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HJOE: Not the First Pump & Dump Scheme
Supported By A Celebrity Endorsement

Does a celebrity endorsement diminish the ultimate goal of a Pump & Dump scheme or change its inevitable destiny?  Not according to this history lesson.

June 7, 2015:  The myopic and those who believe in fairy tales are hanging their hat on Larry the Cable Guy's endorsement of Hangover Joe's Holding Corporation's (HJOE) energy shot product "Git-R-Done" as proof of the company's viability and management's forthrightness. These people could be just as likely to believe in Santa Claus, "the Great Pumpkin" or OJ's innocence. That's because HJOE's likelihood of success and any semblance of credibility are no more plausible than those other concoctions of imagination.

We've well-explained the all-too-real problems in Janice Shell's revealing report some week's back. It's worth noting that since that article was published and acknowledged by HJOE management, the company apparently hasn't felt duty bound to make up their delinquent filings.  Also, we were prophetic when on May 26, we made the following prognostication:
Let's now take a look at the history of just a few of the other stock fraud schemes supported by a celebrity endorsement.

   » Related: The HJOE Hangover

Genmed Holding Corporation (GENM)

GENM was purportedly a distributor of generic prescription drugs. Unfortunately all the company ever distributed was propaganda for an illicit scheme.  The face of this stock fraud was academy award nominated actor, Eric Roberts brother of Julia. Not only was he the star of a 4 minute infomercial for GENM, but the company shamelessly dropped his name into a dozen press releases between March and June 2011.  Roberts also made several television and radio appearances on behalf of GENM, and even mentioned the company during an interview on the popular television tabloid, "Access Hollywood".

What is especially suspicious is Roberts' admission that he is/was a GENM shareholder. Now we're not saying that Roberts knew that he was the front for a stock fraud, but we wonder whether the twitch in his left arm and hand visible throughout the video was just a case of nerves one wouldn't expect from an accomplished actor or a reaction to the enormity of the bullshit he was spewing.

Sherman Mazur
Things did not end well for GENM shareholders.  Long after the company abruptly stopped issuing press release in September 2011 and the duped came to their epiphany, a grand jury indicted the perpetrators of this fraud and others that were led by recidivist criminal Sheman Mazur.

Frogads,Inc (FROG)

FROG was ready to have the world believe it was going to be a viable alternative to Craigslist, if not put the world's number one online classified ad site out of business altogether. The enormity of that claim alone should have been enough to send prospective bag holders running for the hills, but those who believe in moonbeams and unicorns were seduced by the addition of Pamela Anderson as a celebrity endorser of the site.  Ms. Anderson, who was reportedly paid $100,000 as an endorser, was even the spokesperson in a 30 second spot shown a few times on television. Rather a genuine commercial spot for the Frogads service, it was, in reality, a not-so-veiled pump of the FROG ticker.

Julian Spitari with Pamela Anderson
At the end of the day, FROG was suspended from trading by the SEC after the indictment of the masterminds of this scheme and others, including company CEO Julian Spitari, who collectively realized $7 million from the sale of shares. The indictment was a twin of the Mazur indictment and in fact, Mazur has been thought to be complicit in the FROG scheme as well.

While there is no evidence that points to Anderson's knowledge of a Pump & Dump scheme, the least sophisticated person would have been suspicious of the nature of the script and at a minimum run it by a lawyer. Bells should have been ringing in someone's head. Or maybe that was the problem and she couldn't think because of them.

Needless to say, FROG shares are now and forever completely worthless.

As Seen On TV, Inc. (ASTV) (HNHI)

HNHI, a direct response company, was shamelessly promoted by rap mogul Curtis J. Jackson III, commonly known as "50 Cent", despite the fact that the company was sporting a quarterly operating loss of over a million dollars. The popular rapper was tweeting like crazy, pumping the stock with promises of "looking out for ya" and "If you get in technically I work for you. BIG MONEY." He later deleted his original tweets and the tweeted: "I own HNHI stock. Thoughts on it are my opinion. Talk to financial adviser about it." But by then the desired effect had been realized.

50 Cent bought his stock in HNHI on November 30, 2010, a week after it offered 180 million shares at 17 cents. It is staggering to consider how much money he made on these shares. How he has escaped indictment is just as staggering.

While shares were successfully pumped up to well over a dollar from about 10 cents, the stock price followed the law of gravity and returned to its previous levels within a few months. Then shareholders were served the final indignation, as they were wiped out by a one for 20 reverse split that accompanied the company's name and ticker change.

50 Cent
50 Cent's prominence within the company came and went with equal abruptness. What was initially heralded as a joint effort to capture a share of the mobile audio headphone/earbud market (think Dr. Dre's "Beats") was dropped from the conversation in late 2012, although SMS Audio thrived with no obvious benefit to ASTV/HNHI.

Shares of ASTV are now lightly traded, ranging between 1 and 4 cents post split, a tiny fraction of where they were trading during the height of the 50 Cent pump.

Gazoo Energy Group, Inc. (GAZU)

Back in 2010, GAZU was one of many "green energy" sector plays. Pretending to be involved in "green energy" was a popular theme among the Pump & Dump crowd before attention turned to the more lucrative medical marijuana schemes. GAZU claimed to be acquiring other so-called green companies and touted something called a "power optimizer" before offering energy audit services, whatever they may be.

Chip Hackley
The scheme was the brainchild of Chip Hackley, a self-professed capital management type who has seemingly disappeared from the business scene, suggesting that he might have cashed in plenty of "chips" emblazoned with the GAZU logo.

What was truly incredible was that Hackley was able to con former basketball star A.C. Green into this stock fraud. Green, who is generally considered to be a saavy businessman, allowed his name to be used in promotion of GAZU stock and even made appearances on behalf of the company on MoneyTV, an online program dedicated to Pump & Dump schemes, hosted and produced by stock pimp Donald Baillargeon.

The jig was up for GAZU before the end of 2010 when the company went quiet. Shares are now worthless and the SEC has revoked the company's registration.

The moral

These are just a few of the many Pump & Dump schemes bolstered by a celebrity endorsement of one kind or another. There are several more including those supported by the names of uber stars Justin Bieber, Shaquille O'Neal, Suge Knight, and Carmen Electra, all of which have seen investors bilked of their money as shares have ended up worthless.  Similarly, Larry the Cable Guy may be able to help hawk a few boxes of an energy drink, but those who believe that their future financial security guaranteed by the ability of his name to boost HJOE's share price to sky high levels are simply star struck.