IDA Rampart target Kasman abruptly fires defence lawyer
2002-09-24 18:12 PT - Street Wire
by Brent Mudry
Former Rampart Securities chairman and chief executive officer Barry
Kasman, one of two Rampart executive hold-outs, has abruptly
terminated his lawyer on the eve of a three-day Investment Dealers
Association of Canada hearing which may cost, or greatly curtail,
his controversial career in the brokerage industry. Mr. Kasman,
who won a brief adjournment at the scheduled start of the IDA hearing
on Tuesday, is expected to return Wednesday to identify his new
lawyer, replacing Helen Daley, and the hearing itself is expected
to be rescheduled to next Monday at the earliest.
In one of its harshest prosecutions ever, the IDA launched its case
against Rampart and its executives on Aug. 2, 2001, scuttling the
plans of parent Rampart Mercantile, a Canadian Venture Exchange promotion,
to acquire BayStreetDirect, which featured Bay Street dignitaries
Jim Beqaj and Richard Nesbitt, for $6-million.
The IDA, the self regulatory organization, booster and lobbyist
for the brokerage industry, had quietly expressed concerns about
Rampart Securities for more than four years, but its prosecution
was launched just three days after Alec Popovic, a respected former
RCMP commercial crime senior officer, began work in his new job as
the IDA's vice-president of enforcement.
Mr. Kasman presided over Rampart since it acquired his Merit
Investment, another trouble-plagued Bay Street brokerage, in
1997. Under Mr. Kasman's watch, Rampart was rife with compliance
and capital deficiency problems dating back to its Merit acquisition,
and served as a key conduit brokerage in numerous dubious OTC Bulletin
Rampart and Mark Valentine's Thomson Kernaghan, also shut
down by regulators, were the only two Canadian brokerages named last
month as key conduits in Operation Bermuda Short, a two-year undercover
joint FBI-RCMP sting which snared 60 penny stock players, including
20 Canadians, either for agreeing to bribe corrupt fund managers
to buy penny stock promotions or to launder drug money for operatives
from Colombia's Cali cocaine cartel.
Mr. Kasman's sudden switch of lawyers comes six days after fellow
Rampart senior executive Nicolas Tsaconakos, the now-defunct
brokerage's former chief operating officer and chief financial officer,
was fined $175,000 in a consent settlement with the IDA approved
Sept. 17. Mr. Tsaconakos, who joined Rampart in September, 1999,
also agreed to a lifetime bar on serving in any regulatory compliance
or regulatory supervision position at any brokerage in Canada.
Former Rampart president Henry George Cole settled two months
ago, agreeing to a $125,000 fine and severe restrictions, in a consent
settlement approved July 23. Mr. Cole, a key Rampart executive since
September, 1997, also agreed to a 10-year suspension from serving
in any significant management position at any Canadian brokerage,
all the way down to the assistant branch manager or compliance officer
In the wake of the IDA's uncollectable $3-million headline fine
imposed Jan. 25 against bankrupt Rampart Securities, Mr. Kasman and DM, the chairman and CEO of parent Rampart Mercantile and
former head of the brokerage, have yet to settle with the regulator.
Mr. Kasman arguably has the most to lose, as he was the key transition
man from Merit to Rampart, and took the reins at the merged firm.
The IDA has chronicled capital and compliance deficiencies at Rampart
Securities dating back to early 1997, just after Rampart Mercantile
acquired Merit, a troubled, small 35-year-old Toronto-based brokerage
which had taken a disastrous $1-million hit from offshore client
accounts in a Vancouver-Calgary rig job. Rampart Mercantile bought
Merit for just $1.2-million in August, 1996, and changed the brokerage's
name to Rampart Securities in mid-1998.
In 1995, Merit's Toronto head branch took a million-dollar hit when
regulators halted trading in Ultra Pure Water Systems (Canada)
Inc., a wash-trading rig job involving controversial Vancouver
promoter Gordon Brent Pierce. The Ultra Pure ring left $2.36-million
in unpaid debits at seven brokerages when the Alberta Stock Exchange
abruptly halted the stock in March, 1995, led by $960,000 in debits
in UPW accounts handled by Merit broker Stephen Traub.
Although Mr. Pierce's behind-the-scenes Ultra Pure involvement was
first revealed by Stockwatch in April, 1995, rumours of Merit's million-dollar
hit had already been the talk of Howe Street and Bay Street. A number
of Mr. Pierce's fronts, including Ultra Pure president Grant
Atkins and Harvey Gorsuch, key players in the promoter's
former Vancouver Stock Exchange disaster, Cost-Miser Coupons,
opened or dealt in dubious offshore accounts at Merit, although Mr.
Pierce was careful to keep his name off any public documents for
The Ultra Pure case was the feature of a major probe by the commercial
crime section of the RCMP. The Mounties capped up a 13-month criminal
investigation in April, 1996, with a recommendation that charges
be laid, but a Crown prosecutor subsequently "no-charged" the
file, in a controversial decision. Mr. Pierce's long-time front,
Mr. Atkins, is now busy with another dubious penny stock promotion, GeneMax,
which targeted Vancouver brokerages Global Securities and Union Securities
in a naked shorting suit on Sept. 4.
Although Merit head Barry Kasman had the misfortune of watching
his firm sink after being torpedoed by at least one barely supervised
broker and a number of dubious offshore accounts, he went on to head
Rampart, which now finds itself accused of failing to supervise its
brokers, verify identities of offshore account clients and other
compliance troubles, including failing to take acceptable antimoney-laundering
With Mr. Kasman at the helm, Rampart, like Merit before it, had
the misfortune of attracting a number of dubious clients, none of
whom are identified in the IDA's detailed 26-page notice of hearing.
The latest notable Rampart client to be flushed out is Jeffrey
Ray Senger, 36, of West Palm Beach, Fla., who was arrested
by the FBI on Aug. 14 in Operation Bermuda Short. In a 23-page
grand jury indictment, returned on May 21 in United States District
Court for the Southern District of Florida, and unsealed the day
after his arrest, Mr. Senger faces a total of 28 counts in two
separate wire, mail and securities fraud conspiracy.
Rampart is featured prominently in the first case, in which Mr.
Senger faces 27 counts for masterminding the pump-and-dump rig job
of Lifekeepers International, which included a small network
of bribed brokers, from November, 1998, through March, 1999, which
resulted in investor losses of $3-million. (All figures in U.S. cases
are in U.S. dollars.) In the second, Mr. Senger was snared in Bermuda
Short's bribed mutual fund manager sting, allegedly agreeing to pay
a 50-per-cent kickback for an $8-million investment by the fictitious
fund in Piccard Medical and International Stores.
If convicted, Mr. Senger faces maximum statutory terms of imprisonment
of five years for each count of mail, wire and securities fraud conspiracy,
10 years for securities fraud, and 20 years for money laundering.
In a co-ordinated action, the United States Securities and Exchange
Commission also named Mr. Senger in a civil complaint relating to
a later pump-and-dump of Lifekeepers, from November, 1999, through
February, 2000. His co-defendants in this action are broker Brad
M. Nirenberg, 38, of Coral Springs, Fla., and Norman F. Piatti,
48, of West Palm Beach, Fla., the president and CEO of Lifekeepers.
The identity of Mr. Senger's employer should have caused a few red
lights to go off in Rampart's compliance department. Mr. Senger controlled
a branch of Baxter Banks & Smith, a junky U.S. brokerage
later shut down by regulators. (In the unrelated Maid Aide case,
Las Vegas penny stock lawyer Max Tanner and a number of licenced
and unlicenced Baxter Banks brokers, virtually all since convicted,
used Howe Street brokerage Pacific International Securities,
facing a landmark British Columbia Securities Commission hearing
Oct. 7, as a key conduit for illicit offshore trading. A second Canadian
brokerage is also believed to have been used by the Maid Aide ring,
but was never identified in court filings.)
The grand jury indictment claims Mr. Senger acquired large blocks
of Lifekeepers shares from November, 1998, to January, 1999, directed
Baxter Banks boiler room brokers to flog the stock in return for
secret kickback commissions, manipulated the stock and dumped his
shares through accounts at other brokerages, mainly Rampart and discount
brokerage Charles Schwab.
"Once defendant Jeffrey Senger and other co-conspirators who
are not named in this indictment finished liquidating their Lifekeepers
stock, they would stop touting that stock and would cease offering
further payoffs to the conspiring brokers for promoting and selling
that stock to their clients. At that point, the conspiring brokers
would generally stop soliciting customers to purchase Lifekeepers
stock, and the market price for that stock would decrease substantially."
U.S. authorities claim that as a further part of the conspiracy,
Mr. Senger's greased brokers agreed that they would not get paid
by him if their brokerage clients sold their Lifekeepers shares before
he gave the go-ahead. The indictment claims the brokers never told
their clients their main motivation in touting Lifekeepers shares
was the cash bribes Mr. Senger was paying them. Although Mr. Senger
allegedly greased "numerous" dirty brokers, none of these
unindicted co-conspirators are identified.
According to the indictment, between December, 1998, and January,
1999, Mr. Senger transferred 180,000 shares of Lifekeepers to a brokerage
account in his name at Rampart, formerly known as Merit Investments.
Starting a month earlier, he also deposited 285,000 shares into an
account in his name at Charles Schwab. It is unclear when Mr. Senger
opened his account at Rampart, and whether the brokerage's compliance
staff ever wondered why a client in Florida would take such a keen
interest in a brokerage in Toronto.
While Mr. Senger had a smaller initial position at Rampart, it dominated
his selling. The indictment claims Mr. Senger dumped 208,500 Lifekeepers
shares through his Rampart account, but just 15,000 shares through
his Schwab account.
Mr. Senger did not wait long to whisk off his illicit loot. "From
in or about December, 1998, through in or about March, 1999, defendant
Jeffrey Senger wire transferred approximately $529,000 from his securities
brokerage account at Rampart Securities into a bank account under
the name C&S Capital at Republic Security Bank," states
the grand jury indictment.
Rampart is featured in no less than 19 of Mr. Senger's 27 Lifekeepers
counts, all relating to single specific transactions, including 17
of the 21 share-sale counts and the sole two money laundering counts.
These latter two charges, entitled, "financial transactions
with proceeds from specified unlawful activities," including
a $115,600 wire from Mr. Senger's account at Rampart on Jan. 20,
1999, and a similar $120,000 wire on Feb. 9, 1999, both to the C&S
Capital bank account.
Around the same time as Mr. Senger's Lifekeepers pump and dump,
he was also getting involved in Piccard and International Stores,
the two promotions which led to him being snared in Bermuda Short.
The indictment claims Mr. Senger acquired large blocks of both these
stocks between January, 1999, and August, 2000. The brokerages Mr.
Senger used in these two deals are not identified.
Mr. Senger was apparently one of the first Florida targets of Bermuda
Short. Similar to Lifekeepers, Mr. Senger allegedly began a pump-and-dump
conspiracy for his Piccard and International Stores positions in
June, 2000. Around this time, Mr. Senger had his fateful meeting
with the undercover FBI agent posing as an operative for a dirty
fund manager. That July and September, Mr. Senger allegedly paid
kickbacks of $12,500 and $10,000 to the undercover agent for small "test
trades" of these two stocks, in preparation for the supposed
$8-million financing, which never materialized.
Bermuda Short's Mr. Senger was hardly the only dubious client attracted
to, and serviced by, Rampart during this period. Rampart was also
a key conduit in two other unrelated U.S. penny stock promotions
which caught the eyes of U.S. authorities: Rajiv Vohra's
1997-98 rig job of New Directions Manufacturing, and the
early-1998 pump-and-dump rig job of Mountain Energy by a
ring including California penny stock lawyer Marc R. Tow.
Mr. Vohra is best known as the former partner of controversial West
Vancouver stock promoter Rene Hamouth in the Penway Explorers scandal,
a high-profile Canadian penny stock manipulation a decade ago which
featured Vito Rizzuto, the top Canadian mafioso who is dubbed
the John Gotti of Montreal. Both Mr. Hamouth and Mr. Vohra were acquitted
in 1993 after a criminal trial in Toronto, and there is no suggestion
that either have had any business dealings with any Mafia figures
(Mr. Hamouth denies ever having been a partner of Mr. Vohra, ever
being involved in any promotion featuring Mr. Rizzuto and ever having
heard of the Mafia figure. Mr. Vohra relocated from the Toronto suburb
of Scarborough a few years ago to the penny stock haven of Fort Lauderdale,
This January, the SEC won an $843,000 court award against Mr. Vohra,
who made illicit proceeds of $500,000 with partner Sean Healey in
the New Directions case. Ina consent settlement in April, 2001, Mr.
Healey was fined $146,000 and banned for five years.
The Mountain Energy case was much bigger. That ring made at least
$3.6-million in illicit profits trading shares through Merit, which
changed names to Rampart during the promotion, according to the SEC.
The Ontario Securities Commission is believed to have played a key
supporting role assisting the SEC in its lengthy investigation.
In consent settlements in September, 2001, Mountain Energy players George
W. Guttman and Joseph M. Blumenthal, both of Brooklyn,
N.Y., were ordered to pay disgorgement of $1.35-million. Mr. Blumenthal,
fined $350,000, also agreed to a permanent bar from participating
in future offerings of penny stocks. Mr. Guttman, fined $1-million,
agreed to a penny stock bar with liberty to reapply after five
Mr. Guttman worked as a broker at a series of U.S. firms between
1980 and 1996, when he began working as a consultant for a number
of OTC companies, which later included International Casino Cruises
Inc., Mountain Energy's predecessor. In 1999, Mr. Guttman was
permanently barred by the National Association of Securities Dealers
from association in any capacity with any member firm, for making
unauthorized transactions in a client's account. In June, 1999, he
pleaded guilty in the Southern District of New York to a felony charge
of making false statements to the SEC.
Most of the Mountain Energy group's millions of shares were funnelled
into and laundered through Rampart and Merit, in accounts of a series
of dummy companies, including Mr. Guttman's Growth International
and C. Saw Investments Ltd. Shares were also deposited in the name
of Merit itself, which held the shares on Mr. Guttman's behalf.
While these three cases have not been noted in the IDA's Rampart
prosecution so far, more client and compliance surprises may emerge
once Mr. Kasman's hearing unfolds. IDA enforcement staff expect to
introduce as exhibits 13 bankers' boxes full of documents relating
to Rampart, its compliance department and external reviews.
IDA bans, fines Kasman; one Rampart client still in jail
2002-11-19 17:40 PT - Street Wire
by Brent Mudry
Barry Kasman, the controversial former chairman and
chief executive officer of now defunct Rampart Securities, has been
effectively thrown out of the industry by the Investment Dealers
Association of Canada. In a negotiated settlement, Mr. Kasman has
agreed to a $200,000 fine and a lifetime ban on serving in any regulatory
compliance or regulatory supervision role at any brokerage in Canada,
although he is not precluded from going back to work as a broker.
The Kasman penalty tops the negotiated settlements of Rampart
former executives Nicolas Tsaconakos, fined $175,000 and
banned for life on Sept. 17, and Henry George Cole, fined $125,000
and banned for 10 years on July 23. The IDA also imposed an uncollectable
$3-million headline fine against Rampart on Jan. 25, three months
after a Rampart bankruptcy trustee was appointed by the Ontario Superior
Court of Justice.
In an eight-page settlement agreement released Tuesday, Mr.
Kasman admitted management responsibility for scores of deficiencies,
irregularities and other serious problems at Rampart dating back
to 1997, soon after it acquired his Merit Investment, another trouble-plagued
Bay Street brokerage. Under Mr. Kasman's tenure, Rampart failed IDA
reviews of sales compliance, financial compliance and regulatory
capital in 1997, 1998 and 1999, even after Rampart was notified in
1998 that its sales compliance troubles had been referred to the
enforcement division of the slow-moving IDA for formal investigation.
Meanwhile, the latest Rampart client to face his own troubles, Jeffrey
Ray Senger, arrested Aug. 14 in Operation Bermuda Short, remains
in a Florida jail after losing a bail appeal based on flight risk
and a chief magistrate's ruling of "clear and convincing evidence" he
is an "economic danger to the community." Mr. Senger's
Rampart dealings are featured in 19 of his 27 counts of masterminding
the pump-and-dump rig job of Lifekeepers International. (Mr. Senger
faces 22 counts of securities fraud, four counts of conspiracy
and four counts of money laundering in connection with two fraudulent
stock manipulation schemes.)
There is no suggestion that Mr. Kasman or anyone else at
Rampart had any idea Mr. Senger was anything but a fine upstanding
citizen and a good client of the Toronto brokerage.
Recent court filings in United States District Court for
the Southern District of Florida show Mr. Senger was under investigation
by U.S. authorities since early 1999, during the early stages of
his Lifekeepers promotion, for his activities at Baxter Banks, a
notorious boiler operation. U.S. securities regulators received more
than 200 complaints related to the flogging of Lifekeepers shares
by Mr. Senger's boiler room brokers at Baxter Banks.
Mr. Senger, based in West Palm Beach, Fla., was evidently
a fan of Canadian brokerages. "He had two accounts in Canada
that were at Rampart and Union Securities. Both of those accounts
were closed when Canada -- they are brokerage accounts, and both
of them were closed when Canada changed their law and apparently
precluded U.S. citizens from holding brokerage accounts," stated
Miami defence lawyer Samuel Rabin in a detention hearing soon after
Mr. Senger's arrest. (Canada has not changed any laws on foreign
clients of brokerages, but the practice has come under increasing
scrutiny by Canadian securities regulators in recent years.)
While Rampart collapsed a year ago, Mr. Senger continued
to fly to Toronto on business, although his recent brokerage contacts
or dealings are not identified. On Jan. 30, in a conversation taped
by Bermuda Short agents, Mr. Senger said he had just gotten back
from a business trip to Toronto. "He says that, 'Rick and I,'
Rick being his brother and him, 'had been making money faster than
we can count it,'" Assistant U.S. Attorney Rolando Garcia told
the judge. Customs records also show Mr. Senger entered the U.S.
from Toronto twice in late July, a few weeks before he was arrested
at his home in Florida.
Before his Bermuda Short arrest, the longest time Mr. Senger
spent behind bars, the only stretch noted in his bail hearing, was
a six-week stint for failing to appear on a DUI, or driving under
the influence, charge. "I did 45 days in jail for that," Mr.
Senger recently told a Miami judge.
Several Lifekeepers co-conspirators were charged in a separate
grand jury indictment last year, while Mr. Senger was a key target
of Bermuda Short FBI undercover agents. (His recent Bermuda Short
indictment rolled in the Lifekeepers charges.)
A number of these indicted Lifekeepers associates were also
fond of Canadian brokerages as stock and money laundering conduits.
In July, 1998, South American native Valentin Fernandez,
through a nominee, opened an account at controversial Vancouver brokerage
Pacific International Securities under the name Kuatro Ltd.
In February, 1999, Mr. Valentin, again using a nominee, opened an
account in the name of Dominion Investments at First Marathon
Securities in Toronto. His brother, Juan (John) Fernandez,
who controlled a branch of Baxter Banks, and four other Baxter
Banks brokers were also indicted.
(Pacific International and First Marathon are both now controlled
by National Bank Financial of Montreal. Pacific International is
currently in the early stages of a landmark hearing by the British
Columbia Securities Commission, which claims it attracted and serviced
far more than its Howe Street share of dubious clients. The BCSC
citation notes Pacific International was named in a conduit in numerous
U.S. indictments, but Mr. Fernandez and his fellow Lifekeepers riggers
were not on this list. National Bank Financial is currently fighting
an Ontario Securities Commission prosecution over the underwriting
of magnetic Russian mob promotion YBM Magnex International by First
In late 1998 and early 1999, Valentin Fernandez sold 1.3
million shares of Lifekeepers and another rig job, BIZ Holdings
Inc., through his Dominion Investments accounts, and used his
nominee to wire $2.66-million from these brokerage accounts offshore
to Barclays Bank in Nassau, Bahamas, to another Dominion Investments
account. (All Senger figures are in U.S. dollars.) Similarly, he
sold 190,000 shares of BIZ through his Kuatro account at Pacific
International in Vancouver and wired almost $354,000 from this account
offshore to a Kuatro bank account at Barclays in Nassau.
Valentin Fernandez faced eight counts for his Canadian wires
offshore. Six were for wire transfers from First Marathon in Toronto:
$250,000 on Jan. 25, 1999, $320,000 on Feb. 19, 1999, $175,000 on
Feb. 24, 1999, $145,000 on March 3, 1999, $93,000 on April 7, 1999,
and $150,000 on April 20, 1999. The other two were for wires from
Pacific International in Vancouver: $31,352 on April 7, 1999, and
$213,881 on May 7, 1999.
These Canadian wires offshore were all made while Lifekeepers
was under increasing investigation by U.S. authorities, but Mr. Senger
"For example, in February of 1999, the State of Florida
paid a visit to his Baxter, Banks & Smith office and
told him their concerns about Lifekeepers, and basically he closes
that operation, and instead of running another boiler room, he pumps
Lifekeepers stock using E-mails, press releases and a web site campaign," prosecutor
Mr. Garcia told the court.
"In June of 1999, the FBI begins its investigation.
The FBI interviews Senger's brokers there at Baxter, and that gets
back to him, and we know this because he has a meeting with the undercover
agent and the co-operating witnesses."
Lifekeepers was just one of numerous dubious deals Mr. Senger
worked on, according to U.S. authorities. (Mr. Senger retained defence
lawyer Mr. Rabin on Oct. 14, 1999, soon after the arrest of Monty
Myler, a very close friend and Lifekeepers business associate who
later flipped and copped a plea. As part of their sentence deals,
Mr. Myler and the Valentines were barred from doing any sort of telemarketing
work in the future.)
Despite knowingly being under investigation for Lifekeepers,
Mr. Senger lined up another penny stock deal, to buy the BIZ shell. "It
turned out that the owner of that shell contacted the FBI, and they
sent an undercover agent to pose as the boyfriend of the shell corporation
(owner)," states Mr. Garcia. "The undercover FBI agent
basically kind of stalls him, and essentially the FBI is able (sic)
to afford any pump of that stock."
"He continues. In June of 2000, he moved his operation
to Georgia to escape the heat, as he puts it ... there he does another
deal," Mr. Garcia told the court. In this deal, Mr. Senger sold
a $300,000 or $400,000 private placement of Design Pallets,
a shell owned by an associate.
"And while he is doing this deal, this Design Pallets deal,
he was also pumping the Piccard Medical stock, doing these
E-mails and false press releases and bribing the undercover agent
and the co-operating witnesses in the sting, and we know that the
Design Pallets deal based on recorded taped conversations that the
defendant has with the undercover agent and the co-operating witness," the
prosecutor told the judge.
In September of 2000, the National Association of Securities Dealers
shut down Mr. Senger's office in Georgia, and that same month he
brought the "eye store deal" (Piccard) to the undercover
agents and co-operating witnesses in Bermuda Short.
Then, in November of 2000, Mr. Senger got involved in a foreign
currency boiler room called Stratus. "In his recorded conversations,
he is selling foreign currency options using a Bahamian clearing
firm called Suvix ( Suvex ). Well, FBI Agent John Munet who is
in the courtroom here, made a visit to Suvix in the Bahamas, and
it wasn't a trading firm. It didn't employ traders. It wasn't in
the business of buying options. It consisted of one employee there
who was simply typing up trade confirmations," states the
STRATUS FINANCIAL GROUP, INC. - Florida
1605 B PROSPERITY FARMS RD LAKE PARK FL 33403
ADMIN DISSOLUTION FOR ANNUAL REPORT
Event Date Filed
Event Effective Date
Name & Address
BOVI, DAVID M
319 CLEMATIS ST, STE 812
W PALM BEACH FL 33401
David M. Bovi was the attorney for a Jeff Senger
for his SEC filing of HAAS NEUVEUX & CO.
A few months later, in February of 2001, Mr. Senger introduced
the undercover Bermuda Short FBI agents and the two co-operating
witnesses to other unindicted co-conspirators setting up another
stock fraud. "They eventually did do the same kickbacks as
Senger, but it was a different deal," states Mr. Garcia.
The court also heard of Mr. Senger's involvement in several other
dubious penny stock promotions, including Internet Stock Market
Resources and International Stores.
The court also heard that between November, 2001, and February,
2002, Mr. Senger generated more than $270,000 from the sale of
shares of five penny stocks through his brokerage account at SAL
Financial Services Inc.: Direct Wireless Communication Inc.,
Ivoice Inc., Knowledge Networks Inc., Micro Laboratories Inc. and
"Prior to Senger's sale of those stocks, unauthorized
spams (mass unsolicited Internet E-mails touting the stocks) were
sent. Senger was one of the largest sellers of those stocks during
that time frame. The large volume of sales caused the price of
those stocks to plummet," states one court filing. "The
SEC office in Boston, Massachusetts, and the NASD office in Washington,
D.C., have initiated investigations concerning the potential manipulation
of those stocks."
Defence lawyer Mr. Rabin argued that everything was blown
out of proportion. "The government talks about, 'Well, we
think that he is engaged in widespread fraud.' They have talked
to you today about, I guess they have mentioned five, 10 companies
in total," Mr. Rabin told the judge. "He has probably
since 1988 in the past 14 years that he has been involved, in the
14 years that he has been involved, Judge, he has probably been
involved in over 100 companies."
After several heated detention hearings, Mr. Senger remains
in jail, with his trial set for next February.
"Your Honor, our main concern, frankly, is the risk
he poses. As recently as August 6th, in an undercover video meeting
he indicates to the agent and the co-operators that he and (brother)
Rick had four deals rolling now, and they had six million shares,
and they would keep everything in family names," prosecutor
Mr. Garcia told the judge.
During this taped conversation, Mr. Senger scoffed at the
authorities. "They can still make the argument that I've been
an ongoing criminal enterprise but there's been periods when I
can show I took time off," Mr. Senger laughed.
The judge also heard evidence Mr. Senger travelled to Venezuela
in September, 2001, and spent three days on Margherita Island,
which is just off the coast. While defence lawyer Mr. Rabin described
this island as "a place like Ft. Lauderdale for spring break," Mr.
Senger may have had more in mind than some fun in the sun.
"In an August 6, 2002, tape recorded conversation
with the CWs (co-operating witnesses), Senger stated that he was
thinking of opening a room on Margherita Island and selling offshore
investments. During that conversation, Senger asked the CWs if
he could bring deals to a broker-dealer that the CWs were purportedly
going to open in Florida," states prosecutor Mr. Garcia in
a court filing.
"Senger stated that he could bring back some of his
ex-guys and they could call Europe, 'who's going to know.' Senger
said that he had people who would buy his paper on the open market."
Mr. Senger, meanwhile, is trying to claim indigent status
in court, even though he spent $45,000 on a Rolex watch at Hamilton
Jewelers on Feb. 28, talked on July 30 of plans to build a 7,400-square-foot
home, and frequently bragged on tape of his offshore prowess.
"In October, 2000, Senger introduced an individual
to the UCA (undercover agent) and CWs that could facilitate the
hiding of money in Panama. In a video recorded meeting, this person
stated that you can get a Panamanian passport in your true
name, change your name through the courts in Panama and they reapply
for a new passport in the fictitious name," states the
U.S. Attorney's office in a filing.
"Once you did that, you could do your banking in Panama
without tracing the money to you. During the meeting, Senger stated
that he had a Panamanian account with one million shares of stock
in it." Evidence also shows that during the Lifekeepers promotion
period, a corporate bank account controlled by Mr. Senger received
$100,000 from British West Indies Securities and $34,000
from BKG Co., an offshore company in the Turks and Caicos
Islands. At his detention hearing, Mr. Senger claimed to have bank
account in the Bahamas with a balance of $2,000 to $3,000 and a
brokerage account in Bermuda valued at about $150,000.
West Palm Beach—Three stockbrokers were arrested today on
federal charges due to illegal actions that resulted in investor
losses of over $12 million. Three other brokers are awaiting arrest.
The men were allegedly involved in a “pump and dump” stock
manipulation scheme and a foreign currency investment scam while
with a now defunct West Palm Beach securities firm.
The U.S. Attorney for the Southern District unsealed an 85-count
indictment today. Valentin Fernandez, 35, of Palm Beach
Gardens; Juan Fernandez, 30, of Lake Worth; and Daniel
Phillips, 28, of Stuart are in custody.
Authorities are trying to locate Emmanuel Kavekos, 28,
of West Palm Beach; Haskel Stone, 33, and Matthew Stone,
31, both of Stuart. Juan Fernandez ran two securities firms, Baxter,
Banks & Smith (BBS), in West Palm Beach, and later Stonebriar
Securities in Savannah, Georgia. The Florida Department of
Banking and Finance (DBF) permanently revoked BBS's registration
on April 28, 2000.
The defendants are being charged with various counts of conspiracy,
securities fraud, wire fraud, and money laundering. If convicted
on all counts, maximum penalties for Valentin and Juan Fernandez
could be 45 years in jail and millions of dollars in fines. Emmanuel
Kavekos could be sentenced to a maximum of 25 years in prison,
Daniel Phillips to 35 years, and Haskel and Matthew Stone each
face five years.
The indictment alleges that from December 1998 to August 2000,
the defendants participated in a scheme where they sought to artificially
inflate the stock prices of three publicly traded companies: Lifekeepers
International, Inc. (LIFR), BIZ Holdings, Inc. (BIZ), and Piccard
Medical Corp. (PICCARD). Valentin and Juan Fernandez allegedly
misrepresented the merits of the companies and induced brokers
Kavekos, Phillips, Haskel Stone and Matthew Stone to recommend
the stocks to clients.
Investigators say the Fernandezes made secret payments to the
brokers and paid undisclosed commissions up to 10 percent. The
brokers discouraged their customers from selling their stocks until
Valentin Fernandez was able to “dump” his own shares
into the market, the proceeds of which were wired to banks in the
Bahamas, according to DBF.
Defendants Valentin and Juan Fernandez are additionally charged
in a “boiler room” operation selling foreign currency
options contracts totaling $3.9 million out of International
Currency Strategies, Inc. (ICS) in West Palm Beach, and Fairfield
Currency Group, Inc. in Delray Beach.
Defendants Kavekos and Phillips worked at ICS. Investors' money
from ICS and Fairfield, collected between July 2000 and January
2001, was wired to accounts in the Bahamas. Instead of being used
to purchase foreign currency options, the money was wired back
to West Palm Beach bank accounts controlled by Valentin and/or
Juan Fernandez, according to investigators. The Fernandezes allegedly
used the money for their own benefit, including the purchase of
a 53-foot sport fishing boat.
These indictments are the result of a joint effort among DBF,
which is directed by Comptroller Robert F. Milligan, the U.S. Attorney,
Federal Bureau of Investigation, and Internal Revenue Service.
The initial alleged stock manipulation scheme was first uncovered
by a series of branch examinations conducted by DBF's Southeast
Regional Office in West Palm Beach.
Regional Director Brenda Liberti stated, “Many fraudulent
operators tend to move from one scam to the next as long as we
are chasing them with only fines and license revocations. It takes
criminal charges to shut down the more brazen fraudsters who victimize
our citizens and poison the well for the legitimate financial industry.”
Financial Examiner Jessica Vizcarra led the DBF investigative
effort. Assistant U.S. Attorney Rolando Garcia in West Palm Beach
is prosecuting the case.
CFTC Alleges that the ICS Common Enterprise, Valentin, Phillips,
and Kavekos Misrepresented Profits and Risks Associated with FOREX
Options and Misappropriated Investor Funds Through a Nationwide
The complaint against the ICS Common Enterprise in the Florida District
Court action charges the defendants with fraudulently soliciting customers
to purchase illegal forex options contracts through false claims about
the profitability and risk of forex options trading.
The complaint also names Financial Clearing Corp. as a
relief defendant. Financial Clearing Corp. is a British Virgin
Islands corporation that receives correspondence in the Bahamas
and which allegedly holds funds that are traceable to the funds
and assets fraudulently obtained from ICS Common Enterprise customers.
The CFTC's complaint estimates that total customer losses exceed
$3 million. The complaint also alleges that defendants are misappropriating
funds and using those funds for personal expenses, such as purchases
at Saks Fifth Avenue and jewelry and furniture stores.
In a related criminal action, the Office of the United States Attorney
for the Southern District of Florida issued indictments against and arrested
Fernandez, Phillips, and Kavekos as well as Juan Fernandez for criminal
violations arising out of the same activities. The CFTC coordinated its
action with the U.S. Attorney's Office and the Federal Bureau of Investigation.
ACCESSION NUMBER: 0001066812-00-000019 DATE: 20000309
HAAS NEUVEUX & CO CENTRAL INDEX KEY: 0000799070
IRS NUMBER: 841032191
SEC FILE NUMBER: 005-56597
1999 BROADWAY STREET, SUITE 3250
DENVER, CO 80202
ITEM 1. SECURITY AND ISSUER This statement relates to the common
stock, $.0001 Par Value ("Common Stock") of HAAS NEUVEUX & COMPANY
(the "Issuer"). The principal executive offices of the
Issuer are presently subject to ongoing litigation proceedings
which have not been resolved as of the date of filing of this Statement.
ITEM 2. IDENTITY AND BACKGROUND This statement is filed by Jeff
Senger, an individual. Mr. Senger's principal occupation is that
of (i) an officer and director of Mymedic.com, Inc., a privately
held Internet heath care portal, and (ii) a self employed securities
Mr. Senger's business address is 2300 Palm Beach Lakes Blvd.,
Suite 210, West Palm Beach, FL 33409. Mr. Senger's resident address
is 13889 82nd Lane North, West Palm Beach, Florida 33412.
During the last five (5) years, Mr. Senger has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors). During the last five (5) years, Mr. Senger has not
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which such person
was or is subject to a judgement, decree or final order enjoining
final violations of, or prohibiting or mandating activities subject
to federal or state securities laws or finding any violation with
respect to such laws. Mr. Senger is a U.S. citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION On May
21, 1999, William Richard Smith, an affiliate shareholder of the
Issuer, issued a promissory note to the order of Jeff Senger in
the principal sum of Sixty Three Thousand Dollars. The principal
sum, together with accrued unpaid interest, bears simple interest
at the rate of Six Percent (6%) per annum and was due on February
In order to induce Mr. Senger to accept the promissory note and
as security for the payment by Mr. Smith of the Note, Mr. Smith
agreed to pledge with Mr. Senger all 78,996,000 shares of the Issuer's
Common Stock Mr. Smith owned. Pursuant to the terms of the promissory
note, Five days prior to the promissory note's due date, Mr. Senger
was given the option to convert the promissory note into the right
to retain these shares as full payment of the promissory note and
retain all rights of ownership with respect to such shares.
On February 23, 2000, Mr. Senger exercised his option to convert
the promissory note into the right to retain the 78,996,000 shares
as full payment of the promissory note and retain all rights of
ownership with respect to such shares. The Common Stock of the
Issuer was previously acquired by Mr. Smith as a result of the
acquisition by the Issuer of all of the outstanding stock of Productos
Forestales de Bolivar, CA, a Venezuelan corporation ("PFB")
of which Mr. Smith was the sole shareholder, officer and director.
All of Mr. Smith's shares in PFB were exchanged for 78,996,000
shares of the Issuer's Common Stock.
Ongoing litigation proceedings which have not been resolved as
of the date of filing of this Statement are presently ensuing with
respect to Mr. Smith's transaction with the Issuer concerning PFB.
Mr. Senger is in settlement discussions with adverse parties in
connection with this litigation and his ownership of the Issuer's
Common Stock, but no agreement has yet been reached between the
parties. The litigation proceeding, and possible settlement, may
or may not have an effect on Mr. Senger's Common Stock.
Smith's Venezuela ID #E82196664 and William Richard Smith Fla
February 23, 2000 VIA REGISTERED/CERTIFIED MAIL -----------------------------
William Richard Smith
Calle Circunvalacion Del Sol Edificio Tarabay Piso 1-1N
cc: AST (via certified mail) David Bovi, Esq. Tom Howard, Esq.
Roger Tomkins John Treddenick, Esq.
David M. Bovi, Esquire P.A.
319 Clematis Street, Suite 812
West Palm Beach, Florida 33401
Haas Neuveux & Company (HANX)
Jeff Ray Senger