*** The $100 Million Financing Scam ***
The $100 Million Dollar Financing scam works like this...
***STEP 1 - CREATING $100 MILLION FROM $25k***
1. Have a a group of scumbag promoters form a pennystock shell - lets call it Scamco Inc.
Scamco Inc. is organized with 100 million shares outstanding, all owned by the scumbag promoters and their nominees - lets call them the 'players'.
Basically Scamco Inc. is a pennystock boxjob. The 'players' then get Scamco Inc. trading for $1 per share. This is not hard, because there are no real public shareholders in Scamco. Inc. only the 'players'. The players pay a market maker to file with the NASD and the maket maker puts up a bid of $1, offer of $10 for Scamco.inc, although no stock trades.
The market cap of Scamco Inc. is now $100 million. The players of Scamco Inc. 'donate' Scamco to Life Foundation Truss, (lets call them LF Truss for short), thus making Scamco Inc. the property of LF Truss, and giving LF Truss the right to claim their assets are worth $100 million.
In reality the penny stock is worth the $25k it cost to organize the company - that's about it. But because of the identifiable market cap due to the trading value of the stock, (even though the stock really does not trade), LF Truss is able to carry the company on it's books at a $100 million value.
Add 10 companies like that to LF Truss and LF Truss is able to claim 1 billion in assets... Is this starting to sound familiar?
2. ***STEP 2 - SCAMMING THE PUBLIC OUT OF 100 MILLION***
Next, LF Truss makes an agreement in principal to transfer investment securities to HurtsGalore.com - a public company, in exchange for 4 million shares of HurtsGalore.com restricted common stock that the LF Truss will hold under a lock-up agreement.
The lock-up agreement forces LF Truss to hold the stock for 10 days before they are allowed to sell the 4 million shares.
***STEP 3 - THE BAIT***
HurtsGalore.com issues a press release announcing the $100 million equity investment by LF Truss and sucker investors drive the price of Scamco Inc. to $21 - fueled by Scamco Inc. players who post on stock boards that the stock is a buy - going to $50, bla bla bla...
Instead of holding the stock, LF Truss 'players' short HurtsGalore.com stock in offshore accounts so they can capitalize on the recent price increase in HurtsGalore.com stock caused by the press release which the investing public think means 100 million of cash is going to be placed into HurtsGalore.com....
Meanwhile Scamco Inc. 'players' are selling stock for $20 that they purchased for less than one penny. LF Truss is also selling. They're selling their 4 million shares for as much as they can get, allowing them to cash in the $4 million shares for between $50 and $100 million dollars. Keep in mind LF Truss traded a $25k public shell for what now has become $50-100 million CASH.
Silly investors buy HurtsGalore.com stock because they read the HurtsGalore.com press releases and listen to the HurtsGalore.com 'players' who are hyping HurtsGalore.com stock on various stock boards as now being worth $25/share, because LF Truss traded 4 million HurtsGalore.com shares for 100 million.
Unfortunately, the investing public does not know LF Truss really traded a penny stock shell - worth about $25k for 4 million shares of HurtsGalore.com stock.
One year after this event takes place, the LF Truss and HurtsGalore.com 'players' now each have new houses in 5 different countries, and have new cars filling the 4 car garages of each house.
HurtsGalore.com stock now trades for $.14-18 as the company spent all of its working capital on salaries and consulting fees - paid to the players in this scam.
BUYER BEWARE... |
