Re: 12/2/99 - Stock fraud victim speaks
December 2, 1999
Stock fraud victim speaks
Published in the Asbury Park Press 12/02/99
By JASON METHOD
STAFF WRITER
Desperate for money to pay for his 8-year-old son's medical treatments, unemployed plumber Galen O'Kane turned to the Internet, looking for cheap stocks to make a quick profit.
O'Kane believed he found his financial rescue at a Web site called Futuresuperstock.com that touted hot new companies. Unbeknownst to O'Kane, who invested $23,000 in one company, the site was a camouflage for stock promoter Maier S. Lehmann's scheme to dupe small investors like him out of more than $12 million.
Lehmann and his business partner, Albert Alain Chalem, were found shot to death execution-style in Chalem's Colts Neck mansion Oct. 26. Authorities have made no arrests, but "we believe we are closer today than we were a month ago," First Assistant Monmouth County Prosecutor Alton D. Kenney said yesterday.
Meanwhile, a federal judge yesterday ordered six European companies and an attorney from Spain to surrender $10 million in penalties and ill-gotten profits resulting from shady dealings involving Electro-Optical Systems Corp, which Lehmann was promoting on his Web site.
Federal District Court Judge Denise L. Cote ruled the companies and lawyer in default after they failed to respond to fraud charges brought by the federal Securities and Exchange Commission. None of those defendants could be reached for comment.
O'Kane, now a yacht builder living in Ellsworth, Maine, bought Electro-Optical shares in January 1998. The Massachusetts company tried to develop a fingerprint security device for computer users.
O'Kane, who spoke about his experience with the Lehman Web site yesterday for the first time, said he sought fast stock profits to pay mounting medical bills after his son was diagnosed with a form of multiple sclerosis.
"When we were staying home to take (my son) to the doctors, that's when I was on the Internet and we found the stock," O'Kane said in an interview yesterday. "You take your chances with these, I know. But I thought they had an in on this. It looked professional and glitzy. It caught my eye."
Lehmann received 150,000 shares of Electro-Optical Systems from three of the companies involved in the decision announced yesterday. SEC attorney Larry P. Ellsworth said those three firms were only paper companies used to move stock shares to insiders.
Lehmann sold his shares at a windfall profit. He was charged in the case and settled after agreeing to pay $630,000 in restitution and fines this January.
The shares were transferred to Lehmann through Tinton Falls brokerage Donald & Co. by trader Cosimo Tacopino. Donald & Co. was dismissed from the case after paying $233,000, surrendering all profits and commissions on Electro-Optical stock without admitting wrongdoing. Tacopino declined to comment yesterday.
Ellsworth said that all money collected from defendants in the case would eventually be returned to investors when the case is over.
Although investigators say they are looking closely at the victims' thick web of shady business dealings, Kenney said police are still trying to establish the motive for the killings.
Even though Lehmann had divorced himself from the Electro-Optical case, he remained in contact with one former associate.
Allen Lloyd Conkling, former Electro-Optical investor relations representative, was one of two friends who found Chalem and Lehmann dead in the dining room. Conkling, owner of a Fort Lee tanning salon, has not responded to numerous requests for comment. He was not a defendant in the Electro-Optical case.
Conkling is also listed as investor relations representative for Aviation Industries, another company touted on the Futuresuperstock.com Internet site. Aviation Industries was once headed by Joseph T. Logan Jr., who visited Chalem and Lehmann at the Colts Neck house on the day they died, according to a source familiar with the case.
Logan, through his attorney, Jerome Selvers of Freehold, has declined to comment about the case. Selvers has said Logan had no formal business relationship with Lehmann or Chalem, but knew them as acquaintances.
Far removed from this web of business dealings is O'Kane, 39, who said he could not keep his plumbers job because he had to frequently take off of work to take his son to the hospital.
"I didn't have a job. I needed money. I needed a chance to make a quick buck," O'Kane said. "I was surfing the web and came across that newsletter, Futuresuperstock, and I followed them for a while. They had this great stock they kept promoting. I thought, here is a technology that, if it's true, I'll make a lot of money. So I got into it."
O'Kane, who has testified before the U.S. Senate about his ordeal, said he bought shares in the company at $5 each, which are now virtually worthless.
O'Kane added that his prospects are better now.
"Fortunately, I have a job that is good and they're understanding," O'Kane said. "I'm able to take some time off for my son, and it has helped me build up my assets again."
Published on December 2, 1999
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