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The Big Man Behind The GRILLiT (GRLT) Scam

December 15, 2013: You can't get a much bigger scam than when one scammer sues the other scammer for scamming him out of his scammed profits. That's is apparently what has happened with GRILLiT, Inc (GRLT).

The Big Man Behind The GRILLiT Scam
It appears that long time Pumper & Dumper, Christopher "Kit" Chambers, he of the now defunct Evolution Fuels and Evolution Resources capers, is dissatisfied with the proverbial taste of his own medicine. On September 11, Chambers' Ravenwood Holdings, LLC filed a lawsuit in Texas Court, alleging fraud, against the man that is really running the GRLT show, reiterative penny stock schemer, the portly Adi Elfenbein, and his OTC Holdings, LLC.

Christopher "Kit" Chambers
According to the complaint, Ravenwood and OTC Holdings formed a third entity in Colorado, also named as defendant in the lawsuit, called OTC Capital Partners, LLC, whose sole purpose, as per the partnership agreement attached as an exhibit to the complaint, was to divvy up the proceeds from stock sales during the GRLT Pump & Dump campaigns. OTC Holdings/Elfenbein were to contribute all shares in GRLT held by them currently and in the future to the partnership. It is unclear what Ravenwood/Chambers was to contribute, as the partnership agreement only states that upon consummation of the share exchange agreement between GRLT and Healthy and Tasty Ventures, LLC, then the parent of the GRILLiT restaurants, Ravenwood would have fully earned its 23% ownership of OTC Capital Partners. OTC Holdings, LLC owns the remaining 77% of the partnership. We believe that Ravenwood earned its share by providing the actual hard cash used to fund the restaurants.

The complaint reveals that the percentages to which each partner was entitled of the funds extracted through the sale of GRLT shares in the market, was represented by each member's ownership of the partnership. In other words, Chambers was to receive 23% of the money.  It was up to both partners to maintain separate bank and brokerage accounts in the name of OTC Capital Partners, but supply log in information to the other partner. Then, the partners were to sell stock from these separate accounts, place the money into the various bank accounts, and split up the money according to the set ratios.

The problem is that Chambers forgot that you cannot trust a scammer not to scam his partner, something he should have been wary about, being a scammer himself.

The complaint claims that Elfenbein breached the partnership agreement in that he never provided Chambers with the log in credentials for the accounts that he established, nor did he divide up the proceeds from shares of GRLT that he sold. Ravenwood says OTC Capital Partners has refused to refund its investment, account for share proceeds, and claims that by failing to deposit its investment stake in a mutual bank account, Elfenbein was unjustly enriched. Shocking!

The interesting statement made within the complaint was, "Plaintiff Ravenwood was alerted to the sale and/or trade of stock in August of 2013". Wait a second. August? That is when the original Pump & Dump campaign was launched! And the fact that Elfenbein was selling stock when GRLT was generously offering the four share dividend as an inducement for buying its shares, not only proves that Elfenbein perpetrated the Pump & Dump campaign, but that the dividend is doomed to be worthless to the beneficiaries, much as we warned in our alert, back when the dividend was first announced.  Secondly, Ravenwood was not "alerted" to anything, as Kit Chambers knew that Elfenbein would be selling stock in August, because the first Pump & Dump campaign was planned for then. Chambers deduced that Elfenbein was selling stock because he held almost all of the free-trading stock and the sales were evident by the volume.

Where Chambers should have known he was in trouble was when Elfenbein agreed to this statement under the Initial Contributions Paragraph of the partnership agreement:
"Any, current ownership by OTC Holdings, LLC, or its affiliates, of' equity, (common or preferred stock) of' GRILLiT, Inc., a Nevada Corporation, shall immediately be contributed to the Company. Any future receipt of equity of GRILLiT, Inc. by OTC Holdings, LLC or its affiliates, shall immediately be contributed to the Company."
Adi Elfenbein
Had Chambers done any sort of due diligence, he would have realized that Elfenbein was never going to give anybody more than a temporary hold onto his cash cow, the GRLT shell itself.  Not to Chambers, not to Healthy and Tasty Ventures, and not to Ghazi Hajj, the founder and the operational brains behind GRILLiT. Eventually, Hajj will come to the conclusion that he has been taken by Elfenbein and Chambers, perhaps to the detriment of his very real restaurants. As soon as Elfenbein has played out the GRLT scam for all it is worth, he will execute his pre-planned exit strategy, which includes ending all funding efforts. In the most likely of scenarios, Elfenbein will be able to regain majority ownership of the GRLT shell by converting what is sure to become unmanageable debt into stock. Then he will be free to reinvent the shell into the next scam, under a Wash Rinse, Repeat formula we illustrate within an article from our Pumps & Dump 101 series,  Does A Promotion Mean The Company Is A Fake?  Elfenbein has already done this with the GRLT shell once before, when it was known as Green Equity Holdings, Inc (CXTO). He was able to wrest control of the shell through a Convertible Promissory Note signed by associate, Raimundo Dias, then the President of Green Equity Holdings. Dias remains a director of GRLT, likely strengthening Elfenbein's continued control of the shell. Even more interesting is that Green Equity Holdings continues to be an active corporation, identifying none other than Adi Elfenbein as its sole officer and director.

Something else that we find suspicious is that Elfenbein funded the Green Equity Holdings convertible note through another company of his, also named OTC Capital Partners, LLC.  We find that there is such a company registered in Florida and identifying Adi Elfenbein as its sole member. It looks to be more than just a coincidence that Elfenbein is involved with two companies with the same name, but registered in different States. We suspect that Elfenbein had planned all along to scam Chambers for the proceeds and used the similarly named company to sell shares intended for the partnership, but through accounts benefiting only himself.

The promissory note(s) which will eventually give back control of GRLT to Elfenbein appear to be in place, according to the latest financials filed by the company:
"As of November 20, 2013 the Company has a series of convertible promissory notes payable to various parties in the total amount of $194,043.88."
We expect that note to eventually be converted to common stock at less than a penny a share, providing more than enough shares for a shift in control.

Investors should be wary of a company run behind the scenes by such a schemer, while keeping in mind that two money losing restaurants with quarterly revenues of $200K do not make a chain. At it's current valuation of $46 million, the company is trading at 123 times its asset value. In comparison, McDonalds trades at 2.6 times its asset value. Ghazi Hajj needs to come to the conclusion that Adi Elfenbein is not the shining white knight he thinks he is, and that by the time his shares will be saleable, they will be worthless. It's a fact learned by many of the Ghazi Hajj's of the world.