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EXTRA! EXTRA! (Today's Feature Headlines)
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stockgroup.com
Police raid homes and offices of Starnet executives
By Adam Peeler
Stocks plunged for Starnet Communications International Inc. (OTCBB: SNMM),
after the Vancouver-based pornography and gaming software provider was
raided this morning by national and local police forces over allegations of
illegal pornography distribution and possesion of the proceeds of crime.
Shares managed a humble comeback by the end of the day, climbing to $4.06
on volume of 10.5 million. At 2:30 p.m. ET, Starnet's stock was trading at
$3.15 on volume of 6.5 million shares, down $10 from yesterday.
The investigation, said to be ongoing for 18 months, culminated in a raid
of the premises at 5:30 a.m. PDT and is expected to carry on throughout the
weekend, said RCMP officer Frank Henley.
“We're going to need a few days at least to find out what we need,” said
Henley, who just left Starnet's second-floor downtown office, now shut down
by police. “I can't comment about allegations of kiddy porn possession, all
I can tell you is the offense falls under the section of possession and
distribution of illegal pornographic material.”
In addition to the premises, police raided the residences of six of the
company's directors and officers.
Mark Dohlen, chief executive officer of Starnet, stated in a midday press
release, ''We are dismayed by this disruption of our three year-old
operations, have retained legal counsel and will vigorously defend our
rights.''
Starnet's lawyer Meldon Ellis wasn't available for comment.
Starnet is also under investigation for illegal betting and bookmaking.
Investigators have determined millions of dollars flowed through
Starnet-controlled bank accounts each month as a result of its
Internet-based gaming system.
No company officials were available for comment in Vancouver and employees
in the West Indies office referred phone calls back to Vancouver.
A police officer at the scene told Stockgroup.com, “This is a major
investigation involving more than 100 officers.”
Included in that description are representatives from RCMP High–Tech Crimes
Unit from Ottawa and the RCMP Integrated Proceeds of Crime section.
Starnet recently shifted from Internet pornography to online gambling.
In the last week, Starnet announced it had signed agreements with three
other licensees for its Internet gaming software, Softec Systems, including
one involving well-known comedian Rodney Dangerfield.
Other recent problems include licensee Las Vegas Casino Inc. On August 5,
the casino operator said it was filing a $1 billion lawsuit for breaching a
license agreement. Cited problems include software problems such as massive
over-billing of credit card accounts.
Starnet is currently listed on the National Association of Security Dealers
(NASD) Over-The-Counter Bulletin Board and commenced trading in September
of 1997 under the symbol "SNMM". The company is also listed on the Berlin
Stock Exchange (BERLIN) and is publicly traded on the Over-The-Counter
market under the symbol "SNM".
Starnet's strategic partner in the licensing is Net-Force Entertainment
Inc., a wholly-owned subsidiary of Net-Force Systems Inc., and based in
Antigua, West Indies.
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