Ordinarily, we would leave the subject of an SEC action alone as there is little the perpetrators can do to further the scam. In this case, however, the quarterly report that Parilla issued following the suspension was so preposterous and rife with fraud that we felt that we had to publicly answer the several emails we received seeking answers. With trading of FRTD shares set to resume on the grey market Monday, let's take a look at the deception that put the company and its shareholders in this pickle.
The FRTD, GMNI, HNET, Data Capital and ProCap Orgy
Back in October 2013, Parilla announced the acquisition of ProCap Funding, Inc., then a subsidiary of Hull Energy (HULL), soon to be known as Gemini Group Global Corp (GMNI) As the press release notes, ProCap was headed by Alexandre Scheer. ProCap was originally said to be a Seychelles company, but in reality it was formed in Delaware July 2013. Its website is currently "being updated." The deal had still not been finalized by 30 April 2014, when Parilla informed his shareholders that it had been "modified" to become a partnership. Alexandre Scheer is, a medical doctor who was disciplined by the New York State Board of Professional Medical Conduct for forging another physician's name to a prescription for Adderall. He's also being sued by Geico for submitting fraudulent no-fault insurance charges.
|Dr. Alexandre Scheer|
Another Nail in FRTD's Coffin
<click to enlarge>
A check of the WhoIs record for EviteXchange.com show's that the domain was registered on May 23, 2013 by DMS Global. A look at EviteXchange.com's About Us page, shows us that "eViteXCHANGE.com is a wholly owned product of New York based Data Capital Corp."
We've already talked about Scheer's connections to FRTD and Data Capital Corp, so basically all we are talking about is FRTD acquiring an entity it was already connected to. That is further evidenced in the next paragraph of the About Us page:
"Data Capital Corp was formed when a few of the founding members of ThePUMPTracker.com teamed up with a New York physician and founder of Docturs.com, to launch TheDATABanc.com."The New York physician is undoubtedly Alexander Scheer who was also the founder of Docturs.com, as shown by that company's Twitter feed. The association with ThePumpTracker.com is interesting on its own, as we shall see in a minute.
|EviteXchange.com's "About Us" Page <click to enlarge>|
|Docturs.com's Twitter Feed <click to enlarge>|
|The Data Banc Has A Hand In Pumping Parent Companies FRTD and GMNI (then HULL)|
|WallStreetMarketWire.com <click to enlarge>|
For at least the second and third times, FRTD neglected to mention that it was pumping its own shares.
The Acquisition That Brought The House of Cards Down
On of Parilla's many methods of deception is to talk in generalities rather than provide details of whatever "wonderful" developments he feeds to his marks, like pellets to mice. His announcements are devoid of any accountability or the ability to confirm. He does this over and over again in an obvious attempt to boost interest in FRTD shares.. Cases in point:
(a) In an April 21, 2014 press release, Parilla announces that FRTD has received an order for $249,000 worth of Affinity Black Cards. The name of the purchaser is not released but the press release contradicts itself by further stating that the order is in the "final stages of the contract process". Well excuse us, but if there is no contract, how can there be an order? The PR goes on to state that 50% of the cash is to be received no later than May 1, 2014. May 1st comes and goes with no further word of this deal. We don't know if it still exists or the company has received the cash.
(b) On April 25, 2014, Parilla announced that FRTD purchased 8.5% of its own public float. The press release goes on to say 27,550,000 shares of the 305,174,925 shares (8.5%) held by Cede & Co. This is nonsensical. Just 28 days earlier, FRTD reported the float to be just 156,915,067 shares.
(c) On April 28, 2014, Parilla issued yet another press release, this time announcing that the company has retired 185 million of its shares. At that time, Parilla pegged the number of shares issued and outstanding at 899,322,304. But as of March 31, 2014, the company reported having only 623,479,028 shares out. 275,843.276 shares were created, a 44% increase in the number of shares in just two months. Then Parilla trumpeted the retirement of 67% of those brand new shares. Why create them in the first place? Of course the sleight-of-hand nicely draws the investor away from the fact that even with the retirement, there is still 15% more shares that there were 8 weeks earlier.
(d) In that same April 28th press release, Parilla announced that shareholders will be entitled to a bonus share of Affinity Mediaworks (AFFW), an assetless shell, for every 92 shares of FRTD that they own. Nowhere is there any disclosure as to why FRTD shareholders should be entitled to this worthless bonanza or how FRTD came to own this stock. Neither is the transaction referenced in AFFW's filings, the most recent being the annual 10-K, filed on March 7, 2014, for the fiscal year ended January 31, 2014.
(e) On May 1, 2014, Parilla announced the acquisition of a "Well-Known Internet Financial Internet Property". The identity of the property is not revealed because as Parilla puts it, "Under the terms of the agreement, the name of the acquired financial site will not be disclosed until the domain has been successfully transferred to Fortitude. This transfer is normally concluded in 2-4 weeks." This is an out and out lie. It takes hours to transfer ownership of a domain name, not 2 - 4 weeks. We are soon to discover why the identity of the site is kept from the public. Parilla trumpets that the value in the acquisition is the 1.6 million opt-in subscribers, which he will later value at $38 million. Purportedly, almost 400,000 of these subscribers are accredited investors. After a review of the recently filed quarterly report, this fraud is enough for us to label Thomas Parilla a liar.
(f) On May 18, 2014, Parilla's pièce de résistance is his announcement that FRTD is to be acquired for $.12/share. The identity of the suitor is, of course, not revealed. This could be the straw that broke the SEC's back.
There is a lot more we could review, but the few examples of Parilla's deception and obfuscation of the facts we discussed here are certainly enough to justify the SEC's opinion, "that the public interest and the protection of investors require a suspension of trading in the securities..." Bravo! Heck, even when he announced that he hired a new law firm he wouldn't disclose who that firm was, even though Parilla implied that the engagement of the firm was in an effort to bring transparency to the company. Oh the irony!
Now Parilla has problems. He figures, "OK, the SEC wants disclosure, I'll give them disclosure!" He hastily slaps together a quarterly report ,which was filed on May 26th, and is among the worst examples of accountability we've ever seen. We'll gloss over the fact that his numbers don't add up when determining the number of shares issued and outstanding, or anything else for that matter. The glaring fraud is found in the details of that "financial internet property.
Michael Osborn's Linked In Profile <click to enlarge>
Osborn created ThePumpTracker in late 2012 as one of many sites he developed under his DMS Global Media umbrella, the same company which was involved in the formation of Data Capital Corp and was the registrant of the domain EviteXchange.com. The PumpTracker's website was dormant for most of the second half of 2013 and into 2014.
The claim or misleading implication that the ThePumpTracker has amassed over 1.6 million opt-in subscribers is an out and out fabrication. Perhaps it has purchased email addresses to add to its contact database, but there is no way that 1.6 million people have directly subscribed to that site. Even Awesome Penny Stocks, which is known to have purchased every email list known to man, never claimed more than one million subscribers. But let's look at the evidence. The company's Alexa rating on May 28, 2014 was 366,148, meaning that is where the site ranks among the world's busiest websites.
|ThePumpTracker's Alexa Ranking|
|PumpsAndDumps Alexa Ranking|
The question that any reasonable person should be asking is, why was this so-called $38 million asset available for nothing?
Further evidence of the conversion of the $125,000 debt to shares is found in the quarterly report, which states that 25,000,000 shares were issued during the first quarter of 2014 for debt conversion. Let's see. 25,000,000 shares for $125,000 works out to $.005/share. Sounds about right, doesn't it? And if our theory about quick divestiture is correct... well shares got up to almost 8 cents just two weeks later, offering a chance for some nice quick profits.
|The Pump Track March 21, 2014|
|The Pump Tracker April 16, 2014|
|Don't Get Ripped Off By Other Promoters! Buy Our Stock!|
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Our recommendation to bag holders? Forget it! You've already lost! When trading in the stock resumes, the share price is going to go down the toilet quickly. There are no assets valued at $38 million. There will be no acquisition of the company no matter what tripe Parilla continues to spew. Any attempt to merge into a public entity will surely be headed off at the pass by the SEC and FINRA.
There will be continuing investigations of the incestous relationships between FRTD, GMNI, HNET, Data Capital Corp., ProCap Funding, Inc., DMS Global Media, Thomas Parilla, Alexandre Scheer and Michael Osborn, perhaps leading to litigation or criminal prosecution, almost certainly against Scheer and very possibly for Parilla and Osborn. For the shareholders, though, this game is over.