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Strategies & Market Trends : Conversion Solutions Holdings Corp. - A Scam?
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To: scion who wrote (4474)4/29/2011 2:26:53 PM
From: scion  Read Replies (1) of 4624
 
At CFO, just shortly after the collapse of Conversion Solutions, Defendants Harris and Stanley jumped to their third public company scheme in just 3-4 years. This also involved soliciting investments based on promises that the company actually owned financial instruments and real property, which apparently were bogus because (just as with Conversion Solutions and Broadband) the investments were lost. That the Defendants would continue promising non-existent assets just after their prior company was sued by a government agency for fraud based on similar claims shows intent.

These related schemes also show that what happened at Conversion Solutions was no accident or mistake. The Defendants may claim that they were duped by other con-men, who purported to sell them foreign bonds in specific transactions in 2006, which the Defendants believed were legitimate. That the Defendants were making the same or similar boasts relating to acquiring foreign bonds with regard to another public company two years before Conversion Solutions – and then continued to make other false statements with regard to yet another company shortly after Conversion Solutions collapsed – tends to refute any such defense. This was no mistake or naive dupery at the hands of other con-men. This was the modus operandi employed by the Defendants. See Hewes, 729 F.2d at 1315 n. 10 (“the defendants in the present case claimed that they were honest businessmen who had hit on a remarkable string of bad luck .... The extrinsic act evidence tended to refute that assertion by showing that the acts alleged in the indictment were not merely isolated, individual business failures but were the components of a pattern of illegal activity.”)

Finally, the Broadband (and CFO Advisory) schemes are admissible because they show a specific ongoing plan to utilize registered penny stocks for profit. They also show Stanley’s and Harris’s familiarity with public companies, SEC filing procedures, and other concepts. For example, Defendant Stanley in soliciting investors for CFO Advisory Group in 2007, indicated that the plan would include a “reverse merger,” whereby CFO Advisory (which was not publicly traded) would be merged with a publicly-traded shell corporation. This is exactly how Conversion Solutions became a publicly-traded company in 2006. The Defendant’s familiarity of this key concept is established by virtue of the CFO Advisory scheme. [3]

Extract, page 14
Doc 147 PDF file
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