Ziasun stock tout Theodore Melcher in the news:
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Stock touts write about Garcis
Several stock touts also wrote favourably about Garcis in 1995, and were paid in shares or cash. The first was Theodore Melcher of Tennessee, who wrote about the company five times between April 4, 1995, and April 20, 1995, in SGA Goldstar Whisper Stocks.
Mr. Melcher told subscribers that Garcis had deals with Southwest Airlines and the Las Vegas Hilton, and that Garcis expected revenues of $30-million in 1995. He was paid 50,000 shares.
Another tout, Florida newsletter writer George Chelekis, wrote about Garcis in 1995 in his Hot Stocks Whispers report. He said Southwest Airlines ordered 5,000 pairs of custom shoes, the Phoenician Hotel ordered 2,000 pairs of shoes and the Scottsdale Hilton ordered 1,000 pairs of shoes. Mr. Poirier and Mr. Palm paid Mr. Chelekis $4,000.
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SEC target Poirier was arrested in February
2007-07-25 18:34 ET - Street Wire
by Mike Caswell
This February Vancouver businessman Robert Poirier, 63, was arrested in Arizona and thrown in jail, where he remains. Police picked him up for contempt of court after he failed to pay a six-year-old fine he owed to the U.S. Securities and Exchange Commission.
The arrest came to light this Monday when the SEC filed a petition in B.C. Supreme Court seeking an interview with Mr. Poirier's son, Todd Poirier. The SEC, which is Canada's most respected regulator, says the senior Poirier is concealing ownership of a $6.4-million Arizona property by keeping it in his son Todd's name. (All figures are in U.S. dollars.)
The SEC's case
In 2001 the SEC won a $2.66-million fine against Robert Poirier and two other men for the fraudulent promotion of Garcis U.S.A. Inc., an athletic products company that traded on the OTC Bulletin Board. The other defendants were Vancouver penny stock promoter Robert Palm and an offshore nominee, James Vincent.
The SEC filed a complaint against the three men on Sept. 30, 1996. The regulator alleged the promoters made $2-million selling 1.2 million Garcis shares using accounts at Union Securities Inc., C.M. Oliver, Yorkton Securities Inc. and at several U.S. brokerages.
The SEC said the Garcis pump-and-dump began in 1994, when Mr. Palm and Mr. Poirier started discussing the possibility of forming a new company to be called Garcis USA Inc. They planned to merge the company with a public shell. Garcis was to distribute soccer uniforms, shoes and other products for a private Mexican company called Garcis SA.
Mr. Poirier secured a distribution deal with Garcis SA on Aug. 29, 1994. He told a partner, Robert Crain, that the agreement was the best deal he had seen and he expected to make a lot of money selling Garcis shares.
On Sept. 7, 1994, the men formed Garcis USA as a private company in Wyoming. It went public after a reverse takeover with Questex Group Ltd. Dec. 15, 1994.
Mr. Poirier and Mr. Palm issued themselves at least 3.5 million unregistered and free-trading shares of the Garcis. This amounted to 31 per cent of the 11.29 million shares the company had issued and 89 per cent of its free-trading shares.
The SEC said the Vancouver men were not officers or directors of Garcis because they believed holding such positions would restrict their ability to promote the stock.
From January, 1995, to September, 1995, Mr. Palm and Mr. Poirier "secretly dominated, controlled and funded the day-to-day operations of Garcis," the SEC claimed.
Key to the pump-and-dump were false and misleading news releases the pair issued. The SEC said Mr. Palm, on Jan. 19, 1995, issued a news release through PR Newswire announcing a deal with the Continental Indoor Soccer League. Then on March 7, 1995, Mr. Palm announced a $1.3-million sales backlog for the month of February, 1995, and that the company would be shipping products to Southwest Airlines.
The SEC said the news releases were false, because the company had no sales backlog or any dealings with Southwest Airlines.
Stock touts write about Garcis
Several stock touts also wrote favourably about Garcis in 1995, and were paid in shares or cash. The first was Theodore Melcher of Tennessee, who wrote about the company five times between April 4, 1995, and April 20, 1995, in SGA Goldstar Whisper Stocks.
Mr. Melcher told subscribers that Garcis had deals with Southwest Airlines and the Las Vegas Hilton, and that Garcis expected revenues of $30-million in 1995. He was paid 50,000 shares.
Another tout, Florida newsletter writer George Chelekis, wrote about Garcis in 1995 in his Hot Stocks Whispers report. He said Southwest Airlines ordered 5,000 pairs of custom shoes, the Phoenician Hotel ordered 2,000 pairs of shoes and the Scottsdale Hilton ordered 1,000 pairs of shoes. Mr. Poirier and Mr. Palm paid Mr. Chelekis $4,000.
Judge fines Poirier, Palm
The SEC won a summary judgment against Mr. Poirier and Mr. Palm in March, 2001. Arizona District Court Judge Earl Carroll ordered them to each pay a $100,000 fine and to jointly disgorge $2.6-million in illegal profits.
He also fined their offshore nominee, James Vincent, $100,000. Mr. Vincent worked from the Isle of Man.
The Vancouver men ignored the judge's order and were found in contempt of court on June 3, 2002. Judge Carroll issued a warrant for their arrest on July 1, 2002, and instructed the U.S. Marshals Service to bring them in.
Robert Poirier arrested
The case remained inactive until February, 2007, when Mr. Poirier made the mistake of travelling to Phoenix, Ariz. He was going to attend a court-ordered mediation in a property dispute unrelated to the SEC case.
It is not clear how the SEC learned Mr. Poirier was visiting, but court documents indicate police took him into custody on Feb. 20, 2007. He is being held at the Central Arizona Detention Center, which houses 2,304 inmates and is located about 45 miles north of Phoenix. The jail confirmed Mr. Poirier is still a guest.
Robert Poirier's proposal to pay his fine
On March 13, 2007, Mr. Poirier filed a proposal to satisfy the judgment and purge the contempt order, which he must do to get out of jail. He said he did not have enough money to pay the SEC right away, but he could sell a 640-acre property his family owns in Arizona to pay the fine.
Mr. Poirier attached his tax returns for the last six years to back his claim. They show he had little income, reporting nil in 2005 and $5,000 in 2004. Mr. Poirier said he and his wife own two Vancouver properties worth $2.5-million, plus other assets of $355,000. Offsetting these assets are $2.03-million in liabilities.
Mr. Poirier claimed he and his wife sunk almost all their money into building a "pocket cruiser" ship in Vancouver. Teton Investments, a private company they own 100 shares in, has spent over $3.7-million to date on the ship, but it still needs more work. The project has ground to a halt awaiting further financing, Mr. Poirier said.
The family has one other asset, the Arizona property. Mr. Poirier said his sons own the property, but they have agreed to sell it. He valued the property at $6.4-million, minus current liens of $2.5-million.
Mr. Poirier offered to place the property with the court immediately to expedite his release from jail.
SEC rejection
The SEC rejected the deal outright, and argued Mr. Poirier has $6.7-million in assets to pay the judgment. The SEC said Mr. Poirier's ship was appraised at $4.6-million, and Mr. Poirier and his wife have invested $3.7-million in it to date. They could sell the ship and pay the judgment.
Another possible resolution would be for Mr. Poirier to take a mortgage on the Arizona property and pay the outstanding judgment in full, the SEC argued. "However, until all funds satisfying the judgment are deposited in the Court Registry, Defendant Poirier should remain in custody," the SEC said.
The court delayed a hearing on Mr. Poirier's proposal, which means he must stay in jail. The delay was to allow the SEC to come to B.C. and collect evidence from Todd Poirier.
SEC comes to B.C.
In the B.C. petition, the SEC says Mr. Poirier and co-defendant Mr. Palm are the beneficial owners of the Arizona property, not Todd Poirier. The SEC is seeking a court order compelling Todd to testify and provide documentation about his ownership.
The SEC also says the Arizona property is encumbered by debts of up to $5.1-million.
Todd Poirier has documents necessary to the case, but he has declined to produce them, the SEC says. Until he does, the SEC cannot go ahead with a hearing to decide Mr. Poirier's release.
Robert Poirier's Arizona land
Mr. Poirier was in Arizona to settle a dispute over a 640-acre piece of land in Yavapai county, Arizona. A Calgary land developer, Frederick Armitstead, claimed he had an agreement to develop the property but Mr. Poirier tried to sell the land out from under him.
The SEC filed an affidavit from Mr. Armitstead as evidence that the property belongs to Mr. Poirier, even though it is registered to Westend Investments LLC, a company controlled by Mr. Poirier's son Todd.
In the affidavit, Mr. Armitstead says he has been friends with Mr. Poirier since 2000. He understands Mr. Palm to be Mr. Poirier's business partner.
Some time between 2000 and 2003, Mr. Poirier asked Mr. Armitstead if he was interested in developing the Yavapai property. The men met at the White Spot restaurant in Vancouver, where Mr. Poirier and Mr. Palm described how they bought the property 10 years earlier.
Mr. Armitstead agreed to contribute cash and land development expertise to the project, and Mr. Palm and Mr. Poirier agreed to contribute the property.
Shortly after, Mr. Armitstead's lawyers discovered the property was not registered to Mr. Palm or Mr. Poirier, but to Westend. Mr. Armitstead asked about the discrepancy, and Mr. Poirier explained that he put the property in Todd Poirier's name "for tax purposes."
Mr. Armitstead says the explanation seemed credible. Mr. Armitstead knew that Todd Poirier had no independent means of financial support and relied on his father for money.
Mr. Poirier and Mr. Palm's extravagant lifestyles also supported their contention that they owned the property. They told Mr. Armitstead about their trips to the Middle East, Europe and Africa. The men also showed Mr. Poirier a $2.7-million ship in dry dock that they claimed to own. Mr. Poirier drove a Lexus SUV and his wife a Lexus sports car.
Between 2003 and 2005 Mr. Armitstead says he worked with Mr. Poirier and Mr. Palm to develop the property, as agreed. The Vancouver men made all decisions about the property, and Todd Poirier had almost no input.
In late 2005, Mr. Armitstead learned his partners were trying to sell the property. He confronted them in a meeting at the White Spot restaurant in Vancouver. Mr. Poirier and Mr. Palm claimed they had a $6-million purchase offer, but had not told Mr. Armitstead about it because they were not sure how serious it was.
"They offered to pay me $500,000 for my services, but never did," Mr. Armitstead says in his affidavit. Mr. Armitstead sued the men in Arizona through his land development company, Acera Developments Inc.
The judge in that case had ordered all parties to attend mediation in Arizona, but with Mr. Poirier's arrest the negotiations may be on hold.
Robert Palm's Howe Street past
Ten years before the Garcis pump-and-dump, Mr. Palm was in the middle of a Howe Street deal that failed. In March, 1987, Alex Lenec's Greenwell Resources Corp. agreed to buy half of a $125-million Texas ranch from Mr. Palm's company, Advance Capital Services Corp.
Advance would receive 8.5 million preferred shares in Greenwell at a deemed price of $20 (Canadian). Greenwell's common shares traded at $1.12. The preferreds would have been convertible into common shares at two common shares for each preferred shares.
The resulting issue of 17 million shares would have been a change of control at Greenwell, requiring shareholder approval. Shareholders approved the deal on March 30, 1987.
On Sept. 29, 1987, Mr. Lenec said in a news release that the final papers were ready to be signed. The next day, at 8:10 a.m., the Vancouver Stock Exchange halted the company, pending clarification of the news and Greenwell's listing status.
The VSE explained the halt in an Oct. 27 news release, saying, "The company has failed to provide any clarification regarding the issuance of 31,720,000 shares without exchange acceptance which may be in breach of its listing agreement with the exchange."
According to a Form 20 Mr. Lenec filed on Oct. 27, 1987, Greenwell issued Advance Capital 20 million preferred shares at a deemed price of $25, for a total value of $500-million. There was no evidence in the filing that Advance Capital paid for the shares.
The company remained halted and never traded again.
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Reader Comments - Comments are open and unmoderated, although libelous remarks may be deleted. Opinions expressed do not necessarily reflect the views of Stockwatch.
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The author of this street wire, Mike Caswell, makes the following statement in para 2: "the SEC, which is Canada's most respected regulator ..." Well pardon me, but the SEC is the USA's national regulator. However, I would agree that Canadians ought to have respect for the SEC because it nails Canadian crooks like Poirier and Palm that the BCSC ignores.
Until we (Canada) do get a national regulator of our own that we can respect, we will continue to be victimized by people like Poirier and Palm.
Posted by Trammer @ 2007-07-25 21:20
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guess you really didn't get it did you trammer
Posted by dense @ 2007-07-26 00:02
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The message is clear. BCSC and OSC are useless organizations.
Posted by Trammer @ 2007-07-26 02:33
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the bcsc works for the SEC lets face it. same old sell out canadian style to our weakening US neighbours.
Posted by jack @ 2007-07-26 10:09
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