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Tag: Allen E. Weintraub

  • INCREDIBLE! SEC Says Recidivist Huckster And Felon Allen E. Weintraub Is Scamming Again — This Time With Purported Facebook Shares; Court Grants Asset Freeze And Agency Publishes Phone Number To Take Complaints

    Allen E. Weintraub

    BULLETIN: The SEC is tackling another bizarre securities-fraud case in which the alleged elements read like fiction. In May 2011, the agency charged Allen E. Weintraub of Aventura, Fla., in a bogus “tender offer” caper in which he fraudulently claimed to have backers to purchase (for purported billions of dollars) Eastman Kodak Co. and AMR Corp., the parent company of American Airlines.

    Weintraub, who declared bankruptcy in 2007, submitted the bogus tender offers while he was on probation for two felony counts of organized fraud and one felony count of money-laundering, the agency charged.

    If that weren’t enough, the offers were submitted through a dissolved shell company known as Sterling Global Holdings while Weintraub was coming off a 2008 mortgage foreclosure. His criminal record dates back at least to 1992, according to records.

    Weintraub and Sterling Global were ordered in January 2012 to pay civil fines totaling $400,000 for the bizarre Kodak/AMR takeover fraud — and Weintraub once again was enjoined from violating federal securities laws. The January order followed a 2002 order in which Weintraub was banned from being an officer or director of a public company as a result of a previous scam, according to records.

    Alleged New Weintraub Fraud Emerges

    Now — incredibly — the SEC says Weintraub is presiding over yet-another fraud, this one involving the use of the alias “William Lewis” and three companies: Private Stock Transfer Inc., PST Investments III Inc. and World Financial Solutions.

    The latest scam involve the selling of “worthless shares” in an enterprise known as “PST Investments,” with Weintraub claiming he could arrange for customers to get pre-IPO shares of Facebook. The IPO scam operated at least in part through a website styled PrivateStockTransfer.com, the SEC alleged.

    As part of an emergency order and asset freeze, a federal judge has ordered the site taken offline. It was serving a blank page this morning, but Google cache suggests the site was active at least through April 10. The April 10 cache entry shows the logos of Twitter and Facebook, which potentially means that Weintraub was using two social media-platforms, including Facebook, to commit fraud against Facebook and possibly Twitter.

    Various government agencies have warned about social-networking fraud.

    Here is how the Google cache for the landing page of PrivateStockTransfer.com read (in part) on April 10 (italics added):

    Welcome to the leading company in PRIVATE STOCK buying and selling of the hottest PRIVATE COMPANIES. In the past only celebrities and big funds were invited to purchase shares in the hottest PRE-IPO companies. Today any accredited investor can have that opportunity as well. Today you can own stock in FACEBOOK, TWITTER, and other explosive pre-ipo companies.

    If you currently own stock in these companies and want to sell, Private Stock Transfer, can match you up to waiting buyers. No need to wait for the IPO to cash out. Today there is a Market for your Private Stock, and buyers waiting to buy.

    Another page on the site read (in part) on April 2 as follows, according to Google cache (italics added):

    FACEBOOK STOCK

    Currently available: April 1-30, 2012 or until sold

    100,000 Shares of common stock, PRICED at $38.00 a share and a minimum investment of 3,000 shares

    The April 2 page, according to the Google cache, asserted the offer was a “private placement” and, despite the offer of a specific number of shares and a “minimum investment” of 3,000 shares, asserted that “None of the information displayed represents a public offer to buy or sell any securities.”

    Regulators long have warned that scammers engage in wordplay and publish disclaimers to disguise the fraudulent sale of securities.

    Registration data for the domain shows it was registered to “bill lewis” of Tampa. The street address used in the domain registration appears to be the address of an office complex in Tampa that has a video-conferencing center among its amenities. The website was registered on Oct. 3, 2011, about five months after the SEC brought the “tender-offer” fraud case against Weintraub.

    As part of its latest Weintraub probe, the SEC has published the phone number and name of a specific senior attorney — and is asking the public for help.

    “The Division of Enforcement urges anyone who believes that Allen Weintraub may have recently defrauded them to contact John Rossetti, Senior Counsel, at 202-551-4819,” the agency announced — in bold type.

  • FLORIDA — AGAIN: Parolee, Larcenist And Recidivist Huckster Charged In New Fraud Caper; Allen E. Weintraub Made Bogus Takeover Bids For Kodak And AMR — And Caused AMR’s Trading Volume To Mushroom Sixfold, SEC Says

    Allen E. Weintraub of Aventura, Fla.

    Is it the oddest fraud story coming out of Florida to date?

    A man who emailed Eastman Kodak and AMR in March with offers to purchase the famous companies for billions of dollars had declared bankruptcy in 2007, was on probation for grand theft when the offers were made and extended the offers through a shell company the state of Florida dissolved last year for not filing its first annual report, the SEC said.

    On March 19, a Saturday, Allen E. Weintraub emailed  Kodak with a “tender offer” to purchase the firm for $1.3 billion in an all-cash deal through Sterling Global Holdings, his dissolved shell company. Ten days later, with his purported Kodak deal percolating, Weintraub emailed AMR, the parent company of American Airlines, and offered to plunk down about $3.25 billion in cash to acquire the company, the SEC said.

    Sterling Global “conducts no business and has no assets,” the SEC said. Regardless, Weintraub allegedly offered a premium nearly 50 percent above the prices of each of the firms’ stock.

    In a securities-fraud complaint that reads like an impossible work of fiction, the SEC alleged that Weintraub had been convicted three times in criminal fraud and grand larceny cases between 1992 and 2008. In 2003, he was ordered by a federal judge not to act as an officer and director of a public company after the SEC accused him of breaking securities laws, not disclosing his criminal past in filings and “dumping” shares. The agency obtained a judgment of $1.050 million against Weintraub in the case, which was filed in 2002.

    Weintraub was arrested for selling bogus hurricane insurance in Florida in 2005, according to records.

    Weintraub had paid only $220 on the SEC judgment, according to records. He was on probation for 10 years at the time the Kodak and AMR offers were made, the SEC said.

    Although Weintraub claimed to have financial backing to take over the companies, the SEC said its investigation revealed that he made visits to at least three “branch offices” of large commercial banks in his neighborhood, but emerged with no money.

    Why Weintraub allegedly discussed financing for major corporate takeovers through branch offices that cater to commuters instead of dealing directly with investment-banking units was unclear. Also unclear is why Weintraub claimed to have secured financing when no lenders signed onto a deal with Weintraub, a recent bankrupt who had an unpaid judgment of more than $1 million from the SEC case and also had been the subject of a 2006 foreclosure action in Florida involving a $1 million promissory note on a property at Golden Beach in Miami-Dade County.

    What is clear is that Weintraub created a sideshow involving both firms by embarking on a media campaign after announcing his takeover bids, according to the SEC.

    “In an effort to generate publicity, Weintraub emailed the purported tender offers to media outlets and financial investment research firms,” the SEC said. “In published media interviews, Weintraub boasted that he has 15 years[‘] experience buying distressed companies, that banks had agreed to finance the acquisitions, and that letters of credit could be readily provided.”

    And Weintraub pumped up the offers by creating the appearance that he was at the helm of a global enterprise, rather than a dissolved Florida company formed in October 2009 that did not even file its first required annual report the following year.

    Indeed, the SEC said, Sterling’s Global’s “letterhead listed the cities Atlanta, Cleveland, Denver, Dubai, London, Los Angeles, Miami, New York, and Tel Aviv, creating a false impression that Sterling Global had offices in each of those cities.”

    The address used in the tender offers was a “nothing more than a mail drop” in Davie, Fla., the SEC said.

    As news about the AMR offer appeared, the trading volume of the stock jumped more than sixfold, the SEC said.

    “The trading volume in AMR’s stock rose from approximately 5 million shares on March 29 to approximately 31.5 million shares on March 30,” the SEC said. “The lack of any other AMR or airline industry news indicates that the March 30 price and volume movement were affected by the media coverage of Sterling Global’s AMR tender offer that occurred in the late afternoon of March 29.”

    Weintraub has been charged with securities fraud and violations of the tender offer rule.

    “Neither Weintraub nor Sterling Global has the means to purchase either Kodak or AMR by tender offer or otherwise as they have no substantial assets or resources,” the SEC said.

    Read the SEC complaint.