Bumps on a Log
From the Whatever-Happened-To? File: Theron Nelson, an Amway distributor from Idaho who raised hundreds of thousands of dollars from fellow Amway colleagues and invested the money in the fraud-ridden J. David & Co. investment firm, has been charged by Minnesota state prosecutors with securities fraud and “theft by swindle.”
“We’re alleging a Ponzi scheme,” according to Jan Newberg, the Minnesota special assistant attorney general who spearheaded the Nelson case.
The government alleges that Nelson swindled Minnesota residents out of at least $1.2 million by “inducing them to loan him money on a variety of misrepresentations,” Newberg said.
Typically, investors would give Nelson $50,000--$5,000 would be used as a down payment to buy into a 4,000-acre recreational retreat ranch in Idaho and $45,000 would be deposited in an “investment firm in California that dealt with interbank currency.” Nelson never mentioned that the firm was J. David & Co., Newberg said.
Nelson’s preliminary hearing is set for July 25, one month after J. David (Jerry) Dominelli could be sentenced to as much as 20 years in prison after pleading guilty to four federal felonies in March.
Area bankers who thought that the government would quickly wind up its investigation of possible laundering of narcotics money at the Bank of Coronado’s San Ysidro branch have been disappointed.
Guadalupe M. (Cha Cha) Alcantar, the bank’s branch manager, was arrested in late March for allegedly violating cash transaction disclosure laws, but, two months later, bank employees are still testifying before the ongoing federal grand jury investigation of the allegations, according to sources close to the case.
San Diego banking executives are interested in the case because so many banks cater to Mexican customers, who are reportedly the focus of the government’s drug-money laundering probe. The bankers fear that if the investigation uncovers widespread violations, these customers will be reluctant to continue depositing money in area banks.
How long the case will drag on is uncertain. Assistant U.S. Atty. Stephen W. Peterson, who is a member of the Organized Crime Drug Enforcement Task Force, would not comment on the case, other than to quip that his investigation “will not take more than one year.”
There are some people who are just not cut out to be corporate types. They feel restrained by organizational structure and get bored once their entrepreneurial ideas have hatched.
Ian Gardner-Smith is one of them.
Gardner-Smith was one of the founders in the late 1970s of Northeast Energy Development, the oil and gas predecessor to San Diego-based Great American Resources. He wheeled and he dealed, and, when the company began to grow and the corporate executives took over, Gardner-Smith found himself on the losing side of a bitter power struggle.
He regained control of troubled Northeast Development one year later in 1982. He reorganized it and secured outside funding from the Philadelphia investment brokerage firm of Butcher & Singer.
As the company started to grow and black ink replaced red, the corporate walls began moving in on Gardner-Smith once again.
He was the one who wanted to branch off into other fields, but he found justified resistance from Great American Resources executives, who figured that forming oil and gas development partnerships would keep them busy enough.
He resigned in November and now heads Gardner-Smith & Co., which plots financial strategies for emerging companies. He owns, he quickly notes, 100% of his firm’s stock.
Gardner-Smith’s first project is a long way from the oil and gas business: He’s taking public Doug Wilson Studios Inc., a designer of adult apparel and kid’s wear.
The Oldest Game
From the Why-Does-It-Always-Seem-to-Happen-in-Southern-California File: Officials of American Marketing & Manufacturing Inc. of Sorrento Valley, in business only four months, think they’ve stumbled onto something big--Love Cubes, two acrylic die which are rolled by a couple to determine which piece of clothing gets removed.
The game, according to publicity director Lisa Newman, is designed to add “a new dimension to people’s relationships.”
It certainly has added a new dimension to American Marketing & Manufacturing. So far, the firm has sold 11,000 Love Cubes kits, and has another 45,000 on back order--all at $25 a throw, or about $1.4 million.
In addition, Bloomingdale’s department stores is interested in distributing Love Cubes but have asked American Marketing & Manufacturing to replace the risque cover with something less revealing.
Coming next is a “Rodeo Drive” version of Love Cubes, which will sell for $5,000 and feature leaded crystal cubes etched in 24-karat gold.