Here is some interesting reading:
HOWARD HABER v. DON R. LOGAN; CARL J. CONTE; BARRIE LOGAN a.k.a. BARRIE
TIDWELL; DAVID LAMBERTSON; THOMAS JOLITZ; GENESIS MEDIA GROUP, INC. (GNNX); a New Jersey Corporation; BADCO, INC., a California Corporation; VISIONQUEST, a California Corporation; TRANSTAR COMMUNICATIONS, INC., a Nevada Corporation; CHANNEL PLUS, a California Corporation; QUADRILLION, a California Corporation; and DOES 1 thru 10., Civil Action No. 99-CV-08435 ER (RMCx)
The Lawsuit sets forth legal claims against one or more of the named Defendants for:
(1) FRAUDULENT MISREPRESENTATION;
(2) VIOLATION OF FEDERAL CIVIL R.I.C.O., 18 U.S.C õ 1961, ET. SEQ.;
(3) VIOLATION OF SEC RULE 10b-5, õ10(b) of Exchange Act.;
(4) VIOLATION OF 15 U.S.C. õõ 77(2), 77q(a).;
(5) VIOLATION OF 15 U.S.C. õõ78m(a), 78r;
(6) VIOLATION 15 U.S.C. õõ 78j(b), 78aa.
A summary statement of the Lawsuit, as directly quoted from the filed complaint is:
1. The LOGAN GROUP, which includes but is not limited to Defendants DON R. LOGAN, CARL J. CONTE, BARI LOGAN, and TOM JOLITZ, has, since mid-1997, engaged in a continuous pattern of criminal and fraudulent conduct that violates applicable federal and state laws, including laws governing publicly-traded securities, corporations, theft of properties, and use of the wires and mails. This Complaint highlights the most documented and egregious of the LOGAN GROUP's conduct and reveals the concert of activities and agreements by which each and all of the members of the LOGAN GROUP conspired to illegally obtain millions of dollars from investors, contract vendors and the public at large.
2. In mid-1997, the LOGAN GROUP entered into a series of merger and acquisition transactions in which the LOGAN GROUP obtained the substantial majority of shares in a publically-traded New Jersey corporation named "Genesis Media Group, Inc." ("GNNX") and, along with others, the controlling group of officers, directors and agents (the "CONTROL GROUP"). Almost immediately, the LOGAN GROUP began to implement its scheme of criminal and fraudulent conduct.
3. First, the LOGAN GROUP entered into a putative contract with World of Entertainment in which an adult film library allegedly owned by GNNX's predecessors was licensed or sold for millions of dollars. The LOGAN GROUP (or its successor the CONTROL GROUP) used the World of Entertainment contract to inflate the assets reported on GNNX's financial records by claiming the proceeds from the contract as an accounts receivable; in fact, the LOGAN GROUP has never transferred to World of Entertainment any of the adult film library tapes and has been in material breach of the contract. This did not stop the LOGAN GROUP and/or the CONTROL GROUP from publishing the phony GNNX financial records. Thus, investors and the public at large were misled that GNNX was making sales and profits.
4. At about the same time, the LOGAN GROUP, through GNNX, apparently purchased or otherwise acquired a vast "music library" which contained several thousand popular songs performed by famous artists such as Little Richard, Johnny Cash, Frank Sinatra, Willie Nelson and many others. The amount of monies paid by the LOGAN GROUP for this acquisition was no more than $40,000.00. However, by the time the "music library" assets reached the books of GNNX, the value of the "music library" had increased almost one thousand times to $40 million. These inflated figures were reported on GNNX financial records and other publications. Incredibly, at no time did GNNX even have the valid legal rights to exploit the songs of the "music library"; in other words, the so-called rights that GNNX owned were worthless! Thus, investors and the public at large were misled that GNNX actually owned tens of millions of dollars worth of property.
5. From mid-1997 through the present, the LOGAN GROUP, through GNNX, has announced a litany of transactions and events, most of which were either never completed or contained misleading terms. For example, in mid-1997, the LOGAN GROUP (or its successor the CONTROL GROUP) announced that GNNX had entered into several enormous telecommunications marketing agreements which would yield over $150 million in sales. The LOGAN GROUP failed to disclose that these contracts contained hidden costs which would have made performance unprofitable. Of course, it didn't matter because GNNX never performed on any of the telecommunications agreements. The public announcements were never retracted. Thus, investors and the public at large were and are misled that GNNX was and is a significant player in the telecommunications industry.
6. In another example, the LOGAN GROUP (or its successor the CONTROL GROUP), in late 1997, announced the participation of GNNX in the "James Dean Diaries" project, suggesting millions of dollars in potential profits. Again GNNX did not perform on its obligations and as of the date of this Complaint, there has not been one dollar in profits from these efforts. The failure of the "James Dean" project has not been disclosed or the public announcements retracted. Thus, investors and the public at large were and are misled that GNNX was and is a serious producer of entertainment products.
7. Even if most ventures can be seen as speculative in nature, the GNNX business failures were sometimes the direct result of the criminal and fraudulent conduct of the LOGAN GROUP. In mid-1998, the LOGAN GROUP (or its successor the CONTROL GROUP) announced the acquisition of the assets of a nutritional supplements company named GEN. As part of the GEN transaction, the LOGAN GROUP, through GNNX, was supposed to use an investor's funds to pay the outstanding accounts payable of GEN. Instead, the LOGAN GROUP, through GNNX, diverted the initial $50,000.00 of investor funds to GNNX and did not pay off any of the GEN debts. Of course, the GEN acquisition failed. The investors and public at large are unaware of these facts because no public retraction or clarification has been made and, thus, the investors and public at large were and are misled that GNNX was and is engaged in the profitable marketing and distribution of nutritional supplements.
8. The illegal schemes and activities of the LOGAN GROUP are clearly illustrated by a transaction negotiated and implemented with Octavia. In late-1998, the LOGAN GROUP (or its successor the CONTROL GROUP) entered into an agreement in which Octavia, a company from Michigan, would render audio recording services to GNNX. The LOGAN GROUP (or its successor the CONTROL GROUP) induced Octavia to move its studio from Michigan to the GNNX offices with offers of shares of GNNX stock and budgets to pay for continuous recording projects. Once the Octavia equipment was in the GNNX offices, the LOGAN GROUP (or its successor the CONTROL GROUP) negotiated to have this equipment financed under GNNX's existing leasing agreements and the LOGAN GROUP (or its successor the CONTROL GROUP), through GNNX, kept the proceeds from the lease. As it turns out, and as the LOGAN GROUP (or its successor the CONTROL GROUP) knew, the Octavia studio equipment had previously been leased to a Michigan bank. Thus, the LOGAN GROUP (or its successor the CONTROL GROUP) had stolen the Octavia equipment, fraudulently procured a loan against the stolen equipment, and misled investors and the public at large about the Octavia transaction.
9. The trail of broken business ventures has been continuous since the LOGAN GROUP took over. A radio show venture with M4 Entertainment failed. A joint marketing agreement with Coast Paradise Entertainment failed. Letters of intent to acquire rights to exploit Judy Garland recordings, Bruce Springsteen recordings and other popular audio recordings all failed. A transaction to acquire a national audio recording distribution company named V&R Distribution failed. In almost every case, the LOGAN GROUP (or its successor the CONTROL GROUP) engaged in dishonest conduct which led to the failure of these ventures while at the same time publishing "rosy" announcements for the investor public which have never been retracted or accurately clarified. When it all said and done, despite all of the announcements by the LOGAN GROUP (or the CONTROL GROUP), GNNX has made virtually no sales, and certainly no real profits for since the LOGAN GROUP took over.
10. At least one of the motives of the LOGAN GROUP (or its successor the CONTROL GROUP) to implement and continue the schemes of criminal and fraudulent conduct are clear: using GNNX as a "personal piggy bank" for living expenses as well as illegally obtaining vast monies from the sale of shares of stock. For example, CARL J. CONTE, a member of the LOGAN GROUP who acted as officer and director of GNNX used his 100,000 shares of GNNX stock to secure a "personal loan" from GNNX of $20,000 which CARL J. CONTE used to purchase a vehicle in his own name; not only did CARL J. CONTE not repay the "personal loan", he eventually sold the very same shares of stock which were to operate as collateral. DON R. LOGAN and other members of the LOGAN GROUP and/or the CONTROL GROUP have similarly used shares of GNNX stock to secure personal possessions and maintain an opulent life style. TOM JOLITZ, a convicted felon who participated in developing many of the phony GNNX transactions, earned tens of thousands of dollars in compensation and "commissions". Meanwhile, GNNX failed to generate any sales, perform on its purported business agreements or meet its payroll.
11. The illegal schemes of the LOGAN GROUP (or its successor the CONTROL GROUP) have extended beyond one publicly-traded corporation. In the summer of 1998, the LOGAN GROUP (or its successor the CONTROL GROUP) engineered a merger and acquisition transaction with a Nevada publicly-traded corporation and created "Transtar Communications, Inc." ("TNNS"), and became the controlling shareholders, officers and directors of TNNS. Once again, the LOGAN GROUP (or its successor the CONTROL GROUP) acted to inflate the value of the assets of a publicly-traded company. In the summer of 1998, the LOGAN GROUP, through TNNS, putatively purchased or otherwise acquired a vast "film library" which allegedly contained several hundred popular films. The amount of monies paid by the LOGAN GROUP for this acquisition was no more than $100,000.00. However, by the time the "film library" assets reached the books of TNNS, the value of the "film library" had increased more than sixty times to $6 million. Consistent with the prior pattern, these inflated figures were reported on TNNS financial records and other publications; once again, the LOGAN GROUP had not really acquired valid rights and so the "film library" holdings of TNNS are worthless. Thus, investors and the public at large were misled that TNNS actually owned millions of dollars of property.
12. The LOGAN GROUP's control of TNNS permitted the LOGAN GROUP to divert funds, business opportunities and potential profits from stock manipulation into a second "piggy bank" in which the LOGAN GROUP had an even greater percentage of equity. For example, the LOGAN GROUP (or its successor the CONTROL GROUP) arranged for GNNX to loan in excess of $300,000.00 to TNNS; in other words, the same officers and directors voted to lend money from one public company they controlled to another public company in which they had a greater percentage interest. Also, the LOGAN GROUP (or its successor the CONTROL GROUP) split the telecommunications transactions so that TNNS would get a significant percentage of the potential revenues (or phony revenues) on the TNNS financial projections. Finally, the LOGAN GROUP (or its successor the CONTROL GROUP) caused GNNX to pay virtually all of the overhead for TNNS, including rents and leases, and caused GNNX personnel to staff the operations of TNNS. Meanwhile, the LOGAN GROUP failed to disclose to the investors and public at large the common ownership, common control and conflict of interest that the LOGAN GROUP had in both TNNS and GNNX.
For further information on the Lawsuit, please contact:
gnnxclass@aol.com |
