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To: StocksDATsoar who wrote (114069)	4/28/2003 1:41:40 PM
From: StockDung	Respond to of 150070

"This is a far more extraordinary fraud than Bre-X ever was. How (Rabi) was permitted by the SEC to run a company is crazy." 800America.com exec not co-operating: SEC By Ottawa Business Journal Staff Sun, Apr 27, 2003 8:00 AM EST The prosecution of 800America.com Inc.'s chief executive David Rabi continues despite his failure to respond to the charges. The criminal case, which is being tried by the U.S. District Attorney's office in the southern district of New York, appears to be targeting Rabi now that charges against his companion, Ruth Steeples, have been partially stayed. David Rosenfeld, an assistant regional director of the Securities and Exchange Commission (SEC), says the case is progressing although Rabi has been reluctant to answer to the numerous charges against him. "The criminal case is ongoing," Rosenfeld says. "He has not answered to the complaints. He's not fighting us." The SEC initially brought up numerous fraud charges against Rabi in November, much to the surprise of shareholders in Ottawa. In its investigation, the SEC alleged that Rabi created the illusion that 800America was a vibrant, profitable company by reporting millions of dollars in fictitious revenues. Among a host of other charges, Rabi and his companion were also accused of deliberately hiding their criminal pasts, which included incidents dating back decades in Canada, Monaco, Israel, Italy and New York. Five months after the fraud allegations came to light, local investors in 800America.com say they are no closer to finding answers over how the alleged fraud could go unnoticed. John Roberts, the founder of CS-Live.com Inc., says he feels fortunate that he demanded a cash payment from 800America.com as part of the company's deal to buy CS-Live.com. In August 2001, the local dot-com was purchased by 800America.com for $2.7 million in a cash and stock deal. Roberts, who was just days away from cashing in his shares last November when the scandal broke, says the incident was a unique experience in his long career in high tech. "It was the first time anything like that happened to me," he says. "I never had experience with something like that before." Roberts recalls that he never met Rabi when 800America.com was negotiating to purchase CS-Live.com. He was told Rabi was chronically ill and could not go anywhere without breathing apparatus and oxygen bottles. Despite this alleged illness, which was supposed to prevent Rabi from travelling to Ottawa, Roberts says Rabi was described as a "brilliant businessman." Roberts says the main lesson learned from the 800America.com scandal is to pay closer attention to the due diligence process. "Check the people very carefully that you involve yourself with," Roberts says. While Roberts and other investors behind CS-Live.com got burned, some local executives escaped the scandal with much of their investment intact. Besides CS-Live.com, 800America also owned local dot-com firms Ebiz4biz.com Inc., Youtopia.com and IPSPayment.com. Local mining executive Robin Dow, who brokered a deal to transform his mining company China Clipper into Ebiz4biz.com in 2000, says he was able to cash in his stake in 800America.com as soon as the hold on his shares was lifted. 800America bought Ebiz4biz in early 2001. "When the hold came off, most took the money," Dow says. "This is a far more extraordinary fraud than Bre-X ever was. How (Rabi) was permitted by the SEC to run a company is crazy." Since Dow advised other mining executives who held 800America.com shares through their original involvement with China Clipper, many were also spared heavy losses. — Michael Hammond