Dying firm is revived for offshore trading
By CHRISTOPHER CAREY
Of the Post-Dispatch
06/13/2004
The hard-luck tale of Almost Country Productions Inc. is enough to inspire a classic barroom weeper.
The Utah-based company sold $30,000 worth of stock in 1997 to bankroll the musical ambitions of its president, Pamela Lindquist. But the recording she produced, "Wildest Dream," was anything but a hit.
In three years, she sold fewer than 500 CDs and cassettes. Almost Country's cut of the royalties was $636.
What happened next shows how failed companies can be resurrected as vehicles for global stock schemes.
Out of money and out of hope, Almost Country brought in Salt Lake City businessman Reed L. Benson to find fresh capital and identify new opportunities.
He didn't have to look far. Taking advantage of Almost Country's status as a publicly traded company, he arranged a merger with Real Estate Federation Inc., another Utah business, which was pushing an Internet-based home listing and referral service.
One block of shares in the combined company went to a consulting firm formed by Bryant D. Cragun and Lynn W. Briggs, two associates of Benson's who were becoming controversial figures in the investment world.
Cragun had an ownership interest in two offshore investment firms, Oxford International Management and PT Dolok Permai, a Post-Dispatch investigation shows. The Internet site for PT Dolok, listed Briggs among the brokers in its European and Asian offices.
Securities regulators have characterized both firms - now defunct - as unlicensed "boiler rooms" that sold shares of small U.S. companies to foreign investors.
In the merger of Almost Country and Real Estate Federation, nearly a quarter of the shares went to Calico Ltd., whose address is a post office box in the Turks and Caicos Islands. The Caribbean archipelago has attractive financial secrecy laws and no income tax.
The same address pops up in Securities and Exchange Commission filings for Broadcast International Inc., where Benson is vice president and general counsel. Its biggest shareholder also uses the post office box. And its shares were pushed by the same two offshore firms that sold shares in Real Estate Federation.
Spanish regulators last year warned that one of them, Carlton Birtal Advisory Services of Barcelona, was offering investments without a license. They identified Benson as one of the people related to the firm.
Real Estate Federation is now called Xvariant Inc. and has added virtual home tours to its arsenal. But it failed to gain a meaningful share of the market and struggled financially.
It posted revenue of $2.07 million and a loss of $884,400 in the nine months that ended June 30, 2003, the last time it filed financial information with the Securities and Exchange Commission.
The stock, which hit a high of $5 a share in summer 2002, now trades for less than 30 cents. Xvariant said in the SEC filing that without an infusion of cash, it faced oblivion.
Broadcast International reported revenue of $4.93 million for 2003. It had a loss, excluding special charges, of $1.77 million.
Its stock is listed at about $6 on the over-the-counter market, but trading volume is almost nonexistent. |
