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Sons of Scam
San Diego — The 3M Co. of St. Paul, Minnesota, is one of the world's best-managed companies. It is among the 30 blue chips making up the Dow Jones Industrial Average. It makes Scotch tape and thousands of other products in such areas as electronics, safety, telecommunications, graphic arts, and health care. It represents all the Midwestern virtues of hard work, modesty, ingenuousness and ingeniousness, and superior technological innovation.
Similarly, S&S Worldwide is a company in rural Colchester, Connecticut, that makes arts and crafts, school supplies, and religious products. Verily, it radiates New England rectitude. "Our purpose is to improve the social fabric by helping people play," says S&S.
San Diego has a 3M and an S&S, too. These -- er, uh -- creative enterprises represent all the characteristics of Southern California entrepreneurialism: disingenuousness, cozenage, hokey-pokey. Indeed, they are what California's postal designation, CA, may actually stand for: Con Artistry.
San Diego's 3M are Maradei-McPherson-Moran, telemarketing flimflammers with a long history of being pursued by federal government law enforcement, as well as enraged investors who have been fleeced.
On December 11, Mark Maradei pleaded guilty to federal tax evasion. In April of 2003, when he learned that there was a federal criminal grand jury probing Internet Web Services Co. (IWSC) and A2Z Shopping.com -- two companies at which he had worked alongside Robin McPherson and Steven Moran -- Maradei admitted that he had not paid federal income tax for several years. His maximum sentence is five years in the slammer.
McPherson is a fugitive, according to Denise Rubin, special agent in charge of the San Diego Internal Revenue Service Criminal Investigation office. In December of 2000, McPherson was convicted of tax evasion and conspiracy to defraud the United States for his role in Continental Wireless Cable and related companies, a telemarketing scam that skinned $10 million from investors before it was shut down by the Securities and Exchange Commission. McPherson never showed up for his sentencing in March of 2001 and hasn't been seen since.
McPherson's role as president of Continental Wireless dates back to the early 1990s. According to the county's intergovernmental Boiler Room Task Force, McPherson had earlier been in trouble for securities violations in California -- one reason, perhaps, why he also went by the alias of Robin Ribble. His "teletouts" promised investors 100 percent annual returns.
Maradei and Moran soon picked up the beat. In their telemarketing wireless cable scams, Knoxville LLC and TENEVA Impound Management, they promised 300 to 400 percent returns in two to four years. At that time, wireless cable telemarketing scams were so virulent that the Securities and Exchange Commission set up a task force to fight them. In a settlement in U.S. district court, Moran and Maradei were each ordered to shell out $1 million in disgorgement of ill-gotten gains and civil penalties.
Moran did some hard time on that one. When the bankruptcy trustee was searching for assets, Moran took the Fifth Amendment over the proceeds of a Mercedes-Benz he owned. An exasperated judge dispatched him to the pokey for contempt of court.
From there, Moran went into what was, for him, high finance: so-called mortgage foreclosure consulting. He and two soul mates, from an office in Rancho Bernardo, took up-front fees from desperate homeowners in default on their mortgages. Moran and crew promised that they would be able to renegotiate with the lenders. If the negotiations were unsuccessful, the up-front fees would be returned. But the despondent homeowners weren't helped and didn't get their money back, said the district attorney's office. Moran and his two colleagues pleaded guilty to deceitful practices, and Moran got three years of probation.
Then Maradei, Moran, and McPherson combined their expertise in securities scams with the Internet. In Maradei's plea agreement with the government, the 3M's Internet telemarketing/spam scam is spelled out in detail.
In 1997, Robin McPherson and two colleagues, Bryan and Robert Hertz, launched Internet Web Services (IWSC), an Internet service provider. Their telespielers and spammers pitched a double-deal: by plunking $10,000 to $80,000 in the pot, investors could set up an online shopping mall that the company would support. Those malls would sell name-brand merchandise through a drop-ship arrangement to be lined up with manufacturers. Also, the investors could buy shares. The stock would soon go public and zoom up 600 to 1000 percent in short order.
Soon, Moran came aboard. The company made numerous misrepresentations -- such as on the drop-ship arrangement, which didn't work -- according to the plea agreement. But as it plucked $6 million from investors' pockets, the company piled up huge debts, and the California Department of Corporations was on its tail. So it filed for bankruptcy, utilizing offshore trusts and corporations in the machinations.
Soon, a company called A2Z USA was born. It had essentially the same personnel and same modus operandi -- and heard even more intense screams from cuckolded investors whose online malls and stock were both worthless. Moran was president. McPherson disappeared to Canada to set up a Vancouver sales office. Moran considered him "radioactive," according to the plea agreement, because of his indictments in the U.S. Maradei was a hotshot salesman, reporting to Moran and McPherson.
British Columbia securities regulators closed up the operation there, naming McPherson, Moran, and Maradei in its actions. (Vancouver is a world center of hyper-speculation and fraud. Getting kicked out of Vancouver for humbuggery is like getting ousted from the John Birch Society for extremism.) But before it was all over, the A2Z scam snatched $12 million from investors, according to the Maradei plea agreement.
There are more shoes to drop as the grand jury's work continues. "IRS Criminal Investigation will continue to aggressively investigate telemarketers who solicit funds under fraudulent pretenses from the unsuspecting public, and then fail to report the profits they make," says Rubin.
Then there is San Diego's S&S. It was a golf caper. That's not surprising. North County is the center of the world's golf-equipment industry. And it's also the center of golf scams, such as the 90-day golf club telemarketing racket. Golfers are told that they can buy a set of clubs for $1500 or so, and if they aren't satisfied, they can return them in 90 days and get their money back. But after 90 days, the company won't return the funds, and it's too late to get money from the credit card company.
But San Diego's S&S, August L. Slivnik and Jeffrey C. Stein, tried a new one. Slivnik is the son of the owner of a machine shop that for years has done manufacturing for San Marcos's legendary Scotty Cameron, whose Pro Line putters are sold by Titleist. According to the district attorney's office, Slivnik swiped two stamps that bore Cameron's trademark.
Soon, phony Scotty Cameron Pro Line putters were advertised on eBay for more than $1500, although they were actually cheapies worth less than a tenth of that. Cameron had noticed that the two stamps were missing and had an investigator put in a false bid. Slivnik and Stein fell into the trap. The two confessed. Assistant district attorney Steve Davis wanted a $10,000 fine for each and probation, but superior court judge William Mudd gave S&S informal probation and a $200 fine and made the caper a misdemeanor. Such a wrist slap is a disappointment, but in San Diego, the rich white-collar criminals don't even get that.
Here's something you might be interested in.
Sons of Scam
Sons of Scam
San Diego — The 3M Co. of St. Paul, Minnesota, is one of the world's best-managed companies. It is among the 30 blue chips making up the Dow Jones Industrial Average. It makes Scotch tape and thousands of other products in such areas as electronics, safety, telecommunications, graphic arts, and health care. It represents all the Midwestern virtues of hard work, modesty, ingenuousness and ingeniousness, and superior technological innovation.
Similarly, S&S Worldwide is a company in rural Colchester, Connecticut, that makes arts and crafts, school supplies, and religious products. Verily, it radiates New England rectitude. "Our purpose is to improve the social fabric by helping people play," says S&S.
San Diego has a 3M and an S&S, too. These -- er, uh -- creative enterprises represent all the characteristics of Southern California entrepreneurialism: disingenuousness, cozenage, hokey-pokey. Indeed, they are what California's postal designation, CA, may actually stand for: Con Artistry.
San Diego's 3M are Maradei-McPherson-Moran, telemarketing flimflammers with a long history of being pursued by federal government law enforcement, as well as enraged investors who have been fleeced.
On December 11, Mark Maradei pleaded guilty to federal tax evasion. In April of 2003, when he learned that there was a federal criminal grand jury probing Internet Web Services Co. (IWSC) and A2Z Shopping.com -- two companies at which he had worked alongside Robin McPherson and Steven Moran -- Maradei admitted that he had not paid federal income tax for several years. His maximum sentence is five years in the slammer.
McPherson is a fugitive, according to Denise Rubin, special agent in charge of the San Diego Internal Revenue Service Criminal Investigation office. In December of 2000, McPherson was convicted of tax evasion and conspiracy to defraud the United States for his role in Continental Wireless Cable and related companies, a telemarketing scam that skinned $10 million from investors before it was shut down by the Securities and Exchange Commission. McPherson never showed up for his sentencing in March of 2001 and hasn't been seen since.
McPherson's role as president of Continental Wireless dates back to the early 1990s. According to the county's intergovernmental Boiler Room Task Force, McPherson had earlier been in trouble for securities violations in California -- one reason, perhaps, why he also went by the alias of Robin Ribble. His "teletouts" promised investors 100 percent annual returns.
Maradei and Moran soon picked up the beat. In their telemarketing wireless cable scams, Knoxville LLC and TENEVA Impound Management, they promised 300 to 400 percent returns in two to four years. At that time, wireless cable telemarketing scams were so virulent that the Securities and Exchange Commission set up a task force to fight them. In a settlement in U.S. district court, Moran and Maradei were each ordered to shell out $1 million in disgorgement of ill-gotten gains and civil penalties.
Moran did some hard time on that one. When the bankruptcy trustee was searching for assets, Moran took the Fifth Amendment over the proceeds of a Mercedes-Benz he owned. An exasperated judge dispatched him to the pokey for contempt of court.
From there, Moran went into what was, for him, high finance: so-called mortgage foreclosure consulting. He and two soul mates, from an office in Rancho Bernardo, took up-front fees from desperate homeowners in default on their mortgages. Moran and crew promised that they would be able to renegotiate with the lenders. If the negotiations were unsuccessful, the up-front fees would be returned. But the despondent homeowners weren't helped and didn't get their money back, said the district attorney's office. Moran and his two colleagues pleaded guilty to deceitful practices, and Moran got three years of probation.
Then Maradei, Moran, and McPherson combined their expertise in securities scams with the Internet. In Maradei's plea agreement with the government, the 3M's Internet telemarketing/spam scam is spelled out in detail.
In 1997, Robin McPherson and two colleagues, Bryan and Robert Hertz, launched Internet Web Services (IWSC), an Internet service provider. Their telespielers and spammers pitched a double-deal: by plunking $10,000 to $80,000 in the pot, investors could set up an online shopping mall that the company would support. Those malls would sell name-brand merchandise through a drop-ship arrangement to be lined up with manufacturers. Also, the investors could buy shares. The stock would soon go public and zoom up 600 to 1000 percent in short order.
Soon, Moran came aboard. The company made numerous misrepresentations -- such as on the drop-ship arrangement, which didn't work -- according to the plea agreement. But as it plucked $6 million from investors' pockets, the company piled up huge debts, and the California Department of Corporations was on its tail. So it filed for bankruptcy, utilizing offshore trusts and corporations in the machinations.
Soon, a company called A2Z USA was born. It had essentially the same personnel and same modus operandi -- and heard even more intense screams from cuckolded investors whose online malls and stock were both worthless. Moran was president. McPherson disappeared to Canada to set up a Vancouver sales office. Moran considered him "radioactive," according to the plea agreement, because of his indictments in the U.S. Maradei was a hotshot salesman, reporting to Moran and McPherson.
British Columbia securities regulators closed up the operation there, naming McPherson, Moran, and Maradei in its actions. (Vancouver is a world center of hyper-speculation and fraud. Getting kicked out of Vancouver for humbuggery is like getting ousted from the John Birch Society for extremism.) But before it was all over, the A2Z scam snatched $12 million from investors, according to the Maradei plea agreement.
There are more shoes to drop as the grand jury's work continues. "IRS Criminal Investigation will continue to aggressively investigate telemarketers who solicit funds under fraudulent pretenses from the unsuspecting public, and then fail to report the profits they make," says Rubin.
Then there is San Diego's S&S. It was a golf caper. That's not surprising. North County is the center of the world's golf-equipment industry. And it's also the center of golf scams, such as the 90-day golf club telemarketing racket. Golfers are told that they can buy a set of clubs for $1500 or so, and if they aren't satisfied, they can return them in 90 days and get their money back. But after 90 days, the company won't return the funds, and it's too late to get money from the credit card company.
But San Diego's S&S, August L. Slivnik and Jeffrey C. Stein, tried a new one. Slivnik is the son of the owner of a machine shop that for years has done manufacturing for San Marcos's legendary Scotty Cameron, whose Pro Line putters are sold by Titleist. According to the district attorney's office, Slivnik swiped two stamps that bore Cameron's trademark.
Soon, phony Scotty Cameron Pro Line putters were advertised on eBay for more than $1500, although they were actually cheapies worth less than a tenth of that. Cameron had noticed that the two stamps were missing and had an investigator put in a false bid. Slivnik and Stein fell into the trap. The two confessed. Assistant district attorney Steve Davis wanted a $10,000 fine for each and probation, but superior court judge William Mudd gave S&S informal probation and a $200 fine and made the caper a misdemeanor. Such a wrist slap is a disappointment, but in San Diego, the rich white-collar criminals don't even get that.
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