D. Hagen: I'm am so delighted that you have signed on. I only wish that the CEOs of more companies were willing to accept questions off the internet; it would certainly eliminate a lot of misunderstandings and incorrect information. It is a shame you didn't show up earlier, when I suggested it here last summer; Patrick said you were much too busy, so I am glad you were finally able to find the time.
Unfortunately, I don't have much time at the moment. Due to some things going on in my business and personal life, I am unlikely to have any time for posting for at least a week on any thread. Nevertheless, I don't want anyone to think that you scared me off, so I am writing this.
As for your drug conviction, as I have said before, I don't hold that against you in the slightest. As a libertarian, I don't believe that the government has any business determining what substances people choose to ingest. You were found guilty of breaking a law that shouldn't exist. That is not meant to be critical of your decision to be sober since then, which I believe is a good idea. I knew about your history last summer and never talked about it in any public post because I thought it was irrelevant to the issues. I only mentioned recently because it was relevant; given the SEC investigation, and the fact that many times the SEC's information is turned over to a federal prosecutor for possible criminal action, it struck me as likely that a CEO with one conviction under his belt may deal with another possible criminal case differently than one with no such background.
Your claim, BTW, that I called you a drug dealer is false. I don't have time to review every post I have made right now, but I am sure I never called you one because I don't think you are one, and there is zero evidence that you are. If you can find any place where I said such a thing, please let me know and I will specifically disavow it, in addition to the general disavowal that I am doing right now.
Now on to DH Marketing & Consulting. I could easily ask you many thousands of questions, probably much more than the SEC could even think of, but I don't have the time to do that now. I might in a week or two though, when things quiet down a bit for me. In the meantime, let me just ask a few, related to the implication in your post that you had nothing to do with the financial statements, i.e, that they were all the work of your accountants.
That is nonsense, of course. The deal with accountants is that management prepares the financial statements and accountants, if they can't find any fraud, certify them. Please read the accountants' letter in your 10-K if you doubt my explanation. And contrary to your post, the new accountants in Salt Lake City did not take over in mid December, when the old accountants dropped DHMG as a client, but actually well into January, long enough after the December 31 date of their audited 10-K, to make a reasonable person raise an eyebrow or two.
So let me ask you about just one issue. The accounting firm of Niessen, Dunlap & Pritchard, P.C. of Colmar, PA audited your September 1997 10-Q. In it, they place a value of $1,450,000 on DHMG's investment in Frama, Inc., based on the supposed value of its shares that you took in trade for something or other that you supposedly sold to it. Then, in the December 10-K, audited by the firm of Crouch, Beirwolf and Chisholm of Salt Lake City, UT, that figure was completely missing from the books, as if it never existed. There is no evidence in the cash flow statement that you sold Frama for exactly $1,450,000 nor any evidence in the income statement, in the form of either gain or loss, that you sold your investment in Fama for a figure other than $1,450,000.
Given the size of your company, we are talking about a lot of money. Now you say that "They are each outstanding accounting firms with impeccable reputations", yet they are clearly contradicting each other. One of them has made a terrible mistake. Which of these impeccable firms is incompetent, in your opinion? They can't both be right. And if one of them is clearly incompetent on such a serious matter, why do you object to my being critical of their handling of many other matters?
While we are talking about Frama, Inc., what did you supposedly sell to them? Who are they, and why did they buy it? On what basis did you value the stock in Frama that they gave you in trade? (Unless we agree with the current impeccable accountants, who, unlike the former impeccable accountants, deny that you took any shares in trade.)
What about the other large shareholders of DHMG who produced 88% of the company's sales in 1997? Given that they would benefit greatly, as large shareholders, from any profits you would show from their transactions, and they almost never paid you real American money for the goods and services you supposedly sold them, why in the world should we believe that these transactions were NOT rigged?
Like I said, I could ask thousands of questions, but these seem good for starters. I do appreciate your willingness to entertain them. I may be out of action for a week or so, but I am interested in your response. Thanks. |
