On September 1, 2000 the Company secured a $150,000 loan from Jeffrey
Jolcover, an employee of Preference Technologies, Inc. for working capital
purposes. The Note carries no security arrangements, escrow arrangements,
registration rights nor UCC agreements. The loan is due on September 11,
2000 and has an interest rate of 12% per annum, 75,000 common stock
warrants, with a strike price of $1.10 and a five year expiration on the
due date. Should the Note not be paid promptly, the Note holders at their
option can convert the payment to shares of common stock at a conversion
price of $.10 per share. The Note was extended to October 11, 2000 and is
not yet paid.
Friday, March 20, 1998
Huge fraud brings plea, cooperation
An accountant involved in a wireless cable investment scam pleads guilty in Las Vegas.
By Carri Geer
Review-Journal
A certified public accountant pleaded guilty Thursday to conspiracy and money laundering charges for his role in defrauding investors nationwide of an estimated $35 million.
Federal prosecutors filed the charges against Jeffrey Jolcover under seal Thursday morning after reaching a plea agreement with him. The charges stem from the sale of interests in wireless cable ventures.
Jolcover's attorney, Joseph Cronin of Minden, briefly commented on the case after his client's court hearing.
"This has been a long process of approximately two years cooperating with the government, and we're both relieved that we've reached this stage and we're looking forward to the final resolution of this matter in June," the attorney said.
U.S. District Judge Howard McKibben is scheduled to sentence Jolcover on June 15.
Jolcover, a 43-year-old Las Vegas resident, pleaded guilty to one count of conspiracy to commit securities fraud, mail fraud and wire fraud; and one count of money laundering.
Although federal officials declined to make any formal statements regarding Jolcover's plea agreement, a source close to the case said the investigation is continuing and others may face charges.
According to Jolcover's written plea memorandum, also filed Thursday, "The defendant agrees to provide complete and truthful information and testimony concerning his knowledge of all other persons who are committing or have committed offenses against the United States, and agrees to cooperate fully with the government in the investigation and prosecution of such persons."
Jolcover faces an estimated prison sentence of 57 to 71 months, according to the document. Prosecutors told McKibben they would recommend a term of five years or less if they decide Jolcover has given them "substantial assistance."
The plea memorandum claims that, had the case gone to trial, prosecutors could have established that:
--Jolcover joined with a Las Vegas businessman and a Las Vegas attorney to offer investments in wireless cable ventures "in a manner calculated to deceive the investors."
--The sale of interests in those ventures raised about $35 million from investors throughout the United States.
--Between about January 1991 and mid-1995, Jolcover and others caused the creation of corporations to effectuate the sale of the investment interests, opened bank accounts to receive investor funds, and caused the creation and distribution of promotional literature "calculated to deceive investors."
--Jolcover and others, through the various corporations they controlled, caused the solicitation of investors through high-pressure telephone sales. They also conspired to misrepresent the true nature of the wireless cable investment opportunity being sold and the actual use of investor funds.
"The operations of defendant Jolcover and other conspirators were centered in Las Vegas, Nevada," the plea memorandum states. "The promotional literature was printed in Las Vegas and was shipped from Las Vegas via Washington, D.C., to investors throughout the nation. A portion of the investors' funds were eventually wired to bank accounts in Las Vegas, Nevada, over which the conspirators exercised control."
According to the document, the money laundering charge stems from an October 1994 incident in which Jolcover caused $275,000 -- money illegally raised from investors -- to be deposited into a brokerage account in Reno.
"A substantial portion of these funds were then transferred to and deposited into an offshore bank account, said transaction being designed to conceal the ownership of the transferred funds," the document states.
Jolcover worked as an accountant for the state Gaming Control Board from 1977 to about 1979 and later operated his own accounting practice in Nevada.
David Dantzler, an Atlanta attorney representing a court-appointed receiver involved in recovering investor funds, said he doubts any of the investors will recoup their losses.
Dantzler said the receiver, along with his attorneys and financial consultants, conducted an 18-month investigation as part of a Securities and Exchange Commission enforcement action against Jolcover and others involved in the sale and promotion of the investments.
"Within a matter of weeks, or certainly months, we concluded that these offerings were fundamentally fraudulent," he said.
Dantzler said the evidence gathered during that investigation formed the basis of the charges against Jolcover. He said none of the victims, which included some Nevada investors, received any return on their investments.
Saturday, March 21, 1998
Suspect in fraud case found dead
Police think a Las Vegas man with seven children killed himself before offering a plea in U.S. District Court.
By Carri Geer
Review-Journal
A Las Vegas investment promoter was found dead in a hotel room Thursday, the same day he was scheduled to enter pleas in a federal fraud case.
"They do believe it to be a suicide," North Las Vegas police Lt. Chris Larotonda said Friday.
James Greenbaum, 46, was scheduled to appear Thursday morning with Las Vegas accountant <b.Jeffrey Jolcover, 43, in U.S. District Court.
Greenbaum failed to show up, but Jolcover pleaded guilty to conspiracy and money laundering charges for his role in defrauding investors across the country out of an estimated $35 million.
The charges stem from the sale of interests in wireless cable TV ventures.
Jolcover faces an estimated prison sentence of 57 to 71 months.
Larotonda said Greenbaum's body showed no outward signs of trauma when it was found at the Fiesta in North Las Vegas. An autopsy was scheduled, but police were anticipating the need for toxicological tests to determine the cause of death.
Greenbaum's attorney, Daniel Albregts, declined to comment on his client's death or the criminal case. Greenbaum was married and had seven children.
According to court records, Greenbaum was involved for many years in businesses that offered and sold investments, including commodities and securities, to the public. He also had been the subject of various federal and state regulatory investigations.
Greenbaum's name appears prominently in the June 1997 report of a court-appointed receiver in a civil enforcement action filed by the Securities and Exchange Commission.
William Hays Jr. was appointed receiver in March 1995, when the SEC filed the action in Atlanta against Jolcover and others involved in the sale and promotion of investments in wireless cable TV systems.
The lawsuit sought to recover investments and impose civil penalties.
David Dantzler, an Atlanta attorney representing the receiver, said Hays conducted an 18-month investigation with his financial consultants and attorneys.
"Within a matter of weeks, or certainly months, we concluded that these offerings were fundamentally fraudulent," the attorney said.
Dantzler said the investigation involved more than 10,000 hours of work. He said those participating in the probe subpoenaed records from about 160 bank accounts, traced about $150 million in financial transactions and took about 22 depositions.
"As a result of that work, we believe that the receiver's report accurately describes the circumstances surrounding these offerings, the roles of the various participants and the various uses of the investment proceeds," Dantzler said.
He said evidence gathered during the receiver's investigation formed the basis of the criminal charges against Jolcover.
The receiver's 76-page report also implicates former Las Vegas attorney Mark Dzarnoski and John "Jack" A. Field III, a former U.S. attorney in West Virginia. No charges have been filed against either man.
According to the report, Greenbaum formed American Microtel Inc. in October 1990. The company sold "application preparation services" to the public that were related to the license lotteries conducted by the Federal Communications Commission in the early 1990s.
The report claims Field and Dzarnoski acted as attorneys for American Microtel.
"Jim Greenbaum and Microtel were the subject of various state and federal regulatory investigations and proceedings related to Microtel's sales activities," the document states. "It appears that Microtel was able to raise approximately $17 million in investment from the public."
According to the report, the Federal Trade Commission filed a lawsuit against Greenbaum, American Microtel and others around 1992, alleging that the defendants had engaged in fraud and deceptive trade practices in the sale of the company's application services.
"The lawsuit was ultimately settled by the entry of an order by the United States District Court for the District of Nevada that was intended to limit Jim Greenbaum's ability to participate, directly or indirectly, in the sale of investment opportunities to the public," the report states.
According to the report, Greenbaum, Jolcover and Field also were involved in activities before August 1992 related to the acquisition of FCC broadcast license rights in Texas.
In conjunction with these activities, according to the document, Midas Media was incorporated around March 1992 "for the purpose of holding these lease rights and other assets."
The report describes Jolcover as the person primarily responsible for the activities of Midas.
According to the report, Jolcover, Greenbaum, Field and others developed a structure for the ownership of the wireless cable TV systems in Texas.
The document also claims they developed a structure and scheme to use these systems as a vehicle for raising money by soliciting investments from the public.
"This structure and scheme, designed to avoid the securities laws of the United States and the various states, made use of corporate shells, limited liability companies, limited partnerships and joint ventures," the report states. "Moreover, because of the terms of the settlement in the `FTC v. Microtel' litigation, the organization was structured so that Jim Greenbaum would not appear to be involved in these activities, even though his involvement was integral."
According to the charging document in Jolcover's criminal case, Jolcover and other unidentified people used a number of "complex telemarketing schemes designed to defraud the investing public" between October 1990 and mid-1995.
The document claims they targeted investors throughout the United States, enticing them to invest between about $35 million and $50 million by making false statements and omitting facts.
According to the document, most of the funds raised from defrauded investors were obtained through the sale of interests in wireless cable TV systems in Texas, Nebraska, Alabama and Wisconsin.
Dantzler said none of the victims, which include some Nevada investors, have received any return on their investments. The attorney also said he doubts any of the victims will recoup their losses.
Hays reached a similar conclusion in his report, which states, "The unfortunate reality is that while the receiver has been able to trace the investment proceeds and determine what happened here, very little money remains."
Man sentenced for
wireless cable scam
A man who played a role in defrauding the public out of millions of dollars in a wireless cable television scheme was sentenced Friday to 37 months in federal prison.
Jeffrey Jolcover, 45, also has paid $2.35 million to the Federal Trade Commission to satisfy a civil judgment in the case. The money will be used to reimburse victims who invested as much as $35 million in the scam.
Kathryn Landreth, U.S. Attorney for the District of Nevada, said Jolcover and a group of other men took part in the telemarketing scheme. The group sold interests in phony wireless cable television systems.
Jolcover pleaded guilty to mail fraud, wire fraud, securities fraud and money laundering. He received a reduced sentence because he cooperated extensively with authorities, Landreth said. |
