, DIMI did just use their surging stock price to acquire an app company that has done $14,000 in revenue…and despite having no real cash, no revenues, no product for sale and no real employees, DIMI, thanks to Dodi, who is listed as the press release’s contact, did commence an “awareness campaign”, which is the cause of the stock price surge.

Why promote a company with so little going for it? To sell shares of course!

Just like great pumps of the past, SPNG and POTG and dozens more, DIMI issued a press release stating they would retire/cancel some of their shares…do I believe that they actually do retire these shares?

Of course not!

No different than recent pump IDNGD (which subscribers know I shorted just before it dropped 90% in a week…blog post coming soon), these pumps mess with their share structure just to mess with short sellers and confuse the gullible into thinking the companies are real and good investments…when in reality, the companies know regulators are so incompetent and brokers are so corrupt that they can sell these “retired” shares and pretend they never existed.

This pump, like every other one of Dodi’s pumps in the past, will soon crash 90-99% no different than THIS pump based out of a barn and THIS pump hyped up by a one man operating out of this shack and his cell phone and countless more… just like these 77 pumps I mention in this video, all of which have crash 90-99% after experiencing the same kind of spiking pattern that DIMI is currently enjoying all thanks to people like Dodi and their penny stock promotion campaigns.

What I find most interesting that while Dodi and her firm are listed as the investor relations company behind DIMI, there’s no mention of her compensation nor how many shares she or her firm owns, the EXACT same problem that got her old boss and mentor, John Manion, whose vision she wanted to continue, into so much trouble int he past when their Inside Wall Street newsletter, which as Dodi’s bio states she was responsible for, didn’t include any disclaimer of how they were paid in shares worth $700,000 to write the reports.

Take a look at DIMI’s hardcopy direct-mailer, Dodi’s specialty which as you remember from her bio was her specialty as she worked with “Florida and Premier Cruise Lines (The Big Red Boat(R))” and as you can read in the disclaimer was financed by $2.4 million paid for by a company called Cloud Focus Group (another Dodi company?!?!?!)



Hmmmmmmmmmm, Dodi, am I going to get to feature another mugshot of you soon? Do you miss your mentor John Manion and want to go visit him in prison?

I don’t know if or how much Dodi and her firm are getting paid by DIMI insiders or shareholders or if she owns this Cloud Focus Group or what, but I’d appreciate greater transparency, just like I show how my students have made over $4 million in the past few years and you can see how trade-for-trade.

But promoters like Dodi Handy aka Dodi Zirkle will never be transparent because it would ruin their business.

Dodi has been pumping for decades, she’s been the main PR person for multiple frauds, in fact researching her for two days leads me to believe she is the penny stock promoter with the single most fraud clients like Allou Beauty and Healthcare where she said:

Dodi Zirkle, Chief Operating Officer of Continental Capital, stated, “To say that we are impressed with the depth and breadth of Allou, its management and its future outlook, is a considerable understatement. Everyone at Continental Capital is very excited about introducing such a fundamentally strong company to our network of investors, stockbrokers, analysts, and fund managers and looks forward to effectively educating the Street on this compelling, undervalued situation worthy of mass market awareness. Despite 13 years of consecutive profitability, significant revenue growth, and a reputation for excellence in its field, Allou currently trades at a steep discount to its industry peers. With aggressive representation of Allou and the employment of comprehensive marketing tools and resources, Continental Capital intends to play a key role in obtaining the Company broader market awareness — both domestically and abroad, enhanced market liquidity and, ultimately, a fairer market valuation.”

A little while later, Allou’s stock tanked, the company went bankrupt and executives plead guilty to fraud:

Top executives of Allou Healthcare Inc. and related companies have pleaded guilty to crimes arising from a massive corporate fraud scheme at Allou. The indictment obtained by the U.S. Attorney’s office for the Eastern District of New York detailed a staggering, decade-long bank fraud and securities fraud scheme involving hundreds of millions of dollars of phony sales and grossly inflated inventory, and a mail fraud and insurance fraud scheme arising from a fire at Allou’s Brooklyn warehouse involving a false insurance claim and the bribery of an undercover fre marshal to change the cause of the fire from “arson” to “accidental.” The related schemes resulted in losses to creditors, investors, and other victims in the amount of an estimated $160 million and ultimately drove Allou into bankruptcy.

OK, being attached to one fraud isn’t that bad,, we all make mistakes, right?

Unfortunately, Dodi’s past is VERY checkered, as she’s had dealings with Aaron Tsai, a multiple SEC offender, known for selling unregistered shares, as you can read about HEREand HERE and HERE which basically says Tsai helped convicted stock manipulator Dr. Jui-Teng Lin, who according to the SEC complaint “dumped a substantial amount of Surgilight stock on an unsuspecting public through two nominee accounts and then wired the proceeds overseas” and Tsai was finally barred from the entire brokerage business in 2010 for “based on his wrongdoing in the late 1990s through 2000 while associated with registered broker-dealers.”

Scroll down on this post and you’ll read an article from the San Jose Mercury News:

Consider the strange story of ESafetyworld (SFTY),

It’s hard to know precisely what Madison & Wall did for ESafetyworld. I couldn’t get Madison & Wall’s chief, Dodi Handy, to call me back. But just like some of its clients, Madison & Wall has an interesting history. Once called Continental Capital & Equity, the firm was founded by John R. Manion, 53, who has had a series of run-ins with securities regulators.

Though the company since has been bought out by employees who say that Manion’s problems have no relation with the firm, a close look at developments this year suggests that investors might pause before buying the stock of Madison & Wall’s clients.

Two weeks ago, Nasdaq stopped the trading in one of those companies, GenesisIntermedia (GENI) as the Securities and Exchange Commission began probing dealing in its shares by Saudi arms dealer Adnan Khashoggi. Another Madison & Wall client, Ursus Telecom (UTCC), filed for bankruptcy protection in April. That came a little more than a month after a former Ursus official filed to sell 200,000 shares while the stock enjoyed a brief rebound during a Madison & Wall-sponsored product campaign.

The SEC went after eSafetyWorld and their executives for fraud, just like Dodi’s other client Allou, saying:

In the first action, the SEC claimed that eSafetyWorld’s CEO, Edward A Heil, and CFO, R. Bret Jenkins, engaged in fraudulent schemes in 2001 involving issuance of a false press release, financial fraud and/or market manipulation. According to the SEC’s complaint, on October 19, 2001, shortly after the anthrax attacks, Heil drafted eSafetyWorld’s false press release about a supposed revolutionary anthrax-containment device. The press release had a dramatic effect on the value of eSafetyWorld shares, causing prices to increase by 413% in one day. Volume for that day shot up by 57,085%.

The SEC also alleges that Heil and Jenkins aided eSafetyWorld’s improper conduct by implementing improper revenue recognition policies and understating net losses in the Company’s financial reports.

The improper conduct apparently did not end there. In 2001, in order to manipulate the stock of eSafety, Heil purportedly directed the purchase and sale of eSafety stock and transferred $473,288 in eSafety funds to two entities, one of which he controlled. The SEC says that Heil executed a false loan agreement and provided eSafety’s auditors with a false loan confirmation to conceal the use of monies in the manipulation.

For those keeping track at home, that’s Dodi’s second fraudulent client, but the third is the biggest since that San Jose Mercury reporter mentioned GenesisIntermedia (GENI) and its ties to Saudi arms dealer Adnan Khashoggi. Adnan and this company have their own Wikipedia page and an LA Times article talks about how the SEC went after them for fraud too:

Saudi financier Adnan Khashoggi and former GenesisIntermedia Inc. Chief Executive Ramy El-Batrawi were sued by U.S. regulators over claims that they orchestrated a $130-million stock loan and manipulation scheme.

From 1999 to 2001, Khashoggi, El-Batrawi and others loaned $130 million in GenesisIntermedia’s shares to broker-dealers while allegedly artificially inflating the stock price, the Securities and Exchange Commission said Thursday. El-Batrawi failed to repay the loans when the alleged scheme collapsed, causing some of the dealer-brokers to go bankrupt, the SEC said.

(The article interestingly includes a brief passage about penny stock promoter Courtney Smith who I featured as he was paid $400,000 to promote a company based out of a UPS store whose stock fell from $1.75 to 25 cents/share in 4 days after a 2 week promotion specifically timed to inflate the price before insiders could sell (sound familiar DIMI?))

Can you guess who handled the press of GENI when “inflating the stock price”?

Interestingly, in this message board post Dodi said:

Furthermore, we do not advocate “boiler room” tactics for increasing awareness of our client companies, however we do engage in telemarketing activities to pro-actively educate the professional investment community (i.e. retail brokers, institutions and analysts) on those companies whose fundamentals and technicals meet the expressed interest criteria from individuals within that community

Our financial relations executives are highly trained and effective marketing professionals who understand the sensitivities involved in working in a highly regulated environment and one in which they exhibit only the highest levels of responsibility, integrity and professionalism. Tours of our facilities are common and encouraged.

It is our belief that in today’s sophisticated investment arena, companies can not and should not wait for the market to come to them. If they are to attract broad market appreciation for their businesses, then they must pro-actively educate this arena on the reasons why they are worthy of that appreciation. In our professional opinion, GenesisIntermedia is such a company.

Whoops!

Another fraud from Dodi’s past is Xybernaut, check out the details on that $55 million fraud here.

And there’s plenty more Dodi frauds and questionable associates, but I’ve written nearly 4,000 words today so I’ll only include a bit more.

Worse, Khashoggi, along with Ramy El-Batrawi, the principal financier behind GenesisIntermedia, Inc. (GENI) have ties with the Filipino boiler room king Amador Pastrana who has a VERY interesting feature article on him here and also Rakesh Sexana who just got sentenced to 10 years in jail for embezzlement.

What a group of winners!

OK, OK, let’s play devil’s advocate for a second, maybe Dodi just got realllllly unlucky in her dealings with arms dealer Adnan, but she learned her lesson, right?

Unfortunately, Dodi’s company Madison & Wall, as confirmed by StockLemon HERE, was also the investor relations for Junum Inc., a telemarketing company owned by Khashoggi, which also went bankrupt and was only exposed due to the boiler room operators complaining to the press they hadn’t been paid!

My trading challenge students are especially in luck tomorrow because we have a special 2-hour live trading webinar planned and DIMI might very well start dumping once people realize how it’s Dodi’s firm which is on its 4th name, that is hyping this carcass of a company with nothing else behind it and as you’ve read her past is littered with similar schemes.

PS One of my preferred brokers has had shares to short of DIMI every day this week, choose your broker carefully ??
==============================
From Bryant Craguns attorneys web site. mintz.com

"Represented publicly traded company in litigation to halt stock manipulation through online bulletin boards. Successfully argued for and obtained first restraining order in the US enjoining Internet stock manipulation."
HOME OUR PEOPLE



Daniel T. PascucciMember / Managing Member, San Diego Office; Co-chair, Class Action Practice DPascucci@mintz.com

+1.858.314.1505

=========================================

Here is the other slug attorney with NO MORALS. Will lie for billable hours
=====================================

behmerblackford.com

bout Values Services Contact



Tim BlackfordLegal ExperienceTim Blackford began his legal career at Gray Cary Ames and Frye in 1990, while attending the University of California San Diego. Working as a records clerk for several years while in college exposed Tim to the nuts and bolts of civil law practice and many areas of law, including family law, immigration law, intellectual property, corporate law, and litigation. Tim had a life-long passion to become a trial lawyer, and set out to pursue his career at the firm with the best trial lawyers in San Diego.

Tim attended law school at the University of Southern California, and returned each summer to Gray Cary. In 1997, he was hired as an associate, and had his first, solo trial at the end of his first year of practicing law. Tim amassed substantial trial and arbitration experience early in his career. In 2005, he achieved partner in his first year of eligibility.

=========================================

Ziasuns IR Geoffrey Eiten

SEC CHARGES MASSACHUSETTS-BASED PENNY STOCK PROMOTER WITH MAKING FRAUDULENT STATEMENTS

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22188 / December 12, 2011

Securities and Exchange Commission v. Geoffrey J. Eiten and National Financial Communications Corp., 1:11-CV-12185 (District of Massachusetts, Complaint filed December 12, 2011)

SEC CHARGES MASSACHUSETTS-BASED PENNY STOCK PROMOTER WITH MAKING FRAUDULENT STATEMENTS

The Securities and Exchange Commission, in an action filed today in federal court in Boston, charged Massachusetts resident Geoffrey J. Eiten and his company National Financial Communications Corp. (“NFC”) for making material misrepresentations and omissions in a penny stock publication they issued.

The Commission’s complaint alleges that Eiten and NFC publish a penny stock promotion piece called the “OTC Special Situations Reports.” According to the complaint, Eiten, self-proclaimed “America’s Leading Micro-Cap Stock Picker,” promotes penny stocks in this publication on behalf of clients in order to increase the price per share and/or volume of trading in the market for the securities of penny stock companies. The complaint alleges that Eiten and NFC have made misrepresentations in these reports about the penny stock companies they are promoting. For example, the Commission’s complaint alleges that during 2010, Eiten and NFC issued reports promoting four penny stock companies: (1) Clean Power Concepts, Inc., based in Regina, Saskatchewan, Canada, a purported manufacturer and distributor of various fuel additives and lubrication products made from crushed seed oil; (2) Endeavor Power Corp., based in Robesonia, Pennsylvania, a purported recycler of value metals from electronic waste; (3) Gold Standard Mining, based in Agoura Hills, California, a purported owner of Russia gold mining operations; and (4) Nexaira Wireless Corp., based in Vancouver, British Columbia, Canada, a purported developer and seller of wireless routers. The Commission’s complaint alleges that in these four reports, Eiten and NFC made material misrepresentations and omissions, concerning, among other things, the companies’ financial condition, future revenue projections, intellectual property rights, and Eiten’s interaction with company management as a basis for his statements.

According to the complaint, Eiten and NFC were hired to issue the above reports. Eiten and NFC used false information provided by their clients, without checking the accuracy of the information with the companies in question or otherwise ensuring that the statements they were making in the OTC Special Situations Report were true.

The Commission’s complaint charges Eiten and NFC with violating the antifraud provisions of the federal securities laws (Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder). In its complaint, the Commission seeks permanent injunctions, disgorgement plus prejudgment interest, civil penalties, and penny stock bars pursuant to Section 21(d)(6) of the Exchange Act against the defendants.

SEC Complaint
http://www.sec.gov/litigation/complaints/2011/comp22188.pdf

==========================================
Old Bryant Cragun Offshore boiler room web site CapitalG.com now owned by Google

capitalg.com

Funny. Google now owns Bryant Craguns old boiler room domain web address above lol

Here it is when Cragun Boiler Room owned it

web.archive.org

web.archive.org

web.archive.org*/capitalg.com

You can read all about the web site on this thread on Si which documents the fraud

Subject 23565

============================================

Here is the blurb about Mark Harris's court papers from his ex-wife complaint:

"43] When Mr. Cragun retired in 1999, Rory Boyce-Varley, an internet marketing specialist, became Mr. Harris' business partner in Veritas. The financial prospects for 2000 looked promising when Trademex placed a million shares in escrow, and Internet Studios promised two million shares. However, in 2000 things went from bad to worse. Internet marketing started its downward spiral, Trademex was de-listed, and unbeknownst to Mr. Harris, Mr. Boyce-Varley swapped Internet Studios restricted shares for freetrading shares and sold them. Mr. Harris returned from California to find that his partner had cleaned out his office and apartment, and left the country."

It was Tradamax NOT Trademex. Harris put the deal together and was IR.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO. 17873 / December 3, 2002
SECURITIES AND EXCHANGE COMMISSION v. PATTINSON HAYTON, et al. Civ. No. 01-589-GLT (USDC CD Cal)
PERMANENT INJUNCTION ENTERED AGAINST PATTINSON HAYTON, ORDERS OF DISGORGEMENT ENTERED AGAINST RELIEF DEFENDANTS
The Commission announced today that on November 27, 2002, the Honorable Gary L. Taylor, United States District Judge, entered a final judgment of permanent injunction by default against Pattinson Hayton, the undisclosed control person of Tradamax Group, Inc. Tradamax formerly had an office in Newport Beach, California. Hayton, who also uses the name Pat Leslie-Hayton, recently used a business address in Newport, Rhode Island.
The final judgment enjoins Hayton from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Sections 10(b), 13(d) and 16(a) of the Securities Exchange Act of 1934, and Exchange Act Rules 10b-5, 13d-1, 16a-2 and 16a-3. Hayton was also enjoined from aiding and abetting or causing violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act, and Exchange Act Rules 12b-20, 12b-25, 13a-1, 13a-11, and 13a-13. Hayton was also ordered to pay disgorgement of $328,516 plus interest. Further, Hayton was barred from serving as an officer or director of any publicly held company.
The Court also ordered that relief defendant Carlisle Holdings, Ltd. pay disgorgement totaling $95,509, plus prejudgment interest and that relief defendant Netvest (Ontario) Ltd., pay disgorgement totaling $62,600, plus prejudgment interest. The complaint alleged that Carlisle and Netvest were controlled by Hayton and were used to sell securities or receive funds from investors who purchased stock from Hayton.
The Commission's complaint, filed in the U.S. District Court for the Central District of California on June 21, 2001, alleged that Hayton, Tradamax and Conrad Diaz, a former Tradamax officer and director made numerous fraudulent public statements regarding: (1) the control of Tradamax by Pattinson Hayton, a recidivist securities law violator; (2) the identity of Tradamax's chief executive officer; (3) the company's business, an Internet website portal designed to facilitate coffee bean and other commodities trading; (4) Tradamax's claimed business relationships; and (5) the company's projected revenues and income. As alleged in the complaint, these fraudulent statements were made in press releases, Internet websites, Spam e-mail messages, Internet message boards, reports filed with the Commission, and promotional materials distributed to prospective investors.
For more information, see Litigation Releases No.17677 (August 13, 2002), 17046 (June 21, 2001) and 17061 (July 5, 2001).
For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm.
For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm.
To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.

http://www.sec.gov/litigation/litreleases/lr17873.htm

BI arrests American tourist, readies deportation

Published May 20, 2011 4:53pm

The Bureau of Immigration (BI) has detained and begun deportation proceedings against an American tourist wanted for fraud in Brazil. BI Interpol agents arrested William Preston Strong in a Boracay resort in Malay, Aklan. Immigration records show Strong entered the country on November 28, 2010. Immigration Commissioner Ricardo David Jr. issued the arrest order for Strong after the BI received a ‘red notice’ from the Interpol in Sao Paolo, Brazil. A red notice is an alert Interpol member-countries send out for the arrest of fugitives. BI Intelligence chief and spokesperson Maria Antonette Bucasas-Mangrobang said a federal court in Sao Paolo issued an arrest warrant on Strong, who has been accused of fraud, conspiracy and setting up a securities fraud syndicate. Mangrobang added that the complainants are Brazilians lured into investing millions of dollars in attractively-priced shares Strong’s syndicate allegedly advertised on the Internet. She said the victims were made to pay taxes and commissions for a stock offer that was a hoax. — ELR/VS, GMA News

image: philstar.com

MODERN LIVING

image: media.philstar.com



Dr. Hazel Zuellig, Thomas Gilbert, St. Peter Life Plan, Inc. chairman Dr. Mildred Vitangcol, celebrator Eimee Cragun and husband Bryant Cragun with Grand Hyatt Manila’s The Peak manager Benjamin Schertzer

Eimee Reaches Greater Heights

0SHARES00

OH YES, IT'S JOHNNY! - Johnny Litton (The Philippine Star) - April 13, 2019 - 12:00am

Grand Hyatt Manila, the favorite venue for Manila’s most stylish socialites and VIPs, was the destination of choice for the birthday celebration of former beauty queen Eimee Cragun. Held at The Peak, a sleek multi-level bar, music lounge and grill roof deck restaurant located on the 60th-62th floor of the five-star luxury hotel, the affair was attended by the statuesque celebrator’s friends from the business and social sectors. Eimee and her guests enjoyed the evening’s array of refreshing cocktails and the sumptuous cuisine as well as a fantastic selection of songs from the evening’s live band.

Read more at philstar.com

Raymond Louis Dirks (CRD #601699, Registered

Representative, New York, New York) submitted an Offer of

Settlement in which he was fined $25,000 and suspended from

association with any NASD member in any capacity for 30 days.

Without admitting or denying the allegations, Dirks consented to

the described sanctions and to the entry of findings that he

wrote research reports that contained “Strong Buy”

recommendations that did not define what was meant by a

“Strong Buy,” and did not disclose any risks that could impede

the achievement of targets or estimates. The findings also stated

that Dirks failed to disclose in a report that company auditors

had issued a going concern on the company before the issuance

of the report. NASD also found that in one report Dirks failed to

disclose that his member firm was a market maker in the

company’s securities at the time the report was published. In

addition, NASD found that reports omitted material facts and

included price target projections and revenue estimates that

were exaggerated, unwarranted, misleading, and without a

legitimate basis, and forecast events that were unwarranted in

light of the speculative nature of the company’s business.

finra.org@ip/@enf/@da/documents/disciplinaryactions/p007430.pdf
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ReplyMessage PreviewFromRecsPosted
10336Old Bryant Cragun Offshore boiler room web site CapitalG.com now owned by GoogleStockDung-September 30
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10334CAPITAL CONSULTANTS, INC. Entity Number: 802063-0142 Company Type: Corporation -StockDung-July 30
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10332LIKE CROOKED FATHER LIKE CROOKED SON: In the Matter of S. JEFFREY JONES, CPA, RStockDung-July 1
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10330e ORDER INSTITUTING DISCIPLINARY PROCEEDINGS, MAKING FINDINGS, AND IMPOSING SANCStockDung-July 1
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10312Sunday, April 14, 2013 Francois Goelo indicted for securities fraud - I outed, rStockDung-12/9/2016
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10310Hypo Alpe Adria Bank In 2007 ontpopte zich in de bankencrisis een schandaal inStockDung-5/1/2016
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10304Bryant Cragun makes comback in yet another penny stock scam otciq.coStockDung-1/9/2016
10303Daniel T Pascucci ->How Can Bart Simpson Ruin Your Company? Cybersmearing: IStockDung-1/1/2016
10302"ZiaSun spokesman Mark Harris. ZiaSun had filed the suit in Seattle, the loStockDung-1/1/2016
10301HAPPY NEW YEAR TO CRIMM BRYANT D. CRAGUN -> Bryant Cragun, owner of a boilerStockDung-1/1/2016
10300.PT. Dolok Permai [graphic] Home > Scams >StockDung-12/26/2015
10299Bryant Cragun can GFHS sec.gov.ph;StockDung-12/26/2015
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10290YET another fraudulent Recivist tied to Bryant Cragun and Ziasun Technologies chStockDung-7/15/2015
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10288"Carmine J. Bua, a lawyer who represents Mr. Zubkis's companies, said tStockDung-3/11/2015
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10285Dear StockDung, Please change the logo you are using for this board. SI boardsSI Dmitry (code monkey)-11/18/2014
10284DoneSI Ron (Soup Nazi)-11/17/2014
10283I would like to be moderator, then I could do the logoStockDung-11/17/2014
10282Hello guys, We need a logo for this board. Can you please pick one out and I cSI Ron (Soup Nazi)-11/17/2014
10281The Female Wolf Of Wall Street: Promoter Dodi Handy aka Dodi Zirkle’s $700+ MillStockDung-11/8/2014
10280"Flader also figures in the files of the Spanish share regulator, the CNMV.StockDung-11/2/2014
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10278Jones, Jensen & Company According to information in an SEC administrative cStockDung-10/28/2014
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10276Massachusetts-based Penny Stock Promoter Ordered to Pay Over $700,000 in SEC FraStockDung-10/8/2014
10275SEC v Eiten et al Case 1:11-cv-12185-GAO Document 59 Filed 09/30/14 Page 1 ofscion-10/3/2014
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10273Wearabouts unknown. After they release William Preston Strong in the PhilippinesStockDung-9/29/2014
10272Where is William P Strong now??greek stockbroker-9/29/2014
10271RENT_A_CRIMMS_HOUSE ..........Mark Harris Home for rent longtermlettiStockDung-9/20/2014
10270The Geoffrey Eiten log cronicals ========================================= [StockDung-9/17/2014
10269Hello Everyone. There is a company scamming people around, called "Q Interbrutus_fw-8/22/2014
10268Legal Notice Notice is hereby given pursuant to the requirements of Utah Cod..StockDung-7/29/2014
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10257Robert Brian Kay Barred for Misrepresenting Values of Phony Securities Posted oStockDung-3/17/2014
10256Geoffrey Eiten needs to come Clean and I have a CONcept. 100% Proof Geoffrey EitStockDung-2/20/2014
10255SEC target Eiten seeks $1 fine, says he is poor 2014-02-18 13:21 ET - Street WStockDung-2/19/2014
10254Stock Crook Bryant Cragun and his wife THE 13TH ANNUAL MANILA’S BEST DRESSED AWAStockDung-1/27/2014
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10252Further Ziasun8 Vindication-> SEC seeks $677,029 (U.S.) from Eiten SEC seeStockDung-1/16/2014
10251Robert Brian Kay Barred for Misrepresenting Values of Phony Securities PostedStockDung-1/11/2014
10250Tokyo drifter 10th May 2008 12:00 AM [graphic]Jason Tobin starred in the movieStockDung-1/11/2014
10249SEC target Eiten accepts permanent ban 2013-12-23 13:40 ET - Street WireStockDung-12/23/2013
10248SEC goes after Ziasun's CRIMM accountant Gordon Jones. Seeks 2.8 million!! CStockDung111/22/2013
10247Mark Harris ProfileLinksSocial Stream [graphic] Mark Harris Marketing andStockDung-11/4/2013
10246Anthony L Tobin's AsiaEnet (www.asiaenet.com) web site becomes Asian Porn siStockDung-11/3/2013
10245Anthony Tobin's former director walks free Best regards, > > >StockDung-10/31/2013
10244Trio kingpin Jack Flader free of ASIC's eyes Banking and Finance OctoberStockDung-10/29/2013
10243Notice to JENNIFER MCMINN . Go suck an egg....StockDung-10/27/2013
10242WE WILL PUNISH THE MASTERMINDS OF THE ZIASUN STOCK FRAUD. THE WORK IS NEVER ENDIStockDung-9/22/2013
10241MARK HARRIS PLEADS GUILTY + WILL TESTIFY AGAINST SHERMAN MAZUR + OTHERS http://wStockDung-9/21/2013
10240a talented confidence man, Mark Harris is a master at conjuring the look and feeStockDung-9/13/2013
10239SEC wins $1.6-million (U.S.) fine for tout publisher 2013-07-29 12:52 ET - StreStockDung-7/29/2013
10238Raymond L Dirks [graphic]StockDung-7/26/2013
10237Further Vindication!! Mark Harris CRIMM Ziasun IR Geoffery Eiren Ordered to PayStockDung17/25/2013

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