It’s been particularly quiet on the Infotopia, Inc. front. The Company, which used to churn out a steady stream of self-congratulatory press releases, has been silent of late. But there has been other news that should interest the Company, and its investors. Since becoming public, Infotopia has issued millions of shares of registered stock to consultants and attorneys. For the most part, the Company’s public filings have offered few details about those consultants or the services they were to provide. Take, for example, Herbert Jacobi, who received registered stock for providing unspecified “legal consulting” services to Infotopia. Herbert Jacobi who also received registered “consulting” shares from Bach-Hauser, Inc, another penny stock company featured in our investigative reports. (See Infotopia, Inc. Part III – Bye Bye Shares; Bach-Hauser, Inc. – A Haus Full of Consultants; Bach-Hauser, Inc. – Everyone Makes Misteaks; and Update: Bach-Hauser, Inc. – The First Thing We Do, Let’s Give Stock To All The Lawyers). Who is Mr. Jacobi? Here’s the latest.
On October 17th, Herbert Jacobi, a New York attorney, pleaded guilty to charges that he conspired to receive stolen FBI records and made false statements to FBI investigators. Mr. Jacobi, who faces a maximum jail term of five years on each of the two counts, has agreed to resign from the New York Bar and withdraw from the practice of law.
According to the charges, Mr. Jacobi, and his former client Robert Potter, schemed to obtain the stolen FBI records from a private investigator who received that information from James J. Hill, a former employee at the FBI Las Vegas office. The complaint charges that the investigator was instructed by Potter to give that information directly to Mr. Jacobi. At the time, Potter had already been charged with securities fraud in the Southern District of New York and was the target of a grand jury proceeding in Nevada.
There was a big problem looming for Jacobi and Potter. That private investigator was actually a confidential informant for the government. On June 16, 2001 the FBI taped Jacobi receiving a simulated FBI report from the private investigator. As the tape rolled, and agents watched, Mr. Jacobi reviewed the report, paid for it, and promised to help the investigator get paid for other stolen FBI records that had previously been provided to Potter. When the FBI later questioned him about the stolen documents, Jacobi falsely claimed he had received them through the mail from an unknown source.
Both Potter and Jacobi have now pleaded guilty to the charges.
Back to our initial question. Is this the same Herbert Jacobi who received registered shares of stock from Infotopia and Bach-Hauser? If so, what “consulting” or legal services did he provide to those companies? They never have been specific on that score.
Bach Hauser has proven to be a particularly active “client” for Jacobi. Between May and November 2000 he was issued more than 2 million registered shares of Bach Hauser stock. That was before he faced federal charges. Then, on September 20, 2001 Bach-Hauser filed a Form S-8 to register another 500,000 shares of stock for Jacobi. The S-8 claims that “Jacobi has acted and will continue to act as legal counsel to the Company.” It will be impossible for Mr. Jacobi to fulfill that commitment, since he can no longer practice law. We wonder whether he plans to return the shares.
There’s an even more troubling aspect to this latest “legal consulting” agreement. Jacobi was first charged with the theft of FBI records, and other federal crimes, on June 27th, almost three months before this S-8 was filed. The information was made public at the time in a press release issued by the United States Attorney’s Office and the FBI. Was Bach-Hauser unaware that one of their attorneys was under indictment?
The September 20th Form S-8 contained an opinion letter issued by the Las Vegas, Nevada law firm of Chapman & Flanagan. The name partners in that firm, Daniel Chapman and Sean Flanagan have also received registered stock – more than 4 million shares in total - in Infotopia and Bach-Hauser (as well as registered shares of Hydro-Environmental Resources, Inc., another Company featured in our Stock or Schlock department. See Hydro Environmental Resources, Part I – A HYER Calling; and Part II, Westward Ho Hydro). Just what is the relationship between Mr. Jacobi and that law firm? Both the September 20th Bach-Hauser S-8 and a recent Form S-8 filing by Hydro Environmental Resources (which included shares being registered for Messrs. Chapman and Flanagan) list Herbert M. Jacobi as one of the attorneys associated with Chapman & Flanagan.
Viva Las Vegas.
Tomorrow we look at another Infotopia consultant who is now facing criminal charges.
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