Oh those consultants. It seems like only yesterday (it was) that we wrote about Herbert Jacobi, the New York lawyer who recently pled guilty to federal charges that included conspiracy to obtain stolen FBI records from a private investigator in Nevada (See Demise of a Consultant). As we noted at the time, Mr. Jacobi received hundreds of thousands of shares of registered stock as a “legal consultant” to Infotopia, Inc. and Bach-Hauser, Inc. – two companies that have been featured in detailed investigative reports by Stock Patrol. (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.
OIt seems that Mr. Jacobi had a relationship with the Las Vegas, Nevada law firm of Chapman and Flanagan, whose name partners, Daniel Chapman and Sean Flanagan also received hundreds of thousands of registered shares of stock as “legal consultants” to Infotopia, Bach-Hauser, and Hydro Environmental Resources, Inc., another company featured in our investigative reports. (See Hydro Environmental Resources, Part I – A HYER Calling; and Part II, Westward Ho Hydro).
Maybe Mr. Jacobi just has an affinity for Nevada – both Infotopia and Bach-Hauser are incorporated there as well.
As it turns out, Mr. Jacobi isn’t the only familiar name in the news these days. Another “consultant” to Infotopia was an attorney named Alan Berkun. Like Mr. Jacobi, and a host of others, Mr. Berkun received registered shares of Infotopia stock in exchange for vague consulting services. Berkun also received registered stock as a consultant to Far East Ventures, Inc. (subsequently known as Nico Telecom, Inc.). (See Far East Ventures, Part II – Black, White and Lots of Gray and; Part III – Consultants to Spare).
Now Mr. Berkun has been indicted and charged with participating in a massive stock fraud scheme. On October 18th, the United States Attorney for the Eastern District of New York, the New York State Attorney General and the FBI, unsealed an indictment charging that Mr. Berkun, and 24 other defendants, used two corrupt brokerage firms (Preston Langley Asset Management and Stockton Equities Group) to manipulate trading in the securities of at least two public companies, Americom Networks International, Inc. and Global Eco-Logical Services, Inc.
According to the indictment, Berkun and others acquired secret control over large blocks of stock in the two companies for little consideration, artificially inflated the price of that stock, and then dumped their shares on customers at Preston Langley and Stockton Equities. Berkun is also charged with laundering millions of dollars through various domestic and foreign bank accounts. Prosecutors charge that hundreds of investors lost over $100 million as a result of the scheme. Related proceedings, filed on October 18th by the Securities & Exchange Commission, allege that Berkun, as a control person of Preston Langley, manipulated stock prices and maintained nominee accounts in violation of federal securities laws.
Could this be the same Alan Berkun who controlled hundreds of thousands of shares of Infotopia, and Far East Ventures? The criminal indictment lists his address at 83 Arnold Court, Far Rockaway, New York. An S-8 filed by Infotopia on May 23, 2000 gave that same address for Alan Berkun, Esq. That S-8 was filed by the law firm of Chapman & Flanagan.
Are investors paying attention?
Tomorrow we look at a pending civil lawsuit against Infotopia and its corporate lawyers.
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