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The Amwest Imaging Debacle:
What Did The Insiders Know?

George Sharp Says That The Insiders Knew The Press Release Was Coming

December 11, 2011: According to self-styled whistle blower, George Sharp, whose December 8th press release is currently the talk of the penny stock market, Amwest Imaging, Inc. (AMWI) insiders knew for at least 6 days that his press release was forthcoming.

In Friday's second entry into his blog, Sharp posts the content of an email he sent to AMWI corporate counsel, Ron Stauber, and the Amwest Imaging general email box.  According to Sharp, attached to that email was a draft version of the eventual press release.  Sharp then posts AMWI President Jason Gerteisen's December 10th response to his email.  Sharp claims (accurately it would seem) that Gerteisen didn't dispute anything the press release said, save for Gerteisen's false claim that AMWI never had offices in Beverly Hills.  That lie, is easily refuted by simply accessing the company's own SEC filings which clearly shows that AMWI shared an address with actual Sharp target, Writers' Group Film Corp (WRIT), a third Phil Keuber scheme, Pepper Rock Resources (PEPR); and, other public company's who have been the subject of Pump & Dump schemes, including Jammin Java Corp (JAMN).

Gerteisen, Stauber, et al. had to know that Sharp was serious about disseminating the press release because the references to AMWI came in conjunction with the actual subject of the press release, namely WRIT, and Sharp's ongoing litigation with that company is no secret.  Furthermore, AMWI counsel Stauber, is also the corporate counsel for WRIT, as Gerteisen acknowledges in his own email to Sharp.  So in spite of the fact that Gerteisen, Stauber, et al, knew unequivocally that Sharp would disseminate that press release and that the share price would suffer because of it, they allowed the ferocious paid pumping of the stock to continue without factually disputing anything Sharp said.  At a minimum, had they been forthright and truly concerned with the welfare of their shareholders, the insiders of AMWI had a duty to inform the public that they had been warned that allegations, that they may or may not dispute, were forthcoming.

But of course advance warning of the pending disaster would have only been adverse to the insiders' own goals, which was to dump as much stock onto the street as possible.  Instead of slowing down the pump, they sped it up because they knew that once Sharp's allegations became public, they would be competing for the exits with the dupes who had bought into the scheme.

Don't forget that prior to the start of of the promotional campaign, the insiders owned every single share of the 535,600,000 shares issued and outstanding (post forward split) of AMWI.  Let's review:

Company founder and former President Patrick Moore owned 234,000,000 million of those shares, for which he paid $9,000 back in June of 2010. The next 104,000,000 shares were sold to 25 investors in order to bring up the number of share holders to the number required by the SEC. These 25 shareholders paid 1/26 of a penny per share for a total of $40,000.  Then just last August, in a move designed to make Patrick Moore seem distanced form the company, 28 year old Amway-style peddler, Jason Gerteisen took over as President. He was promptly issued 26 million shares of stock. Finally, 157,560,000 shares were issued to the shareholders of Instant Website Technology, Inc, in an acquisition designed to give AMWI the appearance of an asset.

A look at Instant Website Technology, Inc, cinched the AMWI Pump & Dump.  According to SEC filings, Instant Website is controlled by Phillip Keuber, a participant in several penny stocks schemes in the past, including previously profiled Pump & Dump scheme, WRIT. As we stated earlier, WRIT and AMWI shared the same Beverly Hills address, along with Keuber's many other penny stock frauds.

The market cap of this cashless, intrinsically assetless Ponzi-scheme reached $744 million just prior to dump facilitated by Sharp's press release.  At that time, Moore's initial 17 month old $9,000 investment was valued at over $325 million.  Golden boy Gerteisen, who had been President for 3 months, was suddenly worth $36.14 million and Keuber's sale of air, aka Instant Website Technology, benefited him to the tune of over $219 million.  Since there is no way to justify a market cap of even $1 million, never mind $744 million, does anybody want to say, with a straight face, that a Pump & Dump scheme was not afoot?

Incidentally and according to SEC filings, on December 8th, Gerteisen registered another 138,500,000 shares in his name, apparently received on December 7th, without reference as to why it was given to him.  Did he run out of stock already?  Or have the insiders collectively already sold so much stock that they were about to lose control of the company and needed to use their figurehead to maintain it?  At any rate, the newly issued stock had a value of $191 million prior to the crash and it's hard to imaging the Gerteisen had done anything in 3 months to earn that bonus.   We suspect that the latter scenario is true and the control position was in jeopardy.  Don't forget that the insiders knew that the Sharp press release was imminent and that they had little time to dump their stock onto the street.

As crusaders against stock market fraud ourselves, we stand behind Mr Sharp's decision to paint AMWI with the same brush as WRIT and believe that he has prevented the perpetrators of the AMWI fraud from further lining their pockets at the expense of gullible prey.  What we find unfortunate, with mixed feelings, is that Sharp waited as long as he did to disseminate his press release, as obviously an earlier warning would have prevented considerable loss.  And yet, he is not responsible for anybody's gullibility or neglect to investigate their own investment.  We sympathize with Sharp when he says that he felt obligated to give AMWI insiders every chance to refute his allegations and the responsibility he felt to confirm the facts.  Still, we wouldn't blame anybody for criticizing Sharp over his late heroics.  That having been said, we place the blame for investor losses entirely at the feet of the AMWI insiders and the group of touts for conducting this notorious Pump & Dump and also point an accusatory finger at AMWI and attorney Ron Stauber for allowing the scheme to continue without comment, even after the revelation of Sharp's press release.