Stock Lapping

One of Falt's accusations was that ACH were 'Lapping' in order to manipulate the price of xG Technology's stock. What is 'Lapping', and does it fit in with our observed behavior of the trades of XGT's stock?

The following diagram demonstrates what lapping is:



Lapping is essentially 'robbing from Peter to pay Paul'. In financial fraud terms it utilizes the fact that the fraudster has access to multiple accounts, and that it's usual for large firms to send out monthly statements alphabetically, so people with surnames starting with A gets theirs sent on the first of the month, those with B on the second etc. This is useful to them because funds, or stocks, can be 'borrowed' from an account and won't be missed for another thirty days.

Usually a dummy account is set up, which we will call account A. Money or shares, are diverted from a regular account, B, and in order to hide this, funds from account C are put into B, C's loss is covered by D, and so on. This juggling of accounts can have a number of aims:

Firstly it enables people to simply steal money from account A, and cover this by continued transfers.

Secondly, when one is dealing with stocks, it means that the volume is multiplied significantly. If one has 30 accounts to lap through, then the volume is multiplied 30 times. If as we said before ACH are both the bid and the ask of any one trade it could theoretically increase the price every time. However the bubble bursts when at these inflated lapped prices there are more sellers than buyers from outside the lapping circle.

Does that fit our observed picture? HELL YES!
1. After IPO xG's stock price rockets.
2. There's dozens and dozens of unusual trades; selling below the bid, and buying above the ask,
3. And then when people like Marc Dannenberg boast of selling at $18/$15 a share, the price crumbles.

Summary: Falt was right, and ACH and xG are thieving bastards

Another thing is, in the recent press-coverage of the ACH bankruptcy an 'insider' said that they had ONLY 50 active customers and 2-300 actual proper accounts. That's a staggeringly small number. The rest of ACH's 6000 customers were in the pyramid/MLM scam called the Bridge Group. Bridge is, like ACH, banned in Sweden. It claims to offer the opportunity to 'buy-in' to companies *before* IPO. Like ACH its customers seem to be mostly Swedish, but as Bridge don't have a license in Sweden, when they complain about having been ripped off there's nothing the Swedish authorities can do. Each bridge member had to pay to open an account at ACH, as well as a $1,800 joining fee - And then watch what they bought plummet up to 90%....

Total Bridge customer deposits at ACH were only $7.6M. (Thankfully all of that is covered by the Swiss guarantee scheme as they are all small customers with <$80k each under deposit.) So if 6,000 people only had on average $1,250 or so on deposit, that must mean the other 300 customers are HUGE, right?

It seems that ACH weren't as large as they made themselves appear. Nothing wrong in that - a bit of salesmanship. Olof Hedengren of ACH said in the press the other day that only a 'very small' number of people would lose money in the Bankruptcy because everyone else had under the $80k threshold. Naturally as a brokerage the majority of customers would have their holdings in stock, but even so maybe there's only $30-40M in cash. [Edit: The press now reports their assets to be ONLY $10-16M!]

It does make the $10.8M that Olof borrowed from UBS a little while back in order for them, and their customers to buy stock in xG Technology seem like a MASSIVE amount! It would make xG a huge part of ACH's business. Is it any wonder they were keen to play ball with a little manipulation?

The Phone Calls

In response to Clifton – here’s the list of calls Mr Dannenberg made that was intercepted by/obtained by Okey. Together with some comments. There’s quite a few I haven’t found anything about, and quite a few Spanish mobiles, these could be quite innocent (although obviously I doubt it – it’s Marc Dannenberg), but who else do we know in Spain? Johan Bohman lives mostly in Spain…

1) Switzerland 41227079369
ACH Securities
Either Stefan Bennici or Marc's mate Gunnar Engellau.

2) Spain 34654997317
Spanish Mobile

3) Spain 34652885657
Spanish Mobile

4) Switzerland 41313234040
Swiss Police
Money Laundering Department.
Hello. HELLO!

5) Sweden 46708876785
Fredrik Wahlman
First person Marc calls after the Police. Lower key stock promoter, but probably more important than Marc. Used to post as Paradigmshift on iii.co.uk. As he is based in Sweden one has to ask his involvement in deals such as Bohman, and Berth Milton. He calls TWICE more later on. There's Swedes everywhere!

6) Sweden 46703279014
Jan Larsson
CFO of NS Norisol Sverige AB (jan.larsson@norisol.se) Don’t know much about this guy, apart from the website. Interesting that he's a FINANCIAL officer of this company, AND he was the second person Marc called. Big customer? He's definitely important to Marc.

7) New London,CT 860-444-0102
Richard Mooers
And then the stinking spider in the center on the web. As Deep Throat said to Woodward when talking about the source of the Watergate corruption: "Just follow the Money." And the money here ends up in the pockets of Rick Mooers. The address is 3 Shawandassee Rd Waterford, CT 06385 - hence my log-in on iii.co.uk. GoogleMap "shawandassee road, ct 06385" to see the house that fraud built.

8) Switzerland 41227079373
ACH Securities
VIC SUNO - DIRECT DIAL
Touchdown! Here's proof of the link between one boiler room merchant, a now bust boiler room in Geneva, and xG. (Anyone see the story in the Swedish press about Marc calling the journalist there enquiring about how much it would be to buy ACH. I howled with laughter. What a joker.)

9) Hackensack, NJ 201-315-9763
TCP Cable Works
Paul A Behler. "My best buddy Paul is still here" said Marc the other day, and here, I assume, he is. Also it was around this time Marc was trying to "set up an xG network in NY state". You've gotta guess these aren’t unrelated. How many alias's on iii.co.uk do you think these two guys are responsible for?!

10) Switzerland 41797767189
VIC SUNO
Mobile Number. Again into the cesspool Marc

11) Switzerland 41223272611
Registry judges - Investigating Magistrate Isabelle Cuendet.
Mme Cuendet specialzes in Fraud and Money Laundering. I need say no more.

12) Iceland 354-820-5003
Peter L. Mogensen
(my Icelandic isn't great) but I think he was part of B-Mobile, which is now part of Vodaphone.

13) Spain 34952332408
Banco Atlántico (Av. Andalucía) en Málaga
Marc's bank

14) Spring Vly,NY 845-352-8631
Harvey Steinberg
Marc's stepdad. 25 Chester Ln,Nanuet, NY 10954

15) Belgium 32475707710
??

16) New York,NY 212-309-6552
Erica Evans
ING - Head of Institutional Product Management and Client Service

17) Hartford,CT 860-275-2052
Mobile
We know who else is in Connecticut don’t we Mr Mooers.

18) Hackensack,NJ 201-226-0636
Cassandra Behler / Paul A Behler
The gimp takes another call. (He lives at 81 Chestnut Ave,Rochelle Park, NJ 07662, by the way. Googlmap shows it to be a very average suburban shack. Nothing like Mr Mooers palatial residence…)

19) White Pls,NY 914-447-7338
??

20) Sweden 468219019
Firma Torsten Frisk
Recruitment agency, one man band. No Webpage. Is Marc looking for a job? Ha ha.

21) Ireland 353862546828
Mobile
??

22) Switzerland 41798293263
ACH - Stephane Bennici
Mobile Number. So that's two calls to VIC SUNO and TWO calls to this guy.

23) Spain 34696483497
Mobile
??

24) Spain 34951278907
??

25) Queens,NYC 718-247-0801
WAYMON CROSS
THE CABLE MAN,INC

26) New York,NY 917-731-3701
UPTOWN COMMUNICATIONS & ELECTRIC, INC.
JONATHAN S SMOKLER, Chairman or Chief Executive Officer

27) Spain 34952880430
??

28) UK 441285711639
Asbestos G B Ltd.
Keble Cottage London Road Fairford Gloucestershire GL7 4AW

29) Netherland 31715614957
Eelvelt Computers
Mr JC Eelvelt. A One-Man band computer company, although have a look on their website here (http://www.eelveltcomputers.nl/mt.htm). You'll see THREE reports on xG Technology - go figure! I love the predicted sales figures in the Hitchens document - like $50M 2007 and $80M 2008!!

30) Sweden 463-168-6832
Per Eskilson
per.eskilson@ccskadecenter.se ,

31) Sweden 46708876785
FEDERICK WAHLMAN

32) Norway 479-053-1990
??

33) Iceland 354-864-7877
??

34) Sweden 46708876785
FEDERICK WAHLMAN Again!

35) UAE 97144282468
??

36) S. Africa 27126669121
Lorbrand (Pty) Ltd
Sunderland Ridge, Centurion info@lorbrand.com

37) Iceland 354-581-1180
??

38) UK 441625549457
Bellairs Estate Management Ltd
3 York Crescent, Wilmslow, Cheshire SK9 2BB

39) UAE 97143985285
??

40) Ottawahull,ON 613-482-0607
SHEC
Solar Hydrogen Energy Corporation, 2214 Hanselman Ave, Saskatoon , SK., Canada, S7L 6A4

41) Saskatoon,SK 306-956-2225
SHEC
Thomas Beck, President and Chief Executive Officer. You've gotta hand it to Marc for after scam service. Here he is involved in TWO scams at once.

42) UK 447803184905
Mobile
??

43) Norway 476-698-9982
??

44) Norway 479-229-3602
??

45) Sweden 46706569019
??

Any further info anyone's got feel free to let us know...

xG Laundering Money?

Hello. Welcome to my Blog about xG Technology. We know it's a scam (that's obvious!) so I'm more interested in the why and how of it. How are they scamming? Who are they scamming? The below was originally a post on the xG board on iii.co.uk, but they've obviously been warned off and keep deleting posts that are negative about xG. To be fair they also delete posts from a prominent wanker-ramper Mr Marc Dannenberg and those of his gimp Paul.

This was to another PR/ramper merchant called Gurgle who claimed it unlikely that xG were manipulating stock or Laundering money.

Gurgle,

From the stuff I've been reading both here and on wirelessexpressions.com, there seems to be some evidence for it. Here's a company without a working product, with a highly dubious history both in terms of the principals and their past technology, whose name is splashed all over the internet with 'fraud' next to it, who cannot even organize a simple demonstration of the product, who has missed deadline after deadline, who misled the market over $57M of orders, who blew deals with Skytel/National Grid/Gama/Telefonica, whose own engineers are criticizing and suing them, whose former directors have been sued for fraud, whose current directors actively shorted the stock, and who seem to be unable to even make one true factual statement in a press release. They are a laughing stock.

BUT

They are still able to somehow attract investment of (apparently) millions, upon millions of dollars. How come? Who would be so stupid to give this bunch of sharks hard won dollars? Then you dig a little deeper, try to peel of the wrapper, and you get mysterious companies based on Turks and Caicos (the mecca for drug money) who are linked to porn companies. There's a mysterious 'Billionaire' Mr Bohman who has bought 1000 worthless boxes. Why? The technology is worthless. Idiots may argue that Mr Bohman and Mr Perrystone have 'seen inside the box' and have had demonstrated to them that xMax works as described. That's quite obviously ridiculous, BECAUSE if they could demonstrate it to them, then they could demonstrate it to everybody - and Rick Mooers would be the richest man on the planet. Hasn't happened, and it won't.

AND

And then there's the 10k, 20k, 50k worth of shares that seem to go round and round usually being bought/sold at the middle of the spread. Sometime they mixed it up, and bought one day, sold the next. For over a month and a half the price was rooted to $5. Absolutely stuck like glue despite over average volume. Dig deeper and you'll find a $5 sp values the company at $500M precisely the valuation where huge bonuses get paid if the company is sold. Hmmm. With all the negativity out there (and on here) about xG do you honestly believe those were private investors actively trading this pup of a company? I knew you wouldn't. Those shares were being traded to give the impression of liquidity, and a veneer of volume.

HAVE

A look at wirelessexpressions blog, and there's a very telling part where one of the guys has got hold of Marc Dannenberg's phone records. (I assume that must've been Okey's son who's been arrested for that sort of thing). Anyway Dannenberg takes a call from the MONEY LAUNDERING part of the Swiss Police, THEN makes the following calls straight after: Frederick Wahlman, Rick Mooers, ACH. Those names ring bells right? Why should Dannenberg be calling those names in connection with MONEY LAUNDERING?

ALSO

Now consider ACH themselves. Two - count them. Two former employees there have been directors at xG. Now ask yourself why would a technology company based here in the states pick up the phone and call a dealing company in Switzerland and ask if anybody would like to be a director of a VOIP company. No experience required. No expertise needed. Just come along and we'll make you a director. Obviously they don't. The only explanation is that ACH were raising funds for xG, and the deal was those guys came on board. Why didn't xG ask a bank, or venture capitalist, or even a US/UK based dealer to come on board? Why these guys? Why ACH? Hmm....WAIT! I know the answer. It's because ACH are as fly as....

SO

Here is my theory. It's just a theory from what I've read. But I hope you guys realize why I came to this conclusion. In fact I think it's the only thing that does make sense about this crazy company.

Firstly you've gotta totally divorce the guys in the lab from all of this. They'll carry on trying to headbutt their way through the Shannon Bound without success. Most have wised up already. They are just a smokescreen. They are the proverbial corner store that Al Capone hid his yobs behind.

Secondly you've gotta realize there were two threads to their fraud:

i) The primary one was so so simple: Sell the company. Sell it for loads. The plan being to whip up some pump about the company, get the Internet bulletin boards frothing, drop names that so-and-so is bidding. Hopefully the buyer would be in such a hurry that they wouldn't actually bother checking to see if xMax actually worked. When they found it doesn't - well too bad. Have a look at the company's articles of association, on almost every page there's a reference to 'If the company is sold', '$500M valuation', '$1B valuation'. Have a check back at some of the early 2005 or so internet stuff. They're all hinting at offers for the company. Company members are rewarded bonuses to keep the SP over these valuations. It's just so blatant. It could've worked too, after all there's mugs buying oil exploration companies every year that haven't got a hope in hell of finding any oil. I doubt they even bother to look most of the time.

ii) So, xG haven't been sold. Not even to Google. The bull market's ended, and Rick Mooers is still sitting on millions upon millions of 'restricted' shares. What does he do? Give up? Nah! Not his style. He's still raking in his LEGAL salary of $70k a MONTH. (Why are shareholders so stupid as not to complain about this?) But there's no buyers, and the geeks haven't shat a miracle.

C'mon guys don't feel sorry for him. He's already planned for this. His buddies at ACH have already planned for this. They're in Switzerland (as the Swedish government has kicked them out for silly things like breaking the law) and Switzerland has advantages because there's always some Nazi, or drug lord, or tax evader who wants to clean some money. And now they have a perfect vehicle for doing so.

So imagine this guy with pots of filthy money. He can't spend it, the FBI would be all over him, but he's willing to trade 10%, 20%, of it to someone, or some company that can clean it for him. So through ACH he buys shares in xG. What he actually receives is the restricted shares from the holding of Mr Mooers. The cash gets put in a SPV in Iceland. Then ACH goes to work. Has anyone noticed that xG are THE ONLY COMPANY on AIM to use a clearing system called SIS (SegaInterSettle)? In essence it means that a broker like ACH can sit at his computer screen and trade xG shares with a like-minded partner all with the settlement being done instantly electronically. So he could, buy and sell, sell and buy, all with the same pot of money and manipulate the price to, let's say $5. He controls the price totally. He is the bid and he is the ask. (Unless a third party actually sells, but there aren't many of them) He could also slip through a few sales of these freshly laundered shares, a bit at a time, to help the poor criminal out in his retirement - the money coming out of the SPV.

Now here's a clever bit. If the share price falls it benefits xG/ACH! Imagine (for ease of math) that the criminal buys a million shares at $10 a share. So $10M goes into the SPV, with everyone taking their slice out of it. Then the price moves to $8 and ACH buy back the million for $8M, and Rick has got his shares back. They've effectively shorted their own company and made $2M. This can then be used to buy some token shares and make press releases like 'Director increases his position' or some such rubbish. And the criminal has brand new sparkling money. Everyone's a winner. If in the very unlikely event that the price rises then good for Mr Criminal, he just has to find a mug to buy his shares - but it sure as hell isn't going to be ACH doing the buying. I'd imagine the bid would collapse like a stone.

But now ACH are gone, and Rick Mooers has lost his playmate. He'd better find a new one soon as ACH's millions of shares will have to be sold by the liquidator. Who the hell is going to buy those? Is there money in the SPV to put in a bid and then find another broker to play ball? Damn Maddoff is out. So's Stanford. Hmmm......