Saturday 20 September 2014

The Linktone circular investment scam

MNC Media Investment Ltd (MIH.AX) is a criminal listed investment company that uses a maze of sham transactions with related parties to generate fraudulent results. Formerly known as Linktone (LTON), the company was delisted from NASDAQ in early 2014, purportedly to reduce the costs of SEC reporting obligations. Since Australia is vying to become an international center of fraud and money laundering, Linktone was naturally welcomed with open arms to the ASX. In September 2013, Linktone listed 24m CHESS Depositary Interests (CDIs) under the ticker LTL, corresponding to 240m ordinary shares. Being a revaluation fraud, Linktone CDIs did not actually trade on the ASX, but were merely set at a predetermined "market" price, legitimized and guaranteed by ASIC as unmanipulated. Incorporated in the Cayman Islands, MNC Media Investment conducts its purported business through dozens of interconnected subsidiaries in China, Hong Kong, British Virgin Islands and United Arab Emirates, all buying and selling themselves to each other.

MNC Media Investment has a long proud history of circular sham transactions between related parties. PT Media Nusantara Citra Tbk (MNCN), owned by PT Global Mediacom Tbk, bought 58% of MNC Media Investment in 2008, through its subsidiary MNC International Limited. In 2012, MNC International Limited sold its entire stake to Global Mediacom International Ltd, a wholly-owned subsidiary of the aforementioned PT Global Mediacom Tbk. Global Mediacom, described as "the largest and the only" integrated media group in Indonesia, sold MNC Media Investment to itself.

MNC Media Investment uses euphemistically named "short-term investments" to carry out its fraudulent circular investments, with such "short-term investments" ballooning on its balance sheet from $1m in 2006 to $89m in 2014. In 2010 MNC Media Investment bought $20m of secured notes from PT MNC Sky Vision, a subsidiary of PT Global Mediacom Tbk. In 2011, MNC Media Investment purchased 357m shares of PT Global Mediacom Tbk, which when sold in 2012 resulted in a $28m "profit" listed as "other operating income". MNC Media Investment used the proceeds to purchase 708m shares of PT Bhakti Investama, the holding company of PT Global Mediacom Tbk, 53m shares of PT Media Nusantara Citra Tbk and 65m shares of PT Sky Vision Tbk. These circular "investments" subsequently led to unrealized "profits". MNC Media Investment's cash flow from operations has been steadfastly negative, with $11.3m torched in 2010, $11.9m vaporized in 2011, $5.3m misappropriated in 2012 and $7.1m lost in 2013.

After several months of inactivity, the criminals decided to ramp MNC Media Investment in September 2014, doubling the "market" price in a straightline ramp on little volume.


According to ASIC, this is not a ramp and MNC Media Investment is not a circular investment scam. Instead, this is all a fabulous magic market mystery, and any granny investor that loses money in such a scam has no recourse to the law, but only themselves to blame.

Saturday 13 September 2014

Conman Michael "Mick" Featherstone under investigation

Michael "Mick" Featherstone is a corrupt former Gold Coast police officer and self-confessed criminal, who with impunity has run various fraud schemes for decades. A dirty cop, Featherstone was suspected of planting drugs on suspects, stealing confiscated cash and forming alliances with bikie gangs. Despite (or perhaps because of) this he rose through the ranks of the rancid Gold Coast police force, at one point heading the Surfers Paradise Criminal Investigation Branch. Questioned by the 1997 Carter corruption inquiry regarding police involvement in the drug trade, Michael Featherstone was allowed to retire from the police force at age 33. Featherstone then started running cold-calling fraud schemes, protected by his links within the police force.

Featherstone is involved with a myriad of boiler room pyramid schemes, dodgy gambling syndicates, predictive software scams and other "investments", stealing millions of dollar from the gullible. After this blog detailed how Featherstone associates were listing a circular investment scam on the ASX (with ASIC's blessing of course), Featherstone started bombarding Google with take-down requests. In Australia, the criminals decide what information you are allowed to access, so the blog posts were blocked for Australian readers. This censorship can be bypassed by adding "/ncr" to bypass the automatic country redirect, allowing Australians to read the banned posts.

http://drbenway.blogspot.com/ncr/2013/12/avestra-asset-management-launches-new.html
http://drbenway.blogspot.com/ncr/2013/12/aha-avestra-and-formosa-auto-trade-scam.html
http://drbenway.blogspot.com/ncr/2014/01/avestra-hires-self-confessed-criminal.html
http://drbenway.blogspot.com/ncr/2014/04/conman-michael-featherstone-harasses.html

Michael Featherstone's criminal activities were common knowledge in the area, but he was untouchable due to his connections. Anyone asking questions was first politely told to shut up, and then had their lives threatened if they persisted. Featherstone's criminal activities, spanning decades, were openly protected by the putrid Gold Coast police force. A well-known criminal, Featherstone was "photographed socialising with senior serving officers, was endorsed online by a Brisbane inspector and even gave a speech at a recent send-off for a high-ranking Gold Coast officer".

https://au.news.yahoo.com/qld/a/24878932/michael-featherstone-former-senior-queensland-police-detective-investigated-over-alleged-fraud-links-to-bikies/

In September 2014, it was revealed that Michael Featherstone was under investigation from the Queensland's Crime and Corruption Commission (CCC). Referring Featherstone to the CCC, officers openly admitted that it was unfeasible to have the rank police conduct this investigation, given Featherstone's connections and the current level of corruptness within the force.

http://www.abc.net.au/7.30/content/2014/s4079648.htm

After Featherstone's offices were raided and investigations began over his links with fraudulent investment schemes, his criminal associates started distancing themselves from him and one fled overseas. And what about that ASX-listed fraud scheme that brought Mick to this blog? It is still in full operation, with ASIC's blessing. The fraudsters now instead use their corrupt corporate lawyers to spam take-down requests, in all likelihood misappropriating shareholder funds for this purpose. Naturally, there has been absolutely no mention of the Michael "Mick" Featherstone case in the Sydney Morning Herald, the largest "newspaper" in Australia.

Thursday 11 September 2014

The van Eyk circular investment scam collapses

van Eyk runs a circular investment cartel, with its listed and unlisted funds "investing" in each other instead of in actual assets, as first exposed by this blog post in November 2013. This related party fraud has been used to inflate management fees, overstate assets and control "market" prices. The cartel includes the listed van Eyk Blueprint Alternatives Plus (VBP.AX), in which cartel funds Blueprint Balance, Blueprint Capital Stable and Blueprint High Growth "invested". According to its latest annual report, these related parties held 67% of units in VBP as at June 2014. These three van Eyk funds also "invested" in the Blueprint International Shares Fund, which in turn "invested" money with related party hedge fund Artefact Partners, linked to current and past cartel members.

In August 2014, it was revealed that Artefact Partners had not invested as mandated, but instead funneled entrusted funds to an illiquid property fund, in all likelihood a related party of the Artefact criminals. This was in direct contravention of fund disclosure statements, constituting an open and direct act of fraud. Cartel associate Macquarie Investment Management was forced to suspend redemptions on the four van Eyk funds, in its capacity as responsible entity. The rats then started fleeing the sinking ship, with van Eyk's asset consultant team exiting under undisclosed circumstances. Investor outflows led Macquarie to terminate a further nine van Eyk cartel funds, and class action lawyers started to circle the disintegrating fraud scheme. Without related parties to fix its "market" price, VBP went bidless.

By engaging in transactions designed to benefit themselves, to the detriment of unitholders, the cartel directors breached their duty of care and committed fraud. The circular transactions and related party "investing" between van Eyk funds was criminal, regardless of any small print included in product disclosure statements. Past and present cartel directors are all jointly guilty of this fraud. The fingerpointing between the criminals predictably commenced quickly. Laughably, the managing director of van Eyk claimed he had "no idea" why Artefact would engage in related party fraud. Could it be for personal gain perhaps? After all, this is the exact same reason he himself committed securities fraud, so perhaps some self-reflection is in order.

Over the years, the van Eyk cartel criminals have siphoned millions of dollars from granny investors, by circularly "investing" in related party intermediaries instead of real assets. Even if the van Eyk funds are shuttered, this is no way means no money has been lost. If not for the fraud, every small investor in van Eyk funds would have had higher returns over the years, and they should be reimbursed after forensic accounting. This will of course never happen. ASIC protected the van Eyk cartel for years, and still protects numerous other related party fraud schemes following the exact same template. Most significantly, the implosion of the $800m circular investment scam received next to no mainstream media attention, despite its monumental implications. This debacle will be swiftly and silently swept under the carpet.

Tuesday 9 September 2014

The Panorama Synergy ramp

Panorama Synergy (PSY.AX) is a listed securities fraud with links to corrupt politicians and convicted share manipulators. After issuing 347m shares at $0.003 in October 2013, bringing total number of outstanding shares to 474m, Panorama Synergy was ramped to $0.46 in sharply delineated steps over the next few months. This 15,000% ramp brought the company's "market" cap to $218m in September 2014. Before raising capital, Panorama Synergy had a net asset deficiency of $400K.


Purportedly a technology company, Panorama has had negative earnings and cash flows for the past ten years. According to its latest annual report, Panorama Synergy's assets comprise of $1.2m in newly raised cash and a licensing agreement with the University of Western Australia (UWA) for certain microelectromechanical devices. Although Panorama regularly uses misleading phrases such "the company's patented technology", Panorama does not actually own these patents, rather UWA does.

The purported basis for Panorama's "market" cap of $218m is a five-year licensing agreement with UWA, entered into in January 2014. Assuming that Panorama is not a blatantly manipulated listed fraud (which it is), the market value of this licensing agreement is therefore close to $218m. The natural question is then how much Panorama paid for this priceless licensing agreement? If UWA did not receive fair compensation for this invaluable licensing agreement, but rather gave it to a related party at lower than its market value, then UWA officials are guilty of fraud.

The Karam family has had previous business dealings with the Obeid crime family, as shown by ICAC hearings, although they later had a falling out over the botched Australian Water Holdings scam. (CORRECTION: This post originally and incorrectly stated that the company secretary of Panorama Synergy testified for ICAC. This is a different Anthony Karam.) Another director, Jeff Braysich, was convicted of share manipulation in 2007. The conviction was later overturned on a technicality. The scheme Braysich was convicted of used wash trades, i.e. sham trades between related parties, to fake market prices. Such wash trades could, for example, be used for ramps.