Michael Newman
This
picture is confirmed to be Michael Sydney Newman, aka Mike
Weissman, aka Marcus Wiseman
Briton held in £9m stock scam 11/02/03
A British man suspected of defrauding investors in Britain, Australia
and New Zealand in a £9.5 million stock scam has been arrested
in Laos, a diplomat and US officials said.
Michael Newman was arrested along with two Thai citizens
at the international airport in the Laotian capital, Vientiane,
on September 24 and 300,000 US dollars (£176,000) was seized
from him, state media had reported. Information is restricted in
the tightly-controlled communist country.
The reports said all three were charged with trying to take "money
out of the country without permission". It was not clear what
punishment they face.
The British and US embassies declined to comment. The Thais' identities
were not immediately known.
Newman allegedly ran a so-called "boiler room" in Vientiane
for several years from a building on the banks of the Mekong River,
according to several sources and US documents.
They said last week that Newman, whose age and hometown were not
immediately known, employed dozens of Americans and Britons to
fraudulently sell stocks to overseas investors by telephone.
Boiler room workers phone potential investors and sell shares
at inflated prices, or in non-existent companies, usually for high
commissions.
Newman and 20 others have also been named in a civil lawsuit filed
separately by the US Securities and Exchange Commission (SEC) in
the state of Utah on October 16.
The suit says the defendants took part in a "massive scheme
to defraud foreign investors of more than US 16 million".
At least £7 million, raised in January-September 2003, went
to Newman, while some of the other defendants divided up the rest,
said an SEC lawyer, Thomas Melton.
"We are still finding more money," he told The Associated
Press by telephone from Salt Lake City, Utah.
On October 16, The FBI also raided offices of at least one company
linked to the scheme in Salt Lake City, Mr Melton said.
It is not known how US authorities will proceed with the case.
The US and Laos have no extradition treaty.
Western diplomats in Vientiane have been denied access to Newman,
who is believed to be at a jail in the capital, said a foreign
diplomat.
The SEC lawsuit claims Newman and the other defendants used high-pressure
tactics on investors, mainly in Britain, to sell shares in five
US companies: Stem Genetics, F10 Oil & Gas Properties,
Diversified Financial Resources Corporation, Valesc Holdings and
NCI Holdings.
The lawsuit says some were front companies with no assets, and
their stock prices were manipulated to impress potential investors.
It claims Newman and his US accomplices defrauded more than 1,100
investors and transferred it to offshore accounts.
A source close to one of Newman's associates told the AP that
up to 60 people worked at the recently disbanded boiler room.
"If you were good you could probably make three to four thousand
dollars a week," he said. "They were paying everybody
in US dollars and it's tax free."
A similar scandal rocked Thailand in 2001, when dozens of foreigners
were arrested in Bangkok and deported.
AP
Britons 'fleeced by the boys from the Boiler Room'
By Alex Spillius in Laos and Becky Barrow in London
(Filed: 08/11/2003)
More than 1,100 investors have lost up to £200,000 each after handing
over their money to a web of companies that allegedly used the unscrupulous
business tactics depicted in the film The Boiler Room.
The ingredients of this type of boiler room are a ruthless bunch of sales
people and a list of potential investors who like to take risks.
One of the alleged masterminds is Michael Newman, a Briton, who
based his operations in Laos, the South East Asian country sandwiched
between Thailand and Vietnam.
This was - in the words of America's Securities and Exchange Commission
(SEC), which has launched an investigation - "a massive scheme to
defraud foreign investors", and one that raised more than £10
million in just nine months this year.
Mr Newman is one of 21 individuals and companies named by the SEC in
its civil action which chronicles the spider's web of companies, countries
and bank accounts used to perpetuate the alleged fraud.
His salesmen, who persuaded people from Britain, Australia and New Zealand
to invest tens of thousands of pounds, were based in the former Brunei
embassy, a palatial building with high gates.
Locals say that they did not fit easily into the charming, socially conservative
city of Vientiane, the capital of Laos, situated on the banks of the
Mekong river.
Foreigners tend to be backpackers who come to Laos to visit its Buddhist
temples and shrines, but these people were different.
One foreign resident said: "Many were wide boys with crew cuts and
tattoos. A lot of them sounded very East End. You just don't see people
like that here. They were very scary.
"They started picking fights in bars. One time they broke a pool cue over
the head of a tourist. Another time 20 of them sat with their shirts off in a
popular restaurant with prostitutes from Thailand on their laps."
One drunken night some boasted about earning nearly £2,500 a week
which was paid in cash, a huge wage for anybody living in one of the
world's poorest countries.
Investors, such as Richard, a 40-year-old geological consultant who put
in £50,000, were left feeling angry and humiliated after backing
what they thought were small American companies.
He said: "It was very slick. Initially, they were not that pushy.
I looked at the companies' websites, and it all seemed legitimate.
"I suppose you could say it was greed, but I thought of securing my daughter's
university education, paying off the mortgage, even retiring a bit earlier."
Little is known of Mr Newman, who also goes by the name of Marcus
Wiseman. He is in custody in Vientiane after being arrested in September
while allegedly attempting to leave Laos with nearly £180,000 in
cash. The legal limit is £1,200.
It is understood that he comes from north-west England, and has moved
between Thailand and Laos for several years.
Official SEC documents allege that the investment company and its associates,
mainly Americans, "lied to investors about the companies they promoted,
and kept the vast majority of investor funds for themselves, allowing
only a minuscule amount of the funds to go to the companies they promoted".
The share price of the various companies appeared to rise, but this was
largely due to insider dealing.
The mostly British salesmen were based in Laos, but it is claimed that
they pretended to be in Japan and worked for a company registered in
the British Virgin Islands. Some of Mr Newman's associates were from
Salt Lake City, Utah, the Mormon capital of America.
A judge in Utah has granted a temporary restraining order and asset freeze
on Sukumo, one of the companies involved. Mr Newman is president of the
company.
Ken Israel, the district administrator for the SEC, could offer little
hope for the investors. He said: "It would be very speculative to
say we may actually find money that could be recovered."
Briton's £180,000 confiscated in Laos
Laotian authorities have seized £182,000 from a British businessman
and two Thai colleagues when they arrived at the capital's international
airport.
Officials at Wattay Airport in Vientiane confiscated the funds last Wednesday
and charged the unidentified men of trying to take "money out of
the country without permission" and violating a foreign currency
decree.
It was unclear whether the suspects were detained, but the report said
the men "are under legal procedures" and the confiscated funds
are being held at the Bank of the Lao People's Democratic Republic.
Laotian officials were not immediately available for comment.
A spokesman at the British Embassy in Bangkok said consular officials
were aware of reports about the seizure and were seeking clarification
from Lao authorities. Britain does not have an embassy in Laos.
Associated Press - 29th September 2003
November 09, 2003
Briton arrested in £12m shares scam
Michael Sheridan, Bangkok and Peter Conradi
IT looked like another routine trip for Michael Newman as the British
businessman sauntered past green-uniformed guards at the quiet airport
in Vientiane, the capital of Laos, to check in for a Thai Airways flight
to Bangkok on September 24.
To his dismay, however, customs officials pulled him aside. When
they opened his bag they found that it contained $300,000 (£177,500) - a
vast sum in a country with an annual gross domestic product of £190
a head.
It is against the law to take more than £1,200 out of Laos without
official approval. Newman was detained and no outsider has been allowed
to see him since.
As the Lao authorities probed deeper, they found that Newman, 42 - who
has also used the name Marcus Wiseman - was already under surveillance
by American government investigators.
The businessman emerged this weekend as the central figure in a “boiler-room
racket" alleged to have defrauded 1,100 investors in Britain, Australia
and New Zealand of more than £9.46m in eight months this year.
His planned trip to Thailand, with a cash-filled suitcase, is believed
to have been one of many that he made.
Sources close to the inquiry said it had found traces of more than £12m
transferred through bank accounts in Laos controlled by Newman - who
has been named by the US Securities and Exchange Commission (SEC) as
a defendant in a lawsuit seeking to freeze his assets and get repayment
of the funds.
The alleged fraud may be much larger. British regulators are also studying
the case with a view to possible action on behalf of investors, some
of whom bought tens of thousands of pounds of shares - now almost worthless.
They were sold these over the telephone by people believed to have been
working for Newman in his “boiler room" in Vientiane.
Some of the victims are considering a class action against banks in America
which they accuse of continuing to handle payments to Newman's companies
after warnings of possible fraud.
Robert Clark, 39, a builder from Bracknell, Berkshire, who lost £20,000,
said he sent an e-mail in June to a bank in Arizona to which he had transferred
the money, pointing out his suspicions. The bank is among three named
by the SEC in the report as having been used by Newman's alleged accomplices
to transfer money from investors to Newman's account in Bangkok.
“The banks did not do anything at the time to stop that," Clark said. “If
they had knowledge that this was happening, they should have done something about
it."
Newman's position is under review by a committee including officials
of the Central Bank of Laos, the police, the foreign ministry and the
state prosecutor's office.
Sources in Vientiane said the businessman was being held under “light" conditions
of detention at the immigration department and was able to enjoy meals
sent in to him from L'Opera, the best Italian restaurant in the city.
Pressure from the American and Australian governments has nevertheless
prompted the regime to take what one American official called “a
very serious view of this case".
A British diplomat flew to Vientiane from Bangkok last week to seek consular
access to Newman, but was refused permission to visit him. There is no
British embassy in Laos.
The operation is believed to have been centred on a “boiler room" in
a mansion that once housed the embassy of Brunei. A sign on the door
announced it as the headquarters of International Investment Holdings,
a company in the Sukumo Group controlled by Newman.
It contained 50 cubicles from which Sukumo salesmen - many of them British - subjected
potential clients to high-pressure telephone sales pitches to buy shares.
Police also found scripts in each cubicle detailing how staff were to
persuade customers to send money to nominated escrow accounts in the
United States. The premises, together with another suite of offices inside
the former South Korean embassy, have been sealed.
Vientiane, a slow-paced town of dusty streets and Buddhist temples, normally
attracts small numbers of western visitors who come in search of peace
and eastern culture. By contrast, the Sukumo sales team had spent freely,
boasting in local bars of being paid up to £2,366 a week.
“They roared around town on motorbikes and brought Thai girls up from Bangkok," said
one western resident.
“The Laotians were shocked by their aggressiveness and eventually somebody
must have decided to act."
Newman also reputedly opened a nightclub, known locally as the “Blue
Member Club", on the outskirts of Vientiane, mainly to cater for
the salesmen. He is believed to have shares in a similar establishment
in Bangkok.
Court documents filed by the SEC in Salt Lake City, Utah, on October
16 allege that Sukumo Group Ltd and five other companies which Newman
controlled were central to “a massive scheme to defraud foreign
investors of more than $16m".
According to the SEC documents, Sukumo told investors that their money
was going to buy shares in five small American companies specialising
in potentially high-yielding fields such as genetic research.
The SEC alleges that Newman and others “lied to investors about
the companies they promoted and kept the vast majority of investor funds
for themselves". Some directors of the companies also allegedly rigged
the prices of their shares and made false claims about the businesses.
The SEC has named 21 defendants in the civil lawsuit, including two Utah
men, Gino Carlucci, 25, and David Wolfson, 24, who, it alleges, formulated
the scheme with Newman. It accuses the three men of signing offshore
agreements under which 70% of the money sent by investors was paid over
to Newman as Sukumo's “commission".
Most of the British investors were owners of small businesses and company
directors. Many began with modest investments of £3,000-£5,000,
but were gradually persuaded to part with £20,000 or more after
the first shares they bought appeared to be performing well.
It was only later that they found the shares were “restricted":
they could not be sold for a year, by which time they were worthless.
The salesmen continued calling until September, about a fortnight before
Newman's arrest.
Paul Plummer, 40, from Bradford, West Yorkshire, who bought £23,000
of shares in three tranches earlier this year, said that he considered
his money lost. “My life savings have gone," he said.
A typical sales pitch induced gullible savers to buy stock in a small
American company called Stem Genetics, promoted as an exciting
opportunity to cash in on cutting-edge research.
According to the SEC, Stem Genetics was “nothing more than a shell
company" without even any researchers. Nonetheless, by June it had raised
more than £2.95m from investors persuaded of its potential by Newman's
sales force.
Sukumo's share of the take was transferred electronically from America
to Laos and withdrawn in cash by Newman, who would take the money in
suitcases to Bangkok, said sources close to the American investigation.
It is not clear whether there are any grounds for charges against Newman
under the Laotian legal code, apart from those related to the alleged
currency violation. Local law allows the authorities to detain suspects
for up to a year without trial.
Apparently Newman's aka is Mike Weissman in Thailand and Laos.
Lincoln Marketing Ltd as
mentioned above. Directors are two companies.
A common name through out is David Grant Sinclair who is the accountant.
He is linked to 13 other companies.
Is this another company
he is involved with?:
http://www.shareholder.com/Common/Edgar/1098277/936392-03-861/03-00.pdf
Mr. Newman was in Vientiane. He is being detained in the
Immigration office according to http://www.vientianetimes.com/Headlines.html
Information for authorities could be sent to: Info.Bangkok@fco.gov.uk or
call Tel: + 66 (0) 2305 8333 to the British Embassy in Bangkok.
Now, in order to capitalize on this, and Newman's current situation.....as
an investor, and appreciative of his Governments courageous actions
in tackling this politically well connected criminal, please praise
the Prime Minister by sending a short appreciative fax and praise
to:
Prime Minister Bounyang Vorachit,
Office of the Prime Minister,
Rue Sisavat, Vientiane, Laos.
Fax: + 856 21 414009 (c/o Ministry of Foreign Affairs)
or write to the diplomatic representatives of Laos accredited to your
country.
An overview of relations
with the E.U. and the LAO P.D.R. (Peoples Democratic Republic) supports
the notion that one could expect some sort of co-operation from
Laos with regard to Newman.
"On the 15th May 2002, the E.C.adopted a 5 year strategy for its financial
assistance to the Lao P.D.R. At the same time the commission announced that over
the next three years 2002-2004, 14 million euros has been earmarked for the Laos
to finance this strategy. The strategy is prepared in consultation with the Government
of the Lao P.D.R. and E.U. member states. Considering the poverty profile in
the Lao P.D.R, rural development will remain the most important area of the E.C.
assistance programme, together with the social sectors, education and health,
but there will be increased attention towards trade sector support."
europa.eu.int/comm/external_relations/lao/intro
MICHAEL SYDNEY NEWMAN (A.K.A. MARCUS WISEMAN)
http://www.sec.gov/litigation/complaints/comp18413.htm
Paul Hilton
A Mr. Paul Hilton is said to drive a red Lamborgini around Laos
and Thailand and is believed to be in charge of Sukumo and running
a boiler room in Sri Lanka.
He is a close pal of Hutchinson and Bell the two owners of Premium Placements
the BDC and Int Bio scam organizers.
Apologies, if this is not the same person.
December 6, 1999
Paul Hilton jumps ship
Paul Hilton, after 18 years at the Denver law firm Davis, Graham & Stubbs,
has moved over to Brobeck, Phleger & Harrison, where he becomes
a partner.
Hilton will work in the Denver office of the San Francisco-based
law firm and will specialize in initial public offerings http://denver.bizjournals.com/denver/stories/1999/12/06/daily2.html
BUSINESSMAN SENTENCED TO 7 YEARS JAIL
EKAPHONE PHOUTHONESY, February 16, 2004
A British business, Michael Newman, who was arrested last September while
attempting to smuggle money out of Laos, has been sentence seven years
and six months imprisonment and ordered to pay nearly US$6 million in
fines and back taxes, a local newspaper reported last week.
The Vientiane People's Court sentenced Newman, with two of his Thai friends,
in late January. According to a report by the Pathet Lao newspaper, the
accused businessmen were charged with many crimes such as owning communication
equipment without permission, possession of drugs and breaking the country's
tax payment regulation.
Newman, 42, a British national was also found guilty of conducting illegal
business operations, which were harmful to the Lao economy.
According a press release from the court given to the newspaper, Newman
employed foreigners to work in Laos without permission from the Ministry
of Labour and Social Welfare from 2002-2003.
In this case, he was fined US$229,050 and 5 million kip. He was also
found guilty of breaking vehicle control regulations and illegally owning
radio communication equipment. In this case, he was fined US$46,565.
He was asked to repay US$1,448,800 for illegally making international
telephone calls and fined 50 per cent of the smuggled money (US$310,
000).
The press release says that the authority has impounded US$300,000 and
some items of value from Newman, and these are now on sale in order to
raise the money to pay the fines (which amount to US$5,937,000) while
some money left will be returned to him.
Bounlab Luangkhamdeng, a Thai national who was arrested with Newman,
was also sentenced to two years and six months imprisonment and fined
500,000 kip and another 800 million kip for income tax, but according
to the court, he has already paid 400 million kip. Phongchay Sayaseng
another Thai national was given a two- year term of imprisonment and
fined 500,000 kip and 365 million kip for income tax.
According to the press statement the court heard that in June 2001, Mr
Newman came to Laos to see Mr Bounlab and discuss the possibility of
setting up a company. Later the two men formed the Lao-Inter company
at Ban Samakyxay. Newman took 80 percent of the total investment while
Mr Bounlab took 20 per cent. At first the company secured 200,000 customers
through some assistance from a company in the United States. During this
period of time, there were 30 foreigners working in the company.
At the beginning of 2002, the company (which was selling shares) formed
a branch in Vientiane and invested another US$150,000 in communication
equipment. In this branch, Mr Phongchay was given a job as a law co-ordinator.
In June 2002, the company invested more than US$400,000 to expand its
operations in Vientiane and employed 90 foreign workers.
The company ran its business at night because it was daytime in the target
countries and worked the business by telephone, email and the Internet.
It operated three Internet channels, 17 telephone numbers and one fax.
The company's income was deposited into an account at the Lao-Viet Bank
and the Thai Military Bank in Vientiane so as they could withdraw it
easily. The company had registered funds of US$223,000 and a current
account of US$ 45,400.
Initially, the business operation of the company looked simple, however
it was not. It turned out that the company worked secretly and Bounlab's
and Phong's salaries were said to be as high as US$10,000 per month,
according to the press release.
According to earlier reports from Associated Press and other foreign
news services Newman allegedly ran a so-called "boiler room" in
Vientiane for several years, employing dozens of Americans and Britons
to fraudulently sell stocks to overseas investors by telephone.
Boiler room workers phone potential investors and sell shares at inflated
prices, or in non-existent companies, usually for high commissions.
The reports said Newman and 20 others had also been named in a civil
lawsuit filed separately by the US Securities and Exchange Commission
(SEC) in the state of Utah on October 16.The suit says the defendants
took part in a "massive scheme to defraud foreign investors of more
than US$ 16 million".
On October 16, The FBI also raided offices of at least one company linked
to the scheme in Salt Lake City.
The SEC lawsuit claims Newman and the other defendants used high-pressure
tactics on investors, mainly in Britain, to sell shares in five US companies:
Stem Genetics, F10 Oil & Gas Properties, Diversified Financial Resources
Corporation, Valesc Holdings and NCI Holdings. The lawsuit says some
were front companies with no assets, and their stock prices were manipulated
to impress potential investors.
It claims Newman and his US accomplices defrauded more than 1,100 investors
and transferred it to offshore accounts.
Michael Sydney Newman, Allen Z. Wolfson, David M. Wolfson Arrested for
Boiler Room Stock Scam, Stem Genetics
04/06 - Three men who ran a bogus embryonic stem cell research company
in Utah alleged to have defrauded New Zealanders, Australians and Britons
of millions of dollars have been arrested, the Salt Lake Tribune newspaper
reported today.
The company never performed any research and was a shell to sell bogus
stock to people worldwide, prosecutors say.
The men who operated the fraudulent company have been accused in the
United States of bilking overseas investors of US$6.6 million (US$10.1
million) in what a federal grand jury said was a scam to sell shares
to investors outside the United States.
The defendants have said in court filings that because all their "investors" lived
outside the United States, US courts should have no jurisdiction, but
American authorities have said enough activity took place on US soil
for them to be prosecuted there.
Michael Sydney Newman, 45, (also known as Marcus Wiseman), Allen Z.
Wolfson, 60, and his son David M. Wolfson, 26, were indicted by a grand
jury on Wednesday, charged with nine counts of wire fraud in their scheme
to prey on people hoping to for miracle cures from the disputed research.
According to the Tribune, the men established the company Stem Genetics,
registered it in Salt Lake City, and claimed it to be conducting embryonic
stem cell research and the three men sold stock in the company from October
2002 through August 2003.
They targeted overseas investors in places such as New Zealand in order
to avoid having to register in the United States, according to the indictment,
which was filed in the US District Court in Salt Lake City.
The Tribune reported that the men charged artificially high prices for
the stock, but told investors that it would soon appear on the NASDAQ
stock exchange for US$7 a share, about 20 per cent more than the investors
were paying for the phony stock issues.
Melodie Rydalch, a spokeswoman for the US Attorney's Office in Salt
Lake City, told the newspaper that federal officials have recovered about
US$1.5 million of the $U6.6 million the trio took from more than 600
investors.
Allen Wolfson is awaiting sentencing in New York on other financial
fraud issues, and Newman is believed to be in Los Angles charged with
other financial fraud as well.
Newman was arrested in 2003, along with two Thai nationals at the international
airport in the Laotian capital, Vientiane, and accused of defrauding
New Zealand and other investors in a US$16 million stock fraud involving
five United States companies, the US Securities and Exchange Commission
said at the time.
The SEC said Newman and the other defendants used high-pressure tactics
on investors to sell shares in five US companies: Stem Genetics, F10
Oil & Gas Properties, Diversified Financial Resources Corporation,
Valesc Holdings and NCI Holdings, The Scotsman newspaper reported.
It said some were front companies with no assets, and that their stock
prices were manipulated to impress potential investors.
Newman has already been convicted in Laos: he was sentenced in February
2004 to 7-1/2 years in prison and fined nearly US$6 million. The offences
included conducting an illegal business operation, making illegal international
telephone calls, violating tax rules and possessing drugs.
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