SEC Fraud Fun Time

One of these other companies mentioned on this oddball container is a financial institution in Chicago called North South Capital (NSC). This institution has on its advisory board, a gentleman who claims to have been a board member of another company, Universal Travel Group (a chinesse based comapny). UTG was recently indicted by the SEC .gov website, you've been warned. The suit alleges that these practices took place between 2008 and march of 2011 (dates important):
* Creating non-existent or fictitious shell companies as customers with no verifiable revenue
* Creating fictitious shell companies as Suppliers with no verifiable revenue
* Making fictitious buyout offers
* Using companies cash to secure the debt of companies privately owned by insiders,
* Posting fake cash and fake revenue in their financial statements
* Indulges in insider trading that is never disclosed
* Indulges in pump and dump schemes
* Stealing company's assets by transferring it to insiders leaving the shareholders with empty shell company owning no asset
* Shipping Auditors must examine, on a test basis, whether a company they audit (the "Audited Company") genuinely sold goods, purchased supplies, received cash, paid out cash, or had cash on hand. (Generally Accepted Auditing Standard ("GAAS") No. 3.) Sometimes, the USA Based Auditor does not act independently of these Chinese companies and actually do not rigorously verify all these things and in most cases forge audit documentations for these Chinese firms by creating the financial statements for them

Now make sure that last one sank in: the inspectors whose job it was to ensure that goods actually traded hands were bought off. Keep that in the back of your mind as you read on.

So the funny thing is, the guy at NSC with ties to UTG- we can't actually find any evidence that he was actually a board member there, outside of his own testimonial/bio blurb. So why say you're working with/for a company that has no record of you working there? Why leave a blurb about working for a company indicted by the SEC, your governing regulatory agency, when you never did work there? I know I'd want to distance myself from a sinking company I never worked for best I could.

Well, the SEC indictment was in 2013, and the NSC website was last updated in 2013. The SEC has regulatory filings (current as of 2014) indicating 3 Executives/Control Persons and 13 people as board members of this IL based company. Their now not-updated-since-2013 website lists 4 principles/management and only 2 board members. So clearly they're still 'open for business' in so much as they made SEC regulatory filings last year, as indicated by the BrightScope website, but there's some wild discrepancy between who they're saying is working there and who they're telling regulators are working there.

Theory: once the SEC indictment was levied, these people got scared and ceased operating out of this particular shell company and moved themselves & friends across various board member positions of other shells This would indicate they're still operating and shifty. The SEC indictment only implicates a chinese based company, not a US based one. Well, if you're working on a scam like UTG was, the only thing these IL lads need is freight forwarding company or major importer in on the scam, to help facilitate dummy transactions. What was that about 16,000lbs of cheap plastic crap and balls?

So, we turn our attention to (cue dramatic music), Fun Stuff Inc. Corporate filings indicate a lawyer in Hampton Va acting as a proxy agent for this company. Not unheard of, but wait, there's more! This lawyer and his firm is also acting proxy for 194 other companies, all proxied at the same address. Again though, not out of the realm of possibility for a lawyer. But... aspies get bored. I dug into this lawyer last night, and reddit purged my notes, so this is a very rough outline of how I remember it, because lawyers and bankers never make anything easy, and the one thing I remember above all else, was that Benny is a dick.

So, let's look a little at Benny. I can first find him mentioned by name as a partner in a suit in 1981 so clearly on the level and practicing, and I know it's him cause the guy is in his 70's right now... 77 if memory serves. There's a former employee whose linkedin profile indicating this firm was still operating up until at least 1991.

This specific firm, WSW&S, is orgonaized under the same state ID 3 times total. The firm is reorganized the first time from 4 partners to 2 sometime in the early 90's. Electronic records starting in 95 indicate the firm operating under the 2-partner. However, look again at this It still names WSW&S as acting as agent of proxy on Fun Stuff documentation, despit it clearly having been dissolved and no longer an operating company, at least not under it's old, or any relevant/legit VA registration. Now admittedly, I don't know this type of business structure, but I'm not entirely sure of the legality of this bit alone. Simply that I think it's illegal ala some misrepresentation thing. Or, maybe, they were trying to intentionally obfuscate their own records for liability in regards to that company?

Anyway, enough fear mongering, WSW&S is on paperwork all the way through to 2007 In 2008 this 2-person firm and ID is reorganized again and Conroy tells Benny to eat it, and walks off into the sunset.

Benny the dick starts a new chapter in his life. He opens a firm with his brother and in '08, for the first time since it was origonally incorpoarated in 1992, Fun Stuff is represetned by a new law firm, by proxy of course.

Here's where it gets really damn interesting
In 2011 documentation shows that Benny the dick is now acting as sole agent of proxy for Fun Stuff, no longer going through his firm. So while it's not out of the realm of possibility for a law firm to act as agent of proxy for 194 companies, it is odd that a lawyer would single out 1 of those companies to act as sole agent of proxy not through his own law firm. It wouldn't be so odd if this business being represented picked up an ex-defense-contractor as a sales executive one month before this switch in representation happened. Yes, Soup was hired in 10/2011 and Benny the dick solely represented the company a month later.

So, let's play a quick game of 'what if'... Soup is brought onto his new job and sitting around at happy hour one night telling his new bosses of the neat times he had selling "operational gear" to "any uniform" at his last job. This father and son team meet up for dinner the next night and talk. "Hey dad, I was thinking... You know those phoney shipments we've been working with those IL guys running with the chinese? Well, since that kinda petered out in the spring and we already know inspectors to pay off, maybe Soup can get us some more lucrative product back in some dummy shipments?" The dad looks over to Jay and says "Son, I have never been more happy to have you working next to me than this moment right now. Let's get fucking rich!" They talk to Soup to set up the connects, they take a meeting with Benny the dick, Benny distances his business best he can form any potential fallout and they start going into business together. Now, that they have guns, they gotta sell 'em, and the street pays the best premiums. Over the years they slowly work further and further west exhausting contacts until they meet one guy running his own drug operation. He happens to have a daycare as a front operation. What was that about 16,000lbs of cheap plastic crap and soccerballs?

All it takes is to connect Fun Stuff or Benny the dick to a financial company in IL and that little game of what if just became a lot more interesting. What was that about 194 companies?

194 COMPANIES: http://www.bizapedia.com/addresses/724-THIMBLE-SHOALS-BLVD-STE-100-NEWPORT-NEWS-VA-23606.html

SEC: http://www.sec.gov/litigation/litreleases/2013/lr22823.htm