The mysterious Care21 & Palmi

Hello xGers! My apologies for the lack of activity on the blog. I've had other things on my plate.

Interesting news about Care 21. It does, as has been mentioned by Beerson and Balkur over at the iii.co.uk boards, have all the hallmarks of another "Far Reach" episode. Finding anything out about Care 21 is a bit of a paperchase. Marcus Losada definitely exists and his Twitter page shows he has fabulous taste in wines too. My hat is off, Sir.

Notice that he's looking at "other opportunities" from 2nd July last year. Presumably that includes the Care 21 "deal". Care 21 Ltd also exists their only current director is a man called Martin Holliday, Markus was a director but resigned.

Care 21's website lists a telephone number as +44 (0)1252 783212.

What's relevant about all this? Well, the link is Godalming, Surrey, UK. Markus lives there, the telephone number for Care 21 is there. Who else do we know that lives in Godalming?

Yep. Our old pal Palmi Sigmarsson! Just around the corner from Markus. Palmi is, if you remember, the man who shorted his own company, the man who was closed down by the finance inspectorate. What could he be up to? Was it an attempt to raise the shareprice so he could dump even more stock? (He is dumping: He used to have 22 million shares. Now he has around only 7 million).

Did he talk Markus into a deal? Did Markus (or his investors) then do their homework?

Whichever way round it was it seems that this "deal" can be added to the long list of "deals" that never were, like Far Reach,  Gama, Telefonica, and all the rest.

Edit (13/1/12):  It's not surprising they didn't pay up considering today's news that the network isn't ready (when they've been saying for years that it is...):

Scott Garlington, Vice President of Engineering at xG Technology [said they had] "the aim of making the xMax system commercially available later this year.”

So far the only person idiotic enough to pay money for a network that doesn't work is that reptile Marc Dannenberg. Moohahaha.

Loans, Liens, Lies and Laughs

Well Mooers Branton are at it again. Another of the announcements whose headline says one thing, but the body of the text means something completely different. They already have two 'loans' out to their own company, xG, upon which the terms are; when the left hand (xG) doesn't pay the right hand (MBTH) then xG becomes property of MBTH. You would've thought that enough, but now a new announcement. Why? Well it's complicated.

Digging into the legalese of the Articles of Association (link Google Doc) you find that if a group or individual acquires 50% plus of the voting rights then they must make a cash (or equivalent) offer for all the xG shares. The price to be "not less than the highest price paid by the Offeror for Shares of that class or series during the Offer Period and within twelve (12) months prior to its commencement".

Looking at the figures from the last Alleby report, the voting rights that Moores Branton currently have (which include the voting rights they have over Joe Bobier's shares) come up to 43%. Obviously any new major shareholding they take on will take them over the 50% trigger.

This compulsory offer can only be waived if 75% of the other voting rights (i.e. not Mooers Branton's) agree to it. In practice this means Palmi and Bohman/Lloyd, because of the remaining voting rights (once you strip out Mooers Brandon and Joe) Palmi has 25.7%, and Bohman 24.0%, with every other small shareholder (presumably including those outstanding unsold shares from the ACH collapse) making up 50.3%.

The announcement goes on to say that they haven't received that agreement, so Bohman, and possibly Palmi are digging their heels in, which would trigger the takeover agreement and an offer for their shares. If the agreement came to place then ALL of the $10m would go into buying out Bohman and Palmi. This would mean no money left to try to tide over xG.

Then they try to wriggle even further by saying $5.2m of the $10m would go to paying themselves back (early) on the loans they made a few months ago! If this happens xG are worse off than they were previously. xG had been promised $5m ($1.5, plus "Up to" $3.5m). Now xG would only have $4.8m ($10m - $5.2m)! It's crazy. xG get zero if the takeover is triggered (because all of the $10m goes to paying off Bohman and Palmi), and less if it isn't. How is this good news?

Oh yeah. That $3.5m. Did anyone see conformation that they've actually coughed up? Me neither. That announcement said "have agreed on terms under which, at MB Technology's discretion". Maybe their discretion advised against it, and "Up to" is Mooers speak for nothing? Yet they propose to be paid back $5.2m. Do the math.

Then the bribery comes. Notice the "Conversion Rights" term. In it it says that if Bohman/Palmi agree to waiving the takeover within 15 days, MB will pay $0.25, if they don't it's only $0.10 a share.

All this is complicated, and made into a cat and mouse game, by what I suspect must be an imminent legal challenge from Bohman/Lloyd, put in place by Lloyd's resignation from the board. After all they bought around $28m of shares, and the takeover would only get them back between $2 to $5m depending on the offer price. Frankly it's an insult, but it is hard cash.

The takeover would result in xG folding for sure as the money would all go to paying off the shareholders. But perhaps Bohman/Lloyd may decide suing a collapsed company may be more problematic than suing a trading one. On the other hand they have been mis-sold in the most blatant and shameful manner. A simple demonstration to the court about the impossible nature of the xMax modulation should persuade the most cold-hearted jury, and should result in a payout at least an order of magnitude greater than the pitiful return the takeover would bring. If xG are still there to sue. Interesting times.

A Useful Summary

Craig Malthus has written a piece on xG that they are trailing on their website (right-hand column). I made a comment a few days ago, and Craig asked for more info, which I have now provided. For those who are catching up on the xG story I thought it may make a useful summary:

"Hi Craig,

Thanks for the reply. Sure. I'll back up what I said. The beginning is probably a good place to start:

In the late '90s xG was called iDigi, run by the same directors; Rick Mooers, Roger Branton, and the inventor Joe Bobier. Besides that it had three major similarities to xG:

1) It sold similar high-tech broadband radio-modulation products, which would 'revolutionise' the market, but were 'so secret' nobody could ever know how they worked. This was because in common with the early xG modulation - they DIDN'T work. At least at anywhere near the capabilities they claimed to investors. In fact with iDigi their main investor discovered that they had actually cheated in their demo - pre-recording video on computer hard-drives that was supposedly broadcast by their system. (Link a). Link b)).

Compare this with early xG claims that their modulation was special and worked. This (link c)) analysis shows that their claims of special modulation are entirely bogus. Any number of systems could have easily achieved what they claimed was special. (Also see this entire blog by a Professor of Electrical Engineering - link d)). xG's supposed advantage lay within two inventions: their 'special' filter called the 'wavelet pass filter', and 'flash signal'. The two patents backing these up have been shown to show a laughable lack of basic communications theory. (link e, link f)). When iDigi's main investor (Icelandic pension fund LN) found out, well obviously they sued for FRAUD. Mooers obviously couldn't fight it so settled out of court, for $5m.

xG evidently knew about the problems with their modulation system, as witnessed by these emails (link g, h)), and this BER curve they put up on their web-page and later took down (link i)). Yet they continued to tell their investors who had put in their hard-earned money nothing - in direct contravention of AIM rule 11.

a)http://tinyurl.com/2w2fsko
b)http://tinyurl.com/2vx96wb
c)http://www.ka9q.net/xmax.html
d)http://tinyurl.com/3x2wtpw
e)http://tinyurl.com/29ntyvs (pdf file)
f)http://www.ka9q.net/tristate.html
g)http://tinyurl.com/39p5jm8
h)http://tinyurl.com/356884p
i)http://tinyurl.com/2bpz73p

2) In common with iDigi, xG's funding was...ummm...unusual. As you've been told instead of the usual route of showing their incredible system to any number of major institutions who would've undoubtedly cut each others throats to get a piece of it, they chose...wait for it...a boiler-room to market their stock.

With iDigi the boiler-room was, unusually for a company based in the USA, one based in Spain, the Costa del Crime: N.C.R. Capital. (I will leave it to your imagination to decide whether they chose this one to be out of reach of US legislators.) Of the funds raised destined for iDigi 50% ended up in offshore accounts never to be seen again. Did Rick Mooers know it was a boiler-room? Did he know only pennies in the dollar from investors money was going to iDigi? Well, yes he did:

"Rick Mooers came here to Spain," Dannenberg said. "He knew all about it. He knew he was getting pennies on the dollar for iDigi. Yes, he knew it was called iDigi Ltd. He gave a speech to all of us. He mentioned the fact that it was a boiler room. He didn't want it to be a boiler room. He was saying this was not something that was a boiler room deal, but it was. He was just giving us a story to go on."" (link b), page 6, also see link a)).

When iDigi folded it left the FBI and the court administrator chasing up to $30m that had gone missing. None has been recovered to my knowledge.

The link with NCR continues to this day. Palmi Sigmarsson a current xG director worked with NCR to bring in LN, via his company Spectra Kapital. Spectra promoted mainly penny stocks and have now been closed down by the finance inspectorate. The contact list for NCR was allegedly sold on to Spectra...Incidentally this same director made upto $2.25m shorting xG - his own company, as well as allowing stock he controlled to be sold for half the market rate whilst under the lock-up period. That shows confidence in xG, huh?

With xG the story is similar but the boiler-room changes to ACH securities in Geneva. (Again you will note outside US jurisdiction.) ACH were a Swedish brokerage, but have the unusual distinction of being expelled from Sweden for various shady deals (link j)). Two directors of ACH were at one time or another also directors of xG. ACH have now also been closed down by the authorities, but not before they were able to lap the share-price from $4.50 to $18...

After ACH closed, xG were left to mainly rely on unregulated stock promoters like Fredrik Walhman (mentioned in court document - link k)) page 25 onwards) to sell shares. Which he did with some success bringing in $34m investment from a millionaire called Johan Bohamn (who is also not without a 'colourful' history himself..)

Doubts raised at the beginning of the float weren't chased up.(link kk)



j)http://www.highbeam.com/doc/1G1-122629851.html
k)http://tinyurl.com/2wrsper
kk)http://tinyurl.com/35zbxqs

3)The third major similarity involves accounts, so I thank Mr Rotondo for bringing it up. In both companies Rick Mooers dramatically overstated to companies balance sheets. With iDigi (from link b) page 7):
"Mooers never fully disclosed where the money was coming from . which left all of us very uneasy," Heimann said.

He also claims that Mooers and another partner, Roger Branton, wanted to "adjust" entries in the 1999 year-end financial figures "that would show investments in the $10s (of millions) and $100 millions range by valuing their contributions at exorbitant amounts, without any reference to reality."

"They wanted to show iDigi Communications was valued at a very high level," Heimann said. ". Mooers committed fraud in several ways: by falsifying records and inflating financial statements and misleading investors with respect to the value of the company they were investing in .

"No. 2, by setting up all sorts of covert schemes with offshore entities that ended up siphoning off 50 cents on the dollar on average, of monies investors paid."

Mooers, for his part, denied those allegations and claimed Heimann "embezzled from the company."

With xG Rick was up to his old tricks - valuing the company exorbitantly. This may have been justified if the miracle modulation was real - but as I've shown they knew it wasn't, or was unworkable. The 'sales' and 'deals' they announced were really nothing of the sort. The former were mainly just adjustments to the accounts receivable (with, presumably, the knowledge of Johan Bohman) - if you do as Mr Rotondo suggested and check the last few years' accounts you'll see they've just been shifted to debt owing after one year. Very little, if anything, was actually sold in the true sense. The 'deals' were mainly just letters of intent to look at the system. There were by my count 11 such 'deals' - no business ever resulted - despite the 'miracle' nature of their technology.

All in all it paints a very bad picture of the attitude that Mr Mooers has to his investors. This is why the latest announcements (links l), m), and n)) of MBTH being involved is such a bad sign for investors. Now Mr Moores has a mechanism to cheat all the investors quite legally. No wonder Ceinwen Lloyd (xG director, and wife of Johan Bohman) is upset. She realises that the $35m they've put in is hanging in the balance.

l)http://tinyurl.com/36s7hn7
m)http://tinyurl.com/33cm4js
n)http://tinyurl.com/38fa4jx

Finally I should say that it may well be true that xG now have a cognitive radio that works. I'll leave that to people like yourself. But this must be weighed up against the appalling behaviour of Mr Mooers, and his attitude to investors and stock-market regulations. Praise must go to Rick Rotondo for putting an acceptable face to xG, and him having the honesty to say they have had a change of technology (link o)). But all this is too little, too late - it should've come years ago through the appropriate channels - the stock market regulations.

There's so much I left out - enough to write a book - but I think you'll get the picture. I can be contacted at john.prescott.dpm at gmail.com

Regards John.

o)http://tinyurl.com/39lzx62 (in comments)"

Mats and Palmi Email

A chap called Tom commented on my last post about Palmi Sigmarsson. He says Palmi isn’t at all ruthless, is kind to animals, and regularly helps old ladies across the street – before blowing their hard earned pension on iDodgy shares.

But Tom does have a point - I do not know Palmi at all. In order to address this issue I have invited Palmi to comment on the post, and I’ve cc’d Mats so he can see how nicely I write about him. Email sent just now:

from John Prescott
to palmi@psr.is
cc info@wennbergindustries.se
date Sat, Sep 5, 2009 at 11:20 AM
subject Sales of restricted xG Shares.
mailed-by googlemail.com

hide details 11:20 AM (0 minutes ago)

Dear Mr Sigmarsson,

I write a blog about xG Technology. My last post was about you selling xG Technology shares whilst they were under restriction, via an unregulated stock dealer, and at around half the then market price. I thought it only fair to give you the chance to reply, and would welcome your input into the discussion. I promise to post your reply without editing on the blog.

You will find the post here: http://xgtechnologyscam.blogspot.com/2009/09/mats-spanks-palmi.html

Yours Sincerely,

John Prescott.

Mats Spanks Palmi.

What lovely company xG Technology seems to keep.

Rick Mooers: Sued for Fraud at iDodgy. Currently CEO of the xG Scam.

Roger Branton: Sued for Fraud at iDodgy. Currently CFO of the xG Scam.

Joe Bobier: Faked demo at iDodgy. (check out the post Here - from
someone who was there). Currently CTO of the xG Scam.

Victor Suno: Manipulated/lapped xG shares for ACH

James Woodyatt: Former employee of Optimal - a feeder fund for Bernie Maddoff. Sacked. Conned GAMA into an LOI and was rewarded with deputy CEO position.

Frank Peake: Such an annoying twat that someone actually slit his throat! Honestly!

Major Shareholders: Berth Milton - His money does not come any more dirty (although I have admired some of his works in the past - purely research..). Johan Bohman - stole money from a CHURCH!

And I'll come on to Palmi Sigmarsson in a moment. In fact the only one that comes out with any sort of credit is Mats Wennberg. In fact Mats recently tried to do the honest thing (as honest as you can be surrounded by these people).

Do you remember the Press Release that xG sent out on 24th April 2009?

Lock-up Agreement relating to shares in which Director is interested

xG Technology, Inc. (LSE-AIM: XGT, "xG" or the "Company"), which has developed an innovative, low-cost, mobile VoIP and data communications system, is pleased to announce that a lock-up agreement relating to a total of 22,344,191 shares in the Common Stock of xG (held by Stormur Holding AB, in which Palmi Sigmarsson has an indirect 58.7% controlling interest, and representing approximately 16.9% of the Company's share capital, the "Locked-up Shares") has been entered into by Palmi Sigmarsson and companies under his control.

In order to avoid the creation or continuance in the market of an impression that there may be an overhang of shares owned or held by Palmi Sigmarsson or companies under his control, they have entered into a lock-up agreement with Wennberg Industries AB ("Wennberg"), representing the Company's senior independent Director, Mats Wennberg.

[My italics on indirect]You'll probably wonder why such an agreement was necessary. Why go to the bother of stating this? Isn't it enough that there was already the standard AIM lock-up period in force? Well step forward Marc Dannenberg! Step forward Palmi Sigmarsson!

It seems that these two had been conspiring to sell RESTRICTED xG shares, during the lock-up period! And not only that, but selling them at around HALF the then share-price. AND selling them to US citizens in contravention of 'Regulation 'S''!

Whoops! I have an invoice from Marc to a US Citizen for shares in Guardian Holdings Ehf, (Have a look in xG's shareholder register and you'll see Guardian is a major xG shareholder - the director of Guardian is Palmi Sigmarsson). So in effect they were buying xG shares whilst under lock-up.

It seems that Mats got wind of this (somehow - ahem) and blew his top. He demanded that Palmi sell no more restricted shares, and that give over to him the control of those shares. Well done Mats! Good for you.

Does it end there? Was it an isolated incident? Ohhhh Noooo. I know of at least two other sales of restricted stock, and have the bank account details that would prove it. Also note the subtle way that Palmi is not a Direct owner of the stock, but indirect. It seems that this slight distancing of him from the sale - even though he is the ultimate beneficiary - has been used to somehow justify the sale.

This is very interesting! Who else do we know is an indirect owner of xG shares? Yep! You guessed! According to the AIM admission documents Rick Mooers AND Roger Branton also own their shares indirectly, through trusts intended for their minor children. Could it be that the large volumes we saw traded through AIM, via SIS, were part of these trusts? SIS is as we have seen sometimes used to disguise who actually is the owner of any particular stock trade.

So Palmi, old chap, lets have a look at your old company Spectra shall we? On the 12th of March 2004 the Finance Inspectorate withdrew Spectra license to act as a finance/trading firm. What they found was that the company had virtually no internal controls, that their 'assets' were large shareholdings in un-listed highly dubious companies (remind you of ACH?), that their capital requirements were hilariously inadequate, they had enormous conflicts of interest having board members on many of those dubious companies (ACH AGAIN!) and that had huge exposures to some very dodgy deals.

Reading between the lines, Palmi has prior experience of all the criminal activities that ACH were undertaking.

Which makes me wonder: Is Palmi the architect of this current xG/ACH scam?

It would explain the huge shareholding he seems to have been gifted by Rick and Roger. As well as the experience he certainly seems to have the ruthlessness and the disdain for the law which such a scam needs. He knows Rick and Marc from the iDodgy days. Spectra was the one that introduced the Icelandic pension fund to Rick, and NCR Boiler room introduced Spectra to Rick. It all fits.

Now Mats. Do the honest thing again - and shop the lot of them to the Police.

Déjà Vu all over again

Nothing much seems to change over at South Pineapple Avenue. Still scamming. Still lying to the stockmarket. Still pretending that 'any day now' they'll launch a revolutionary 'phone. And still getting folks (like me) kicked off the iii.co.uk boards...

Anyhoo. there's a few nice new details to keep me entertained. Firstly Johan Bohman has always fascinated me. He is after all the sole reason that xG are still in business. How can one man have so much money, but be so stupid with it? Obviously as we have seen elsewhere on this blog he was conned into investing in xG by our very own Fredrik Wahlman (shyster, unregulated stock-promoter) - whilst they were both on the piss in Bangkok. Now that he's sobered up, and realized what an enormous fuck-up he's made it seems like Johan and Fredrik aren't buddies anymore. When the Treco website was originally made live, the sole representative was our buddy Fredrik. Now look on the Treco site and Fred's name is nowhere to be seen.

But it gets stranger. Perhaps Johan hit the bottle again after getting rid of Fred because who did he turn to to ensure strong honest leadership at Treco? He needed someone reliable. Someone with an outstanding reputation. Marc Dannenberg was busy polishing his head so in June, Victor Suno - an ex-ACH dodgy dealing, stock manipulating arsehole - who also happened to be a xG board member, was named on Treco's site as their representative.

Well that didn't last long! A month or so later and Victor's gone too! Looks like the only people that Johan could find were a random Krav Magna instructor(!), a Welsh bloke, and Richard Kromka. Poor old Fred, poor old Victor, well I suppose they can burn their xG option certificates to keep them warm on the cold winter nights.

But Johan seems to be having even more problems than just the Treco affair. Not least that he's realized his investment in xG is next to worthless, his name is also being splashed all over the Swedish press in a less than favourable manner. We read at Affairsvarden that:

Billionaire Johan Bohman's asset management company, Green Stream Investment Services, violated both the Companies Act and the FSA regulations for years. [If the] Inspectorate had known the truth, the company had received its license revoked.

It seems like he was doing extremely risky deals with money that a CHURCH had invested with him - in violation of the wishes of the church for safe, secure, investments. When Green Steam went bankrupt the church took a huge hit.

In an eerie-echo of Palmi Sigmarrsons' company Spectra Holdings, Green Stream were operating at way, way below the minimum capital requirements to conduct such a business. They illegally covered this up to the authorities, and the shit is only just hitting the fan now. Palmi on the other hand wasn't quite so successful at lying and the authorities caught up with Spectra.

Worse than that Johan blatantly stole around 8 Million from investors! He valued a nearly worthless part of his business at 8 million, sold it to another part of his business, and pocketed the entire amount himself.

There seems to be no corner, no crevice, of xG Technology that doesn't stink of fraud.