Is it just me, or has anyone else noted that the dubious players that surround the more questionable investments just cannot perform even simple math???
Also, looks like them thare warehouses that has barrels and barrels of gold dust stored in 'em ain't just safe no more...
From The Las Vegas Sun...
lasvegassun.com
November 30, 1999
Wall Street financial executives scratch heads over Las Vegas company's planned stock sale
By Gary Thompson <gary@lasvegassun.com> LAS VEGAS SUN
The purported financial savior of Las Vegas Entertainment Network Inc. isn't letting an investigation of LVEN stock trading -- suspended since Oct. 18 -- derail his plans to sell stock in another suspect company.
Fred Cruz has filed a registration statement with the Securities & Exchange Commission saying his Countryland Wellness Resorts Inc. of Las Vegas is selling 10 million shares at an anticipated price of $18 to $23 a share. After expenses, the SEC filing said, Countryland expects to net at least $160 million.
But the prospectus names as underwriters some of the top investment bankers on Wall Street -- and they don't know anything about the proposed offering.
"Who?" responded Leslie Thompson, a spokesperson for Donald, Lufkin & Jenrette, when asked Monday if she was aware of the Countryland filing. "We've never heard of them."
DLJ, Morgan Stanley Dean Witter, and Salomon Smith Barney are listed as co-underwriters of Countryland's initial public offering, according to the SEC filing. But they all told Barron's financial weekly they don't know anything about the Countryland claim.
Cruz is a former podiatrist who lost his California medical license in 1965 following his conviction on conspiracy and grand theft charges.
He petitioned the California Board of Podiatric Medicine for license reinstatement in 1996, but the board denied his motion. It cited subsequent criminal convictions in Nevada and Wyoming and said Cruz had "made a number of false or misleading statements to the board."
Countryland's Nov. 19 SEC filing said Cruz "no longer has a license to practice medicine or podiatry as he is retired."
The new Countryland filing contains additional extraordinary statements. For example:
Countryland plans to use offering proceeds to develop its "life extension program" that, "by using our genetic engineering," can repair defective genes and let clients "live to 120 years."
"Any death before that should be considered a premature death," the filing said.
The company plans to sell memberships for 10-year packages including annual one-week treatments at selected Las Vegas resorts. The cost is $30,000, meaning Countryland "will receive revenues of $3.12 billion" and net profit of $2.44 billion, the filing said.
Countryland "is entering into a contract with two major hotels in Las Vegas." The filing asserted that "Wellness Resorts and Life Extension Program at the Ballys (sic) and Paris Hotel and Casino Las Vegas, Nevada, is a wholly owned subsidiary of Countryland Wellness Resorts Inc."
Bally's and Paris are owned by Park Place Entertainment Inc., whose spokesman said Monday there are no such agreements with Countryland.
Countryland has a joint-venture agreement with Striker Gold Mines Ltd. "to invest six bank guarantees from Bank BNI Indonesia ... that will regenerate (sic) 9 percent per day and the company will receive 50 percent of the profit. The program is ready to start in about 30 days."
That 9 percent daily interest rate is more than 520 times the current daily rate paid on U.S. Treasury notes and would yield some truly amazing profits. For example, one dollar invested at 9 percent compound interest a day would grow to $45,779,574,134,957 -- or about $45.8 trillion -- in just one year, according to Bill Anthony, a financial consultant with Wells Fargo Bank.
Previous Countryland filings said the Indonesian bank guarantees are for $100 million each, so the taxes alone on Countryland's investment program would easily wipe out the accumulated debt of every nation on earth in just a year.
After the 10 million-share offering, Countryland will have 100.8 million shares outstanding -- 90 percent of them owned by Cruz and his associates. Countryland's "stock incentive plan" will authorize issuance of another 28.8 million shares to "our officers, employees, directors, consultants and advisors," the filing said.
But there's no immediate danger Cruz and his aides will sell their holdings, since "our executive officers, directors and other security holders have entered into lock-up agreements with the underwriters."
"Without the prior written consent of Morgan Stanley & Co. Inc., none of us will, during the period ending 180 days after the date of this prospectus," sell and stock or options.
Again, Morgan Stanley told Barron's the investment banking firm has no deals pending with Countryland, let alone an executed lock-up agreement.
Countryland has assets of $2.6 billion. According to the filing, they include $400 million of bank guarantees from BNI Bank and $2.2 billion of "gold and silver reserves" from California mining claims the company won't begin working until metals prices rise.
In an SEC filing it made just a month and a half ago, Countryland claimed it had assets of $2.4 billion. That filing valued the gold and silver reserves at $1.3 billion and said the company had "cash and equivalents" of $1.1 billion.
The "cash and equivalents" consisted of 11 $100 million bank guarantees from an Indonesian bank, the filing said, and "$22.3 million" of gold stored in a California warehouse.
"With respect to gold in storage" in California, the latest filing said, "the company has determined that the warehouse went out of business about three or four years ago and said gold deposit has been declared a casualty loss.
"In the opinion of the company counsel, the gold has been lost or stolen, and in any event is missing."
That isn't the only matter under investigation. According to the accountant who audited Countryland's earlier filings, the SEC has been looking into Cruz' filings for months.
And SEC and NASDAQ investigators are probing the purported $495 million "investment" Cruz made in LVEN, whose stock trading was halted after a rapid price run-up fueled at least in part by the news of his largess. Part of his investment called for Cruz to pay more than $101 a share for LVEN stock when it was publicly trading for a little over $1 a share.
The investigators have asked LVEN for information about the company, but LVEN officials have refused to respond to repeated requests for comment by reporters. It isn't known whether they've responded to the investigators questions, though LVEN stock trading is still halted.
KJC |
