Court Case Three: Certified Crazy

Nice that little old xG with its fair share of crazies has caught the attention of the world's most prolific litigant. Jonathon Lee Riches has graciously taken up the case of Bank Hapoalim against xG, claiming that xG stole his intellectual property and hid it in a offshore account vault in Switzerland 20 miles south of the swiss alps. Damningly he also claims that xG are spying on him from the vents in his room at the mental hospital he calls home. They also made Denis Quaid's voice sound in his ear and they have tagged his clothes with GPS. All perfectly reasonable. Considering it's xG.














Edit: Read more of his genius HERE.

Court Case Two: Chimay Shenanigans

It just gets better and better and better and better and better and better. Firstly some great news; James Woodyatt, as well as being sought by the police, has been conned out of $670,000 by Guy de Chimay and his Ponzi fund. Nice one Guy. It's a wonderful moment of karma, as Woodyatt used to work for 'Optimal' a feeder fund for Bernie Maddoff's Ponzi scheme.

This is how Chimay got embroiled in xG; when Guy rang James to steal his money, James suggested that he invest in xG. I suppose in order to convince him he was a serious player Guy went along with it. The investment was meant to be in a 'Bridge fund” (nothing to do with ACH's Bridge investment network - I think, although wouldn't it be sweet if it was.). This fund was to lend money to companies that couldn't raise money on the open market. So I suppose that the share purchase was meant to be in lieu of a loan, so that Chimay could show they were actually making investments. Sadly for Guy his appetite for stealing was greater than the rate of flow of cash into the fund, and there was no money to purchase the shares. The million he put in was borrowed from another investor – it wasn't his money. xG are trying to get the money from Prince Phillipe de Chimay, which will be interesting, and I hope futile.

In another wonderful moment of irony Guy has been caught red handed falsifying bank account records. Guy allow me to introduce you to Rick. He shares several of the same interests, I'm sure you'll have lots to talk about.

Edit: The New York Post says the authorities have only found $131 of cash in his accounts when they arrested Guy. Doesn't look good for James getting his $670,000 back. Such a shame.

Tidying up Townes

Just a quick one on why the Townes deal fell through. In essence Rick happened. He made unrealistic demands, and when Mr Townes did his homework and called Rick a Crook the deal was off. Makes one wonder: Three people have independently said that Rick has an account with shareholder monies in it. Kromka says that he was open to “obscene liability” (possibly falsifying accounts? Consistent with his behaviour at iDigi...), and Mr Townes discovers he's a crook. Rick is a moron, mad, unstable, and a thief.

Court Case One: Kromka and the “Two Crazies”

The Bohman v Kromka /Rodrigue case is a gift that keeps on giving.

Email excerpt:

“From: Richard Kromka
To: Francois Rodrigue:
Sent: Friday, September 18th 2009. 4:42 am

I think the hornets nest has gotten too messy. I think Rick is dangerously out of control and could open up the company and the board to obscene liability – if he hasn't already. As for Treco – I feel the same way although our attendant risk there is not so much explicit as profound distrust. I'm literally loosing sleep about having to deal with either one of them or alternatively having to go forward in good faith and represent them to a third party......

I can't stand thinking, plotting or frankly worrying about how we are about to get hurt (or not paid) any longer....I don't want any more of the same shit – always worrying that we are going to be sued by either one or both of the crazy people (Treco and xG).”

Most interesting for me in the court documents (aside from 100% conformation of the information from my sources) is the mental state of both Rick Mooers and Bohman. They both seem utterly mad. At one stage Rick confesses to Kromka that he had “always been sad and wanted to kill himself every day,” and pours out his personal problems to him time after time. He says the directors want rid of him but do not have the “balls to fire him.” Wanting to merge with Treco, then not.

Bohman is equally irrational. Hiring Kromka, firing him, hiring him again. Paying him at irregular intervals. Agreeing to him having 8% of Treco, then changing his mind. Worse for xG, Bohman assures Kromka that the scheme is fully funded, then leaves it to Kromka to discover the truth...

Kromkas relationship with xG began at the infamous meeting in Twin Palms Hotel in Phuket Thailand on November 28, 2008. Present were Kromka, his partner Vincent Ronquillo, Bohman, Lloyd and of course our Fredrick “Paradigmshift” Wahlman and his girlfriend Karolina Purar. (So confirmation It WAS Frederick Wahlman who was working behind the scenes who brought in both Bohman and Kromka to xG.) Wahlman was to be Kromkas immediate superior at Treco. However as we all know, subsequently he was thrown out, leaving Kromka dealing with Bohman direct.

The things he was promised at the meeting persuaded him to turn down a highly lucrative broking offer in Chicago and join Treco. Within a short time he was also invited to the board of xG. Thereafter he learned the shocking truth that

“xG and Treco were soon facing cash shortages and urgently needed further infusions of outside capital. Despite his earlier insistence that he would not have to raise capital and the assurances from Lloyd and Bohman that Treco would assure xG’s liquidity, Kromka was suddenly drafted for the task of seeking outside investors for xG and Treco. He, along with co-defendant, Francois Rodrigue, then set about trying to generate interest from venture capital firms and other respected funding sources.

Kromka and Rodrigue did pretty well in the circumstances. Using their contacts to obtain two very hot leads for funding. One for a network in Panama, the other for the US (Beechtree). However Kromka obviously has done his research and acknowledges that there were

“two main difficulties in utilizing venture capital firms and other funding sources were Treco’s and xG’s reputations (as well as the reputations of their owners), and uncertainty that Treco would make the necessary payments pursuant to the Infrastructure Agreement on time, or indeed at all. Furthermore, xG’s product roll-out was constantly being postponed and the word in that sector of the business world was that xG had nothing to offer.”

Obviously Beechtree would want conformation that everything was Kosher with regards to the technology, but the Due Dilligence they planned was the last straw for Rick – the reason? They'd find out the tech was nothing special.......

If it wasn't difficult enough trying to assure potential investors it soon became clear that Rick and Johan were as crazy as each other.

“Dealing with Treco’s and xG’s management presented an even more challenging scenario. Neither would communicate with the other, so Kromka many times had to serve as the go-between, which placed him in untenable situations.... Bohman and Lloyd avoided speaking directly to Mooers and told Kromka that the reason for this was to increase Mooers’ “insecurity” in their relationship and that they will only talk to Mooers when 'he ran out of cash' and they constantly discussed with Kromka the idea of suing Mooers and taking over xG

”. Then when critical descisions had to be made they would “be out of communication with Kromka” entirely, leaving him hanging.

Meanwhile

“Mooers did not communicate with Lloyd and Bohman because, among other things, xG continually underperformed” and even though more and more “desperate to obtain financing for xG” would not follow any advice Kromka and others gave him. “In addition to all of these distractions and irrational behavior, xG was nowhere closer to producing a market-ready product, which made raising capital even more difficult.” xG were “inable to put together a coherent plan to monetize the xMax system.”

Reading the updates of the case it seems as if Treco/xG will fail. :-D. Their main argument is that Kromka is in possession of some secret information – but are unable to specify exactly what the information is, or even what format the information is in. I suspect that the info they were trying to protect is that both Mooers and Bohman are mad as hatters, and that neither has the cash they claim they do. The good news is that Kromka has now counter sued for the money he gave up from the other broking offer, and for the shares he was promised in Treco and xG (don't bother Richard they're worthless). My feeling is that if he can prove the offer existed he will win, and it will cost Bohman $3+M.

Getting Interesting.

My apologies for lack of action on the blog, I’ve been involved in quite a few other projects.

Finally, some interesting news, and like waiting for busses you wait for one, then several come along at once. Victor out! Manipulating stock! Wow!

Here’s the inside line to recent developments:

1. Victor Suno, and James Woodyatt (until last week both xG Directors) according to a source close to the Swiss Police, have both got warrants out for their arrests. They have been wanted for questioning by them for quite some time in connection with xG securities fraud following from the case of Bank Hapoalim.

2. Woodyatt, who used to work for one of Maddoff’s feeder funds, left for Miami without informing the Swiss authorities of his whereabouts. Maybe the Rick could help them by dropping them a line on ++41 (0)31 323 11 23? You know it makes sense Rick. They are looking for Victor in Spain...

3. The FSA have been investigating xG for at least 6 months. I know of several Swiss lawyers who have been contacted by the FSA with regards to securities trading via ACH, and for other matters. It seems like this investigation has prompted the recent expulsion of Victor who, as we know, was also an employee of ACH.

4. Some of the former investors of iDigi (xG’s previous incarnation) are in the process of suing the xG directors in a class action suit. An estimated 30 million USD was lost in iDigi…Seems like some people want their money back.

5. Rick and Roger have both have been taken by the FBI to a Grand Jury questioning in Washington DC into investigations regarding the iDigi fraud.

6. Just to confirm the sort of people we are dealing with, Kevin Flessner, the former CEO if iDigi has recently been prosecuted for ‘Flipping’ fraud. A story about is says “he was sued in October 2001 along with his former partners, Richard Mooers and Roger Branton, for allegedly participating in a scheme to "siphon off" and "pirate away" iDigi's assets for their own benefit.”

7. The Bohman v Kromka is old news but further enquiries suggest that the deal for extra investment that Kromka secured was dependent into a specialist team at General Dynamics doing a thorough investigation of the technology. Rick couldn’t let that happen, for fear that as we all know, xG have nothing special, so he shopped Kromka to Bohman.

The interesting thing is – why admit it now? They’ve known for years that there have been ‘issues’ surrounding ACH’s share trading. (Not to mention sales of restricted stock.) They knew that ACH was dodgy, must have (I said it here several times), and yet they still invite an ACH employee to become a board member. Evidently it stinks. The difference is, now to then, that the FSA’s investigation is closing around the necks of Rick and Roger. So they give Victor as a scapegoat, and claim they knew nothing about any share manipulation. Well, back in iDigi days they knew their financing partners were a boiler room, and in the xG days they also knew that ACH were a near-boiler room. The funny thing is, they didn’t complain when the shares got lapped all the way up to $15. You can’t have it both ways boys.

Update: Ian Hammar is following the story over here. With some extra juicy detail. I tried to post this on iii.co.uk, but got immediately banned. How childish. Someone doesn't want this info out there....

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.