Troubled waste-oil recyclers barely functioning
BY JOHN P. MCDERMOTT
Of The Post and Courier Staff
It seemed that wherever Green Oasis Environmental Inc. went, trouble invariably followed.
In its startup days, the waste-oil recycling company triggered a gusher of complaints after firing up its loud, smelly portable refinery near some upscale Mount Pleasant neighborhoods. Later, the state slapped the company's wrists for selling more than $2 million in unregistered stock in South Carolina.
But those missteps paled compared with what was to come.
Green Oasis and its chief executive, Bill Carraway, were implicated in a 1997 stock-trading fraud case that gained national attention. And about two years ago, Carraway was indicted on federal tax-evasion charges stemming from sales of his shares in the company.
Somehow, the perennially troubled, publicly traded company managed to hang on, if ever so tenuously. Today, however, its prospects are dimmer than ever.
Carraway pleaded guilty last year to tax fraud. He is scheduled to report to a federal prison on or after May 15 to serve out an 18-month sentence.
Meanwhile, Green Oasis recently sold off at an undisclosed price its only remaining asset: the Rube Goldberg-like oil-processing machine that sat mostly idle for about nine years off Greenleaf Street. The buyer, Ampco Peru Sac., had the prototype device disassembled and shipped to South America within the last few weeks, according to Green Oasis' landlord, Allied Terminals Inc.
The trailer that Green Oasis used for its headquarters also was hauled away. All that remains on the site are the waste-oil tanks that fed the refinery on the rare occasions when it was running.
Briefly contacted on his cell phone last week, Carraway declined to comment about thesale of the recycling machine to Ampco, a Peruvian waste-oil processor. "I really can't," he said, just before the connection faded out.
Carraway could not be reached afterward to elaborate about what will become of Green Oasis.
If this is indeed the final chapter in the winding Green Oasis saga, it would mark the end of one of the area's most embattled private enterprises, one with an intriguing plan but little regard for rules and regulations.
The company claimed to have developed a much-disputed refining technology that could convert used motor oil into low-grade diesel fuel. In a newspaper interview a decade ago, Carraway said that he acquired the process through a soured investment. The plain-spoken CEO recounted how he tinkered with the technology in his garage with the help of a chemical engineer, and eventually built larger and larger oil-processing prototypes.
"I became very intrigued that there were gallons of this stuff being ignored," he said in 1995. "The stuff was $5 a gallon just 3,000 miles ago. Now it's just dirty."
The company literally made a stink when Carraway moved it to Mount Pleasant from Florida in 1993. Neighbors complained about noxious odors emitting from the miniature refinery, then located off Long Point Road. State environmental regulators forced Carraway to shut down the unit and then slapped the company with a $20,000 fine for operating without a permit.
The company's fortunes seemed to improve after its stock began trading on the over-the-counter market in the spring of 1996. Suddenly, a wave of publicity began to wash over the obscure business. Press releases described the multimillion-dollar orders that were pouring into the company. Investors began debating Green Oasis' prospects in online chat rooms.
As the stock price started rising, enforcement officials at the National Association of Securities Dealers watched with interest. They quietly opened an investigation into Green Oasis.
Authorities eventually focused on activity in the company stock in March 1996, when Carraway gave 20,000 shares to Illinois-based Microcap Consulting & Communications, owned by Raymond C. "Bo" O'Brien, according to a court document.
The day after Green Oasis shares began trading, O'Brien issued a "flash-aggressive buy recommendation" for the stock in a report circulated by Tecumseh Asset Management, which he also owned. At the time, Green Oasis' prototype refinery "lay disassembled in a field," the Securities and Exchange Commission later determined.
Nonetheless, Microcap Consulting began issuing the first of 31 upbeat but mostly misleading press releases on developments at Green Oasis. One trumpeted the fact that Green Oasis had received an order for three of its processing units, a deal valued at $5.4 million, from an Illinois business called RecOil. As it turned out, RecOil's was owned by O'Brien, who didn't have the wherewithal to buy, install or operate the machines.
The ruse, known as a "pump and dump" scheme, was effective for a time. In early 1997, Green Oasis' stock jumped from less than $2 to nearly $10 a share. But in May of that same year, the SEC halted sales of the stock. When trading resumed 10 business days later, the price plunged 60 percent to $2. It never regained altitude, causing huge losses for some investors.
By then, organizers of the scheme already had cashed in on the run-up, prompting the SEC to bring a lawsuit for stock-price manipulation. Regulators said Carraway, O'Brien and others sold shares between May 1996 and May 1997 valued at more than $2.3 million.
The case was settled in 2001. As part of his negotiated deal, Carraway agreed to disgorge more than $1 million in illicit profits and interest, but only on the condition that the requirement be waived because he didn't have the ability to repay the money. Green Oasis said in a statement he reinvested the proceeds into the business "to ensure the company's future."
By then, a criminal investigation targeting Carraway was well under way. The Internal Revenue Service found that he failed to report $1.2 million in taxable capital gains earned from sales of his Green Oasis stock between 1994 and 1996.
Carraway was indicted in April 2003 on seven counts of tax evasion and pleaded not guilty. He changed his plea to guilty to three of the charges last February, and federal prosecutors dismissed the others.
At a hearing last year, Carraway acknowledged that he was aware he did not report the capital gains but said he had planned to amend his tax filings later. But "then other events came into play," he said, referring to the SEC probe.
Carraway faced up to three years on each count and a $100,000 fine but received a reduced sentence. The court recommended he serve his time in the low-security Federal Correctional Institute in Lompoc, Calif.
As he awaits the start of his sentence, Carraway, a former Pawleys Island resident, is said to be living in North Carolina, according to an acquaintance.
As for Green Oasis, its nearly worthless stock hasn't traded since last September, according to Yahoo, which estimates the total value of the roughly 6.5 million outstanding shares is $650.
The company continues to draw notice, albeit it's faint at best.
Mostly anonymous online chat-room participants continue to weigh in on Carraway and the merits of Green Oasis' recycling technology at SiliconIvestor.com, though far less frequently than they did in the late 1990s.
Also, the company's Web site still functions, meaning someone is paying the bills.
The telephone works, too, and a machine answered incoming calls last week. Carraway changed the greeting recently to remove any mention of Green Oasis.
"Please leave your phone number," he instructs callers. "Thank you." |
