Activator President Vows to Keep Company Alive
Activator Supply Co. President Roland Nocera vowed this week to keep his beleaguered company alive, although another firm involved in a controversial $63-million home culture-growing investment operation filed for court protection under Chapter 11 of the U.S. Bankruptcy Code last Thursday.
“I’m not running away. I’m not going to leave the country,” said Nocera, in a phone interview. “We had a business that was very successful.” In fact Activator took in about $63 million from investors, Nocera acknowledged. He said the $63-million figure recently quoted by Kansas securities commission investigators is “in the ballpark,” but he declined to say where the money is today.
Nocera said he and a skeleton staff of eight or nine workers have returned about $8 million to investors in the wake of an ongoing state and federal investigation into the investment operation. Another $3 million on deposit in three California banks, including the Bank of America’s San Francisco branch, is the subject of a court-ordered freeze.
An estimated 27,000 investors in 30 states bought thousands of “activator kits” from Nocera’s Pahrump, Nev.-based company. Investors sold the finished cultures at a profit to Culture Farms of Lawrence, Kan., which was supposed to supply the milk-based culture for a line of women’s cosmetics. Nocera said production of House of Cleopatra cosmetics has been delayed in the wake of the numerous investigations and publicity.
According to Kansas securities investigators, less than 1% of the culture was used for the cosmetics, while thousands of pounds of culture were recycled for sale to new investors. Kansas, Florida, Oregon, and California authorities have declared the culture kits to be unregistered securities and prohibited their sales.
On Monday, the state attorney general’s office asked a San Diego Superior Court judge to appoint a receiver for Activator Supply Co.’s funds held by California banks. A hearing on the request is set for Sept. 23. Deputy Atty. Gen. Al Shelden said his office wants a receiver appointed to make sure the funds held in California are eventually returned to investors.
“That money will probably be all eaten up in legal fees if a receiver is appointed,” said Nocera, adding that most of the investors have been paid back.
However, state and federal officials disagree, saying thousands of angry investors remain unpaid.
Meanwhile, Nocera said U.S. Postal Inspection Service officials have sent letters to investors asking for information about his company. The entire culture operation has also been the subject of a federal grand jury investigation in Topeka, Kan.
Nocera said he is “concerned” about possible criminal charges being filed against him.
