Rats #2:
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Today is Mar-11-1998
NVID FRAUD TRIAL Accused tries to pass buck
By Michael Pollick STAFF WRITER
TAMPA -- Hunched over, but with his voice still strong, former NVID International President Robert Bunte told a jury Tuesday that he had been president in title only.
In testimony and cross-examination that lasted most of the day, Bunte tried repeatedly to persuade jurors that his big mistake at NVID was not fraud, but complying too readily with the man who he says ran the Sarasota-based company without a formal title, Matthew Klenovic.
Klenovic, faced with federal fraud charges when the two were arrested last spring at NVID's South Tamiami Trail headquarters, signed a guilty plea in the fall and has been cooperating with prosecutors. Klenovic testified last week, saying Bunte was to blame for many of the penny stock company's illegal actions.
Bunte said that's false.
''I considered Matt a very dear friend up until the day of his testimony,'' testified Bunte, 51. ''My first reaction was disbelief. Second was, was I that big of a fool? Did I trust Matt too much?''
Bunte is on trial on federal charges of stealing $170,000 from his company while it was in the midst of a stock-selling frenzy in 1996, then covering up the act with a post-dated set of documents. He is also accused of hyping a disinfectant product that was far from being ready to market as NVID raised $3.3 million from unsuspecting investors, many of whom read the company's press releases on the Internet.
Even though he was president of the company, Bunte said, he was almost always acting on orders from Klenovic, who was the principal stockholder.
During his six hours of testimony, Bunte repeatedly blamed Klenovic for his actions:
-- Klenovic said not to worry about selling three times as much stock as is allowed under Securities and Exchange Commission rules. ''Matt said, 'If something happens, all they're going to do is slap our hands,''' Bunte testified.
-- Klenovic said it would be OK to write checks to themselves -- using money generated by the stock offering -- in order to pay cash for Sarasota homes.
-- Klenovic said it would be acceptable to prepare a complete backdated set of documents to make it look like NVID shareholders had approved a stock sale that would help explain a check-writing spree a year earlier.
Bunte told his story from the beginning, saying he had been a down-and-out entrepreneur who controlled a bankrupt shell of a stock company, Network Video Inc.
Then Marilee Kline, an old friend and business associate who had once owned a Network Video store on Siesta Key, introduced Bunte to her new boyfriend, Matthew Klenovic, Bunte said.
In 1994, Klenovic and Bunte agreed to use Bunte's shell corporation as a new home for a Sarasota business Klenovic had started that distributed and installed electronic ionization equipment to purify water in swimming pools and tanks.
What Klenovic did not tell Bunte was that Klenovic already faced extensive litigation with the SEC for questionable stock transactions in another public company, Standard Oil & Exploration of Delaware, Bunte testified.
''He said he was active in oil and gas exploration,'' Bunte testified. ''I never gave it any thought after that.''
The first Bunte learned of Klenovic's SEC problems, said Bunte, was when a disgruntled Sarasota business associate presented Bunte with an article from the Herald-Tribune, providing details on Klenovic's role in Standard Oil & Exploration and the resulting SEC action.
Klenovic was facing an SEC settlement in which he would eventually agree to refrain from running a stock company for five years. That is why, at NVID, he had no official role, and only now admits in testimony that he was NVID's ''control person.''
Even after learning of Klenovic's SEC dispute, Bunte did not pursue the matter in any great depth.
Bunte said that after he confronted Klenovic with the article, Klenovic told him, ''Yeah, I've got a dispute; it's no big deal and it is due to be settled.''
''Because I trusted him, I let it go at that,'' Bunte told the jurors. The two men then continued to run NVID until charges were filed in April.
Bunte's testimony came after four days of testimony and documentation against him by the prosecution. He is expected to face further cross-examination this morning.
Jury deliberations are expected to begin by Friday.
Bunte faces up to 10 years in prison on the most serious charge, money laundering. The other 16 felonies -- conspiracy to defraud and securities, wire and mail fraud -- can each result in five years in prison. Bunte has no prior record of problems with police or the SEC.
Klenovic's sentencing has been postponed until after Bunte's case is resolved.
SARASOTA (FLA.) HERALD-TRIBUNE -- MARCH 11, 1998
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Eric |
