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Microcap & Penny Stocks : Veronex Technologies Inc. (VXTK) -- Ignore unavailable to you. Want to Upgrade?

To: TEDennis who wrote (366)	5/22/1998 12:37:00 PM
From: Hoatzin	Read Replies (3) \| Respond to of 684

From today's LA Times: (I can't find a direct link to post, so I will paste the article. It can be found at latimes.com if you use their search engine to find "Venture") Officials Seize Records From Computer Firm Investigation: Venture Tech 2000 accused of lying to investors, who may have lost a total of more than $2.1 million. By JEFF LEEDS, Times Staff Writer Investigators raided an Encino computer consulting firm Thursday, alleging in an affidavit that the company lied to investors and sold unregistered securities in a yearlong telemarketing scam. As they began poring over computer files and other records seized in the raid on Venture Tech 2000, investigators said the company's 86 investors may have lost more than $2.1 million in all. The joint investigation by local, state and federal agencies was prompted by an April 5 article in The Times, according to the affidavit filed in support of Thursday's search. As part of the investigation, authorities are reviewing tape recordings of conversations between telemarketers and mostly elderly volunteers working undercover for the FBI, the affidavit said. Investigators from the state Department of Corporations and the Santa Cruz district attorney's office also questioned Venture Tech 2000's chief executive officer, Larry A. Boose, and three telemarketers. No arrests were made. Venture Tech 2000, which told investors it offered software and programmers to deal with the "Year 2000" computer problem, was financed initially by one of the principals of an earlier telemarketing operation, according to Boose. The Federal Trade Commission won a court injunction to shut down that company in June of last year. "We're not looking for an injunction," said Assistant Dist. Atty. Jim Jackson, who is overseeing the case for Santa Cruz County, where at least one investor lives. "We're looking for a criminal case. It's a more effective way of keeping them off the necks of our citizens." Since March 1997, Venture Tech 2000 had operated two offices on Ventura Boulevard. One was a suite for the company's computer software marketing effort. The other, authorities said, was the telemarketers' "boiler room," a phone room nicknamed for the basement-run scams of the early 1900s. In April, The Times reported that employees of Global Mining Consulting--a telemarketing firm accused by the FTC of fraud--had used the same boiler room. One of the employees later put up the cash to start Venture Tech 2000, and at least six of the telemarketers went to work there, Boose has said. Boose also told investigators Thursday that the firm had raised $2.1 million from investors. But as of Thursday, investigators said, it appeared the company had arranged only one contract--for $15,000--and had only $2,000 in assets. "The money was just going to salaries as far as I can see," said Alan A. Johnson, an investigator with the Santa Cruz district attorney's office. That picture stands in sharp contrast to the one sold to investors, authorities said. Venture Tech 2000's colorful prospectus states shareholders can expect a 476% return in five years. The prospectus is rife with quotes excerpted from computer magazines warning of the Year 2000 problem--a glitch tied to the way computers keep time--and invites readers to buy into "what we believe will be the most beneficial and lucrative opportunity for the 21st century and beyond." In cold calls to potential investors--including dozens of elderly people who had lost thousands on the Global mining venture--telemarketers asked for a minimum of $20,000. According to the affidavit, Venture Tech 2000's telemarketers made a series of false claims on the FBI's undercover recordings. One telemarketer said the company had had lucrative contracts with Motorola and Computer Sciences Corp. Another promised investors would make a minimum 17.5% return because the company had a contract to build virtual reality games for a San Diego entertainment center. Another said it was recruiting programmers in Russia. "I don't know what it'll be next week," Jackson said. "Maybe moon launchers." Boose could not be reached for comment Thursday. But in an earlier interview, he defended the company as a legitimate enterprise. He said he didn't know any of his colleagues had been in trouble with the law.