Bangkok-based Brinton Group investment firm boiler room scam
Bangkok-based Brinton Group investment firm boiler room scam
Into the Rough
07/01 - In a joint operation involving a multitude of both Thai and international enforcement agencies the Brinton Group and the Benson Dupont Capital Management had their boiler room operations raided in Thailand. Complaints had been made concerning similar activities from twenty-one other companies based in Bangkok.
The raids were the result of more than two years of investigations by securities regulators in Australia, Hong Kong and New Zealand following complaints from a large number of investors, especially Australians, who had been solicited by telephone salespersons based in Thailand to buy shares in another overseas market. High pressured selling tactics were used and investors were then asked to send money offshore where it was destined to stay.
It was established that the two groups of companies may be associated with a larger group of entities and may also have belonged to an international group based outside Thailand which engaged in international money laundering. New evidence has emerged that the Bangkok operation is part of a much bigger international scheme that's defrauded Australians of more than $200 million.
Using different brand names of Brinton Group, Benson Dupont Capital Management, Osiris Asia Pacific, Strategic Alliance Corporation, Sigama Capital Management and Dreyfus Capital, advertised their businesses in brochures as securities brokers and investment managers based in Thailand.
Initial investigations revealed that the groups frequently changed their names and places of businesses thus creating difficulties in tracking them down.
They attempted to conceal their business operations by renting virtual office to act as switch board facilities to transfer calls to other locations where they had a physical presence. More than 60 telephone lines had been installed in both locations where telephone records show that frequent calls were made overseas by the more than 70 foreign nationals engaged there including ten Australians, three New Zealanders and numerous British and U.S. citizens.
Seven executives of the Brinton Group namely 1) John Martin Kealy, of County Tipperary, Ireland 2)Ronan Joseph Murray, of Dublin, Ireland 3) Paul Mary Hickey, 4) Scott Campbell Fisher, 5) Jason Garrick Rich, 6) Adrian Robert Wallis and 7) Steven Hooper were found to have engaged in illegally conducting securities businesses without having obtained a license from the SEC Thailand. Such activity is an offense under their SEC Act and is punishable by maximum jail terms not exceeding 5 years and a fine not exceeding 500,000 baht.
Ronan claims his operation is legitimate because the US companies they're selling shares in, are real. The Brinton Group was engaged by Golf.com through Tom Gallagher of Gallagher, Briody & Butler to raise capital for Golf.com.
Gary Player, through his investment company, is actually a minority shareholder in Golf.com, an ownership interest he reluctantly accepted in lieu of market-rate endorsement fees. He licensed the rights to use his name and likeness in connection with their equipment in February 2000 but after they failed to pay royalties the license was terminated in July of 2001.
Since that date, Mr. Player does not endorse Golf.com's products in any way and has filed suit to enjoin them from using his name and likeness altogether. He stated that he felt the Brinton Group was a legitimate operation.
One investor who initially bought shares from the Brinton Group in a public company called Gary Player Direct spent hundreds of thousands of dollars worth at a time when the company was collapsing financially. He was reassured that his shares would be transferred into a new Gary Player named company. And that's exactly what happened.
The first company collapsed and delisted, and he received shares in the private company called Gary Player Golf.com. He has since been optimistically waiting over a year and a half for the new company to list publicly so he can sell his shares.
More On The Brinton Group's Cold-Calling Scams
The Securities and Exchange Commission said yesterday that it had filed additional criminal complaints against seven executives of the Brinton Group for fraud and offering securities services without a license.
The executives are John Martin Kealey, Ronan Joseph Murray, Paul Mary Hickey, Scott Campbell Fisher, Jason Garrick Rich, Adrian Robert Walls and Steven Hooper.
On July 26, the SEC and police raided the offices of two "boiler-room" operations, including the Brinton Group, for illegally operating securities services without a licence.
Over 100 Thais and foreigners were arrested in the raids, which followed a month-long SEC investigation in co-operation with Australian, Hong Kong, and US authorities. The securities scheme was said to have spanned 70 countries, with estimated damage to foreign investors of around A$300 million, or 6.9 billion baht.
The SEC said pending further investigation, the seven executives were identified as "responsible for the management of the Brinton Group and had therefore conspired to operate securities businesses in Thailand without having licences and to engage in fraudulent activities".
STOCK TRADING SCAM 28 July 2001
Brinton Group has long, shady history
The Brinton Group, whose staff was arrested on Thursday for alleged illegal global stock trading operations, set up its Bangkok headquarters on the 24th floor of Bangkok City Tower on Sathorn Road about one year ago.
The office housed several companies, all of which were registered with the Commerce Ministry.
Their salespeople allegedly used high-pressure sales tactics to sell overseas shares and investments and reportedly duped middle-class investors out of millions of dollars. Most investors reportedly lost about US$50,000 (Bt2.3 million) to $100,000 each.
Yesterday the Australian embassy in Bangkok was flooded with calls from nervous investors in Australia who had purchased shares with the firms raided, some having handed over up to 250,000 Australian dollars (Bt5.76 million).
The Brinton Group allegedly has a long history in cold-calling scams, having previously being based in the Philippines and the Caribbean, and has sold IPOs (initial public offerings) and sourcing venture capital for American companies and in Gary Player Direct, a company run by the famous golfer's son.
Sources said retirees keen to speculate in quick money were especially targeted. Tele-sales people were well trained and given scripts to talk to prospective investors. The sales people often switched offices and used different names. Their operations used virtual mailboxes, and leased telephones and fax machines -- all of which made it harder for authorities to gather evidence.
The money that they had solicited for stock investment was sent to bank accounts in Hong Kong.
Prior to Thursday's raid, as many as 100 clients found that they had been cheated, according to a source. Most were from Australia, New Zealand and Hong Kong. The investors were initially lured into the net with reported high returns especially from shares traded on the US stock markets. They were asked to invest further, then the operation would move to another location -- leaving the investors in limbo. The two firms' 80 or so expatriate staff members were mostly tourists in Thailand. Some were recruited from websites.
Peter Kell, executive director of consumer protection for the Australian Securities and Investments Commission, or ASIC, said the scams had drifted from America and Europe into Asia and were now operating in Thailand, the Philippines and Hong Kong. "ASIC alone has received many hundreds of complaints, and so we would estimate that a lot more people have been called (by scammers) than the number of complaints we have received," Kell told the Australian Associated Press. At least one operator had raised more than A$3 million from unsuspecting investors, he said.
Officers from the US Federal Bureau of Investigation and the Australian Federal Police joined Thai police in the Bangkok bust.
"We are pleased to be able to provide investigative support in this case and we anticipate long-term investigative follow-ups," FBI agent Robert Cahill, legal attaché at the US Embassy, said yesterday.
Representatives of Bangkok's legitimate brokering houses were encouraged that Thai authorities had taken action against the increasing number of boiler rooms. "It enhances Thailand's reputation after being damaged by the emergence of these houses," said Bob McMillen, chief executive of Seamico Securities. "But I would like to see them follow it up and target the foreign currency operators who are hitting the Thais as well."
Source: The Nation
Thai police charges eighty suspects in stock trading scam
Thai Police are looking for four other foreigners suspected of masterminding a stock trading scam, a police source said yesterday.
Police believe there are six big bosses in the financial scam and four of them eluded police when they raided two offices operating under the name of the Brinton Group and Benson Dupont Capital Management on Thursday.
Scott Fisher, 34, an Australian, and Paul Hickley, 48, from Ireland, two of the six presumed bosses, were among 80 foreigners arrested.
They have been charged with violating securities regulations and the 78 others charged with working without a permit.
One of the four has been identified as John Kealay, an Irish national. The six also face charges of fraud, the source said.
The 78 suspects were taken to the Southern Bangkok District Court for arraignment yesterday. Their job was allegedly to persuade would-be investors to buy non-existent shares.
The two others were detained at the Crime Suppression Division pending further inquiries. Diplomats were present during the questioning.
Following the round-up on Thursday, the suspects were held at the CSD auditorium under extra-tight security. Questioning proceeded with difficulty because of language problems, said Pol Col Surapol Thongprasert, chief of the transnational crime suppression centre, who was in charge of the interrogation. Public prosecutors, moreover, had told police to file charges against the suspects as individuals rather than as a group, he said.
Patrol police ran back and forth on Thursday night between the CSD and the suspects' places to search for passports and other documents.
Pol Col Thawee Sodsong, of the CSD, said yesterday Mr Fisher and Mr Hickley would face five years in jail if convicted.
To be continued…
List of those busted include:
01. Scott Prirembel, 29 (US)
02. Matthew Nutta, 28 (Can)
03. Steve Buchley, 37 (Brit)
04. Peter Frain, 37 (Brit)
05. Steven Sharpe, 42 (Can)
06. David Kelly, 26 (Ire)
07. Justin Beerling, 29 (Aust)
08. Malcolm Chambers, 43 (Scot)
09. Kevin Marsh, 31 (Brit)
10. Brian Gallant, 38 (Can)
11. Adrian Fobert Willis, 54 (Brit)
12. Peter Townshend, 33 (Brit)
13. Nathan Woods, 29 (Brit)
14. Herman Sudielson, 79 (US)
15. Richard Fowle, 33 (Brit)
16. Wayne Cardoza, 34 (Jam)
17. Paul Ryan, 32 (Ire)
18. Paul O?Leary, 31 (Ire)
19. Radolph Fitzgerald, 41 (Brit)
20. Sean Fisher, 32 (Brit)
21. Gregory Doel, 31 (Brit)
22. Shanvorn Assassi, 48 (Liberia)
23. Stephen Doherty, 30 (Ire)
24. Benjamin Davidson, 25 (Brit)
25. James Burn, 28 (Brit)
26. Scott McInnis, 26 (US)
27. Patricia Shaw, 31 (Aust)
28. David Karl Ryan, 28 (Aust)
29. Scott McGee, 31 (NZ)
30. Sian Gould, 26 (Brit)
31. Wayne Blandford, 45 (Aust)
32. John McGuile, 25 (Brit)
33. Steven Hooper, 28 (Brit) *
34. Daniel Smith, 29 (Brit)
35. Setald Jacobson, 71 (Can)
36. Ronald Silvertro, 55 (US)
37. Edward Jackman, 67 (US)
38. Claire Dickson, 22 (Brit)
39. Homce Bradshaw, 32 (Brit)
40. Keely Smith, 24 (Brit)
41. Brian Paterson, 49 (Aust)
42. Cecily Destate, 32 (P?pines)
43. Roger Charles, 31 (Brit)
44. Alyse Penny, 20 (Brit)
45. William Seymour, 42 (Aust)
46. Chris Cowle, 33 (Brit)
47. Andrew Low, 23 (Brit)
48. Norman Hewitt,58 (Brit)
49. Bruce James, 43 (Can)
50. Graham Hewetts, 21 (Brit)
51. Neil Delahaye, 26 (Ire)
52. Ronnie Kywe, 23, (Burma)
53. Foo Chee Wai, 29 (M?sia)
54. Marina Diaz, 28 (Spain)
55. Matthew Davis, 29 (Brit)
56. Mark Iorbert, 34 (Brit)
57. Robert Peter Mooney, 42 (Brit)
58. Robert Frandsen, 28 (Aust)
59. Jonathan La Ourgmaini,29 (US)
60. Lee Mun Yoke, 30 (S?pore)
61. Jeanifer Angeles, 23 (P?pines)
62. Michael Scales, 26 (Ire)
63. James Ryan, 20 (Brit)
64. Rodoto Oampo, 38 (P?pines)
65. Neville Veia, 46 (Aust)
66. Junel Jubutay, 31 (P?pines)
67. Peter Bradley, 40 (Aust)
68. Yuth Chareen, 26 (US)
69. Michael Lavin, 32 (Ire)
70. OT Boutisia, 58 (P?pines)
71. Sudha V, 24 (India)
72. Davin Darpal Bajaj, 37 (S?pore)
73. Tod Maknowy, 53 (US)
74. Mark Kanforian, 38 (US)
75. Steven Lokomiwitz, 40 (US)
76. Patrion O?Gertiny, 30 (Ire)
77. Christopher Scales, 23 (Ire)
78. Kenneth Kamebod, 40 (US)
79. Graig Zucker, 40 (US)
80. Seamus Ryan, 25 (Brit)
81. Jason Rich, 24 (Brit) - Jason Garrick Rich *
82. CT Bautista, 34 (P?pines)
83. Scott Fisher, 34 (Aust) - Scott Campbell Fisher *
84. Paul Hickey, 48 (Ire) - Paul Mary Hickey *
85. John Messey, 37 (Brit)
Source: Bangkok Metropolitan Forum bangkokmetro.com 07/26
Irishmen accused of running Thai share scam - Irish Examiner 12/21/01
THREE Irishmen were among seven foreigners who appeared in a Thai court yesterday accused of being the masterminds of a international share scam that burned scores of investors. Defence lawyer Prakob Udomchoti told the court that his clients had not acted unlawfully.
"We've done things they said we did but all of them were legal both in the United States and Australia. "All we have to prove in court is whether they were legal also in Thailand," he said.
The Irishmen, three Britons and one Australian are accused of luring foreigners to invest in non-existent stocks abroad. Bangkok prosecutors say they are believed to have defrauded investors of more than £40,000. If convicted, they face up to 10 years in prison.
The hearing was adjourned until next Wednesday.
According to the Thai Securities Exchange Commission, the suspects operated unlicensed stock brokerage firms, employing about 100 people including Britons and Irish as salespeople. They would call investors abroad and convince them to invest their money in shares of non-existent or shaky companies outside Thailand.
After a two year investigation, police raided the alleged fraudsters' Bangkok offices - known as boiler room for the high-pressure sales tactics employed there - and arrested 80 foreigners in July.
Seventy-three of them were deported while the seven alleged masterminds were charged.
They are: Irishmen Paul Mary Hickey, 48; John Martin Kealy, 36; and Ronan Joseph Murray, 28; and Australian Scott Campbell Fisher, 34; Britons Steven Hooper, 28; Jason Garrick Rich, 24; and Adrian Robert Wallis, 54.
Prosecutors said they presented themselves as executives of various brokerage firms called the Brinton Group, Benson Dupont Capital Management, Osiris Asia Pacific, Strategic Alliance Corporation, Sigama Capital Management and Dreyfus Capital. The investigation into their activities was conducted by the Australian authorities and FBI following complaints by securities regulators in Australia, New Zealand and Hong Kong.
Australian and US agents joined the Thai police in the raid.
July 26, 2001
The Brinton Group
Sigama Capital Management
e.go trade incorporated
(1) Mr. John Martin Kealy,
(2) Mr. Ronan Joseph Murray,
(3) Mr. Paul Mary Hickey,
(4) Mr. Scott Campbell Fisher,
(5) Mr. Jason Garrick Rich,
(6) Mr. Adrian Robert Wallis and
(7) Mr. Steven Hooper
90 & S. 343 of the Penal
Has been divided into 2 charges: (1) S.90 - on court trial &
(2) S.343 - PP decided not to pursue in court
As to the case of the Brinton Group a number of unverified stock certificates were seized and regarded by the public prosecutor as indispensable evidence, that should be confiscated upon conviction, for the unauthorized securities business charge which is currently on court trial.
In such case, if the Criminal Court finds the Brinton Group guilty and agrees with the confiscation, under Section 36 of the Penal Code, the aggrieved victims or the true owners of the confiscated certificates may file their claims with the court within 1 year after the case becomes final.
On the other hand, in case where the charge is dismissed or the court does not pass the confiscation order, all the certificates shall be returned to the entitled owners by the police under Section 85 of the Thai Criminal Procedure Code.
The Brinton Group victims are therefore advised to seek further assistance in this area from local litigators or from the Thai Consulate General.
Cold-call seven escape Thai fraud charges
Richard Salmons - July 4 2002
Australian authorities have suffered a setback in their campaign against cold-calling securities scams after key charges against seven Westerners in Thailand were dropped this week.
The seven were employees of Brinton Group, an alleged "boiler room" that was among the foreign-staffed Bangkok securities firms Thai police swooped on in July last year.
On Tuesday, the Thai Securities and Exchange Commission said prosecutors would drop fraud charges against the Brinton employees due to insufficient evidence.
The seven still face criminal proceedings on a count of undertaking a securities business without a licence. However, the Australian among them, Scott Campbell Fisher, said the authorities had missed the target when they raided Brinton.
"The charges should have been directed against the other operators, who were the ones running for the airport when we were answering questions," he said in a telephone interview from Bangkok. More than 80 foreigners were detained during the raid. Most were deported for working without permits.
In a recent report, the Australian Securities and Investments Commission estimated that international cold-calling stock scams could count as the biggest ever category of financial fraud, having cost Australians $400 million in losses so far.
The Thai SEC said in a statement that it had "used its every effort" to gather evidence regarding the fraud charges, but it could not control how they would be used by the public prosecutor; nor could it explain why the prosecutor had dismissed the charges.
It said the charge of unlicensed dealing - carrying penalties of two to four years' imprisonment and a 200,000 baht ($A8700) fine - was continuing in court with the support of witnesses.
Mr Fisher said he and the other six, all British or Irish, would fight the remaining charge.
"We took legal advice that there was no licence that could be granted for our business," he said. "We registered the company and everyone knew who we were."
Last July, ASIC praised the raids as an example of international cooperation. Yesterday, an ASIC spokeswoman said the difficulty of pursuing the prosecution highlighted the danger of sending money abroad.
A spokesman for the Australian Federal Police said that although the force had no legal mandate to conduct operations overseas, the Thai authorities would have told the AFP about the raids as a courtesy.
"They want someone to be present so, in the event there are any Australians arrested, we can advise the embassy of that for consular purposes," he said.
Mr Fisher said he saw three AFP officers at the Brinton office on the day. "They were just as involved as anyone else," he said.
BIOSECURE GROUP CORP. (OTCBB: BSUR); AIRTECH INTERNATIONAL GROUP, INC. (OTCBB: AIRG); NEWBRIDGE CAPITAL, INC. (Pink Sheets: NBRG); NUOASIS RESORTS, INC. (OTCBB: NUOA); and OASIS RESORTS INTERNATIONAL, INC. (Pink Sheets: OSRI)
Part IV – STILL GAMBLING AFTER ALL THESE YEARS
March 18, 2002
In recent months, NewBridge Capital, Inc. (Pink Sheets: NBRG) has been intimately involved in the affairs of Yes Clothing Company, Inc., BioSecure Corp. (OTCBB: BSUR), Airtech International Group, Inc. (OTCBB: AIRG), and AirSecure LLC. Not so long ago, however, NewBridge was banking on different partners, a pair of "casino and resort" companies called NuOasis Resorts, Inc. (Pink Sheets: NUOA) and Oasis Resorts International, Inc. (Pink Sheets: OSRI). Was that past merely a prelude to future financial statements?
BioSecure and Airtech should not expect NewBridge to generate funds from its interest in NuOasis. By now it's a familiar litany. NuOasis Resorts Inc. is a small financially-challenged public company controlled by NewBridge. Like NewBridge (and now Airtech) NuOasis gives its business address as 4695 MacArthur Court, Newport Beach, California.
NuOasis filed its last financial report in May 2001, a Form 10-Q for the quarter ended March 31, 2001 – just like NewBridge. And also like NewBridge, at last report the executive officers of NuOasis were Fred G. Luke (CEO and director), Jon L. Lawver (Secretary and director), and Leonard J. Roman (CFO and director).
That March 31, 2001 Form 10-Q said that NuOasis "invests in companies that lease, manage and operate hotels, legalized gaming casinos, and related operations." Not surprisingly, that includes companies that have a relationship to Luke, Lawver, or both.
Like NewBridge, NuOasis has found ways to transform balance sheet items from sow's ear to silk purse. For example, the Company sold Fantastic Foods, Inc., its failing, inactive food distribution subsidiary, to Eurasia Finance Development Corp., a private company controlled by Lawver. As part of that deal, Eurasia agreed to assume full responsibility for the liabilities of Fantastic Foods and to walk away from $628,000 that NuOasis owed to its subsidiary. How did this affect the NuOasis financial statement? By shedding the subsidiary, NuOasis was able to recognize a $602,000 gain. But what did shareholders really gain by the handoff to Lawver?
The NuOasis hotel and casino operations, to the extent they existed, had been run through Oasis Resorts International, Inc. - another microcap public company – controlled by members of the Luke-Laver group. In this case, Luke was not an officer, but Lawver was secretary of Oasis and Roman was its CFO. Lawver and Roman also were Oasis directors. Oasis (Pink Sheets: OSRI) last traded on November 28, 2001.
Oasis (together with NuOasis) claimed plans to develop hotels and casinos in Nevada and Tunisia, North Africa, under the "Oasis Resorts" and "Cleopatra's Palace" themes. Through a series of complicated agreements, including some with partially owned overseas and offshore affiliates, Oasis became involved in the construction of Le Palace Resort & Casino in Tunisia, and the operation of a nearby casino. Investors reviewing the NuOasis public filings might easily be frustrated in their efforts to decipher those relationships or to understand just what the Company owned and accomplished.
Until September 2000, NuOasis owned a majority of Oasis (through a NuOasis subsidiary called NuOasis International, Inc.). In fact, at one time the NuOasis shareholders controlled as much as 86% of Oasis. In a maneuver that now seems typical of Luke-Lawver related companies, NuOasis acquired much of its interest in Oasis through a convoluted series of stock swaps and debt forgiveness. How complicated? Consider this convoluted disclosure from the Oasis Form 10-K Annual Report for the year ended June 30, 2000:
The Company…entered into an exchange agreement with NuOasis…a wholly-owned subsidiary of NuOasis Resorts, Inc… to acquire NuOasis' 75% interest in Cleopatra Palace Resorts and Casinos Ltd. ("CPRC"). CPRC had previously acquired all of the equity interest owned by NuOasis in Cleopatra Cap Gammarth, Limited ("CCGL") which intends to operate the Cleopatra Cap Gammarth Casino (the "Cap Gammarth Casino"), a right to re-acquire a 70% interest in Cleopatra Hammamet Limited ("CHL"), which operates the casino Cleopatra Hammamet Casino, and Cleopatra's World, Inc. ("CWI") which operates the Le Palace Hotel & Resort at Cap Gammarth… All of the properties are located in Tunisia. Cleopatra Palace Ltd. ("CPL") is a predecessor company to CPRC, an entity controlled by NuOasis, which previously held the interests in the Cleopatra Hammamet Casino and the Cleopatra Cap Gammarth Casino.
That should be clear to investors, right? But wait, there's more. Oasis goes on to explain how NuOasis gained control:
In connection with the acquisition of CPRC, the Company issued 1,363,450 shares of common stock, common stock purchase warrants representing the right to acquire 7,200,000 shares at $30.00 per share, and issued promissory notes with an aggregate face value of $180 million to NuOasis in exchange for certain assets in NuOasis. At the time of the transaction, Oasis had no ability to repay the notes, and therefore, the notes had an estimated fair value substantially less than the face value at the date of issuance. Based on the enterprise value of Oasis at the date of [its reverse acquisition into a public shell] of approximately $16.6 million, the Company valued the notes at $7 million. On November 15, 1999, management of Oasis agreed to extinguish the notes and cancel the 7,200,000 warrants for the issuance of 8,111,240 shares of the Company's common stock …such that the NuOasis shareholders control approximately 86% of the Company's issued and outstanding common stock.
Putting it somewhat more simply, does that mean Oasis received stock in NuOasis in exchange for an uncollectible promissory note – and that NuOasis later exchanged that note for a majority of the Oasis shares?
Efforts to establish the Tunisian operation ultimately seem to have failed. As best we can determine, the Le Palace Resort was never completed and Oasis was left with past-due trade payables of approximately $6 million and litigation involving its obligation to make lease payments on the property.
Oasis had yet another opportunity to practice its stock swapping technique in September 2001. On September 27, 2001, Oasis said that it had signed an agreement with Brinton Group Inc. to exchange $15 million worth of Oasis stock for $4 million in cash and approximately 1.1 million shares of an Over the Counter Bulletin Board company called Virtual Gaming Technology, Inc (OTCBB: VGAMD). At the time, Lawver indicated that Oasis expected to close on the deal, with "partial funding of the $4 million equity investment within the next few weeks."
The press release announcing this transaction was puzzling, particularly since it did not indicate any previous relationship between Virtual Gaming and Oasis. By September 2001, Oasis had ceased filing public reports, but earlier filings suggested that the two companies were business partners long before the Brinton Group deal came to light.
According to its Form 10-K for the year ended December 31, 2000, Oasis first entered into a stock exchange agreement with Virtual Gaming in December 1999. Then, again according to the Form 10-K, on August 31, 2000 Oasis issued "4,802,032 shares of its newly issued common stock for 1,200,508 shares of [Virtual Gaming Technology]." In keeping with the accounting practices of the other Luke-Lawver companies we have reviewed, Oasis attributed a valuation to those Virtual Gaming Technology shares based upon the purported value of the Oasis stock that had been issued in exchange.
What was the true market value of the Virtual Gaming Technology stock? Maybe that depends on which Virtual Gaming Technology we are talking about – assuming the correct entity can be found. A public company called Virtgame.Com Corp was called Virtual Gaming Technologies, Inc (not Technology) until August 1999. But that name change came several months before Oasis claims it entered into its first agreement with Virtual Gaming Technology.
Then there is a company called Virtual Gaming Enterprises, Inc., whose trading symbol is VGAM. That would appear to be the Company in question – even thought the trading symbol differs from VGAMD, the symbol mentioned in the September 27, 2001 press release. At various times, Virtual Gaming Enterprises has traded under the symbols VGAM, VGAMD and VGAME (the latter coming into play when that Company jeopardized its OTC Bulletin Board listing by not making timely public filings).
In fact, on September 18, 2001, the OTC Bulletin Board changed Virtual Gaming Enterprise's symbol from VGAM to VGAME, indicating that the Company would be removed from the OTC Bulletin Board unless it filed current public reports within 30 days. Virtual Gaming seems to have missed that deadline. The Company now trades on the Pink Sheets, under the symbol VTGE, at about 5 cents a share. On September 27th Virtual Gaming Enterprises stock was priced at 50 cents a share.
The September 27th press release failed to mention that Virtual Gaming Enterprises had been threatened with delisting from the OTC Bulletin Board. Nor did it disclose that the SEC was considering bringing an enforcement proceeding against Virtual Gaming Enterprises. Then again, the press release didn't bother to tell investors that Virtual Gaming Enterprises had no business, no cash and no revenues.
Why would Oasis agree to exchange $15 million worth of its stock for $4 million in cash and 1.1 million Virtual Gaming shares that were then worth no more than $660,000 (based on the market September 27th market price)? Was the transaction even possible? On September 27th Oasis stock closed at 10 cents a share. That meant that Oasis would have had to issue 150 million shares to Virtual Gaming. That hardly seems likely. When it filed its last Form 10-Q on July 3, 2001, Oasis was only authorized to issue 75 million common shares.
Of course, it is also difficult to understand why Oasis did not seem to know the correct name of the Company with which it was dealing.
Since Oasis no longer files financial reports it is impossible to determine the fate of the latest Virtual Gaming transaction, but investors cannot be terribly optimistic after considering the fate of the Brinton Group. Brinton, as it turns out, was a boiler room operation run by an individual named John Kealy, and operating out of offices in Bangkok, Thailand.
Like its counterparts in the United States, the Brinton boiler room apparently conducted an illicit telemarketing operation, using high-pressure tactics to sell so-called "hot stocks" that generally turned out to be worthless. Brinton may have bilked investors out of hundreds of millions of dollars.
Brinton and Kealy were reportedly involved with peddling shares of both Oasis and Virtual Gaming. According to a November 19, 2001 article in "Time Asia," the Brinton team prodded investors in Australia to invest in Oasis by telling them that the Company was a global casino operation run by the team that had set up a restaurant chain featuring Gary Coleman, star of the 1980s TV show Diff'rent Strokes. They failed to mention, however, that the only jewel in that chain was a failing restaurant in Denver, Colorado.
“Time Asia" notes that Brinton also pushed shares of Virtual Gaming, an Internet gambling firm run by one Virgil Williams, who was once tied to a boiler room scam in San Diego, California.
On July 26, 2001, two months before Oasis announced the Virtual Gaming Technology transaction, the Securities and Exchange Commission of Thailand (in conjunction with the Federal Bureau of Investigation, U.S. Customs, the Royal Thai Police, the Thailand Anti-Money Laundering Office, The Thai Immigration Bureau and the Australian Federal Police,) raided Brinton's offices. Apparently that was no easy task since Brinton allegedly kept moving around to avoid detection.
The Thai authorities charged Brinton with running an unlicensed securities firm and engaging in fraudulent activities, including the use of high-pressure sales tactics. On September 20th, seven executives of the Brinton Group, including Kealy, were charged with illegally conducting a securities business without a license. That offense carries a maximum penalty of five years in jail and a fine of 500,000 Thai baht (about $11,563 U.S.).
There has been no further word on the relationship between Brinton and Oasis, or that $4 million that Oasis was slated to receive. We suspect that Brinton and those seven executives may have been spending their funds on lawyers.
What about the plan for Oasis to develop a casino resort in Nevada? According to the public disclosures, Oasis owned a 20 acre interest in partially developed land in Oasis, Nevada. That land housed a six pump truck stop, convenience store, motel and café – all of which were out of business.
NuOasis said it planned to use the property for a 500 room resort hotel with a 30,000 square foot casino, entertainment complex and rodeo facilities. The development of this facility, however, could present some practical and logistical problems. Before they can use the proposed facility, customers would first have to find Oasis, Nevada, and that will be no mean task.
We located Oasis in a listing of Nevada Ghost Towns. The town is not near any major population center or airport. It has no industry or infrastructure, and no significant human population. West Wendover, Nevada, the nearest town with casinos and hotels, is over 35 miles away. But West Wendover is on the Nevada-Utah border, so residents of Utah may be willing to travel as far as West Wendover to gamble. But why would they ever find it necessary to travel those extra miles to the Ghost Town of Oasis?
There is nothing to suggest that it would be practical to construct a gambling complex in Oasis, where the work force would come from if it ever were built, or who is likely to travel there. We understand that prairie dogs make poor croupiers. We suspect they make unappealing customers as well.
Like NewBridge, Oasis and NuOasis have stopped filing financial reports with the SEC. At the time it filed its last Form 10-Q, for the March 2001 quarter, NuOasis owned less than 50% of Oasis, and was no longer consolidating the Oasis financial results. As a result, NuOasis had no revenues at the time.
Before they ceased to file any public reports, however, Oasis and NuOasis each had at least one last mission to accomplish. On June 28, 2001, NuOasis filed a Form S-8 registering 8 million shares of stock for certain, unnamed, employees, officers, directors, advisors and consultants. Then, on July 12, 2001 Oasis filed a Form S-8 registering 2.5 million shares of stock that would be issued to unnamed key employees, officers and consultants. Neither Company has filed an amended Form S-8 identifying the recipients of those shares.
So, we return to our original inquiry, and we are left with a series of troubling questions. How can NewBridge help Airtech relieve its debt? What is the current condition of NewBridge – which no longer files financial reports? Is there any substance behind all of those inter-company stock trades, assumed valuations, and deals with related parties under common control?
Then there's this. Who will be running AirSecure, and how will that Company be funded? Do TFG and its secret "founders" have any realistic chance of participating in federal home security? Will all of these companies just keep shifting assets and obligations among themselves? In other words, to borrow a phrase from Gertrude Stein, is there any "there" there? Lots of questions. Far too few answers.
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