13 Sep BIZM Litigation – Will the SEC follow the breadcrumbs – part 2
On July 3, 2013 the SEC suspended BIZM and brought charges against some of the shareholders from Argentina that were illegally selling shares into the market. That same night we wrote a report for the event found here.
According to the SEC Complaint, from March to June 2013, ten Argentine defendants received more than 20 million shares of Entertainment Art, which was one-third of the company’s total outstanding shares. In a one-month period beginning in mid-May, eight of them sold more than 14 million shares. The sales yielded almost $34 million, of which almost $17 million was wired to overseas bank accounts. Their U.S. brokerage accounts, which include approximately $16 million in cash, are subject to the asset freeze.
In the press release today, the SEC also announced charges against ten Argentine citizens who unlawfully sold millions of shares of Biozoom, Inc. in unregistered transactions. The Complaint lists the following ten Defendants:
Andres Horacia Ficicchia resides in Buenos Aires, Argentina and is an Argentine citizen. Ficicchia is a self-employed music producer.
Gonzalo Garcia Blaya resides in Buenos Aires, Argentina, and is an Argentine citizen. Blaya is a music producer.
Luciana Mariana Hernando resides in Buenos Aires, Argentina, and is an Argentine citizen. Hernando is a marketing manager.
Cecilia De Lorenzo resides in Buenos Aires, Argentina, and is an Argentine citizen. Lorenzo is a self-employed marketing specialist. Lorenzo is an attorney practing administrative, intellectual property, and patent law.
Magdalena Tavella resides in Buenos Aires, Argentina, and is an Argentine citizen. Tavella is a retired school teacher.
Adriana Rosa Bagattin resides in Buenos Aires, Argentina, and is an Argentine citizen. Bagattin is in sales and marketing.
Daniela Patricia Goldman resides in Buenos Aires, Argentina, and is an Argentine citizen. Goldman is a delicatessen owner.
Mariano Pablo Ferrari resides in Buenos Aires, Argentina, and is an Argentine citizen.
Mariano Graciarena resides in Buenos Aires, Argentina, and is an Argentine citizen.
Fernando Loureyro resides in Buenos Aires, Argentina, and is an Argentine citizen.
These Argentine shareholders were just nominee shareholders holding the ownership of those securities in name only. The link to these Argentine shareholders is the former CEO of Biozoom (BIZM), Sara Deutsch, who runs a restaurant in Buenos Aires, Argentina called Magdelina's Party.
Sara Deutsch was assigned the nominee role of CEO when Medford Financial Ltd, an anonymous Belize entity pass the ownership of all of the stock of BIZM (then known as Entertainment Art Inc) to another anonymous business entity located in the British Virgin Islands called Le Mond Capital.
Sara Deutsch helped locate nominee shareholders from Buenos Aires, Argentina to take ownership (in name only) of over 20 million shares of the BIZM stock from La Mond Capital to be sold into the market during the paid promotion.
With the help of Scottsdale Capital Advisors in Arizona and Legend Securities Inc in New York, these nominee Argentine citizens were provided with brokerage accounts to illegally sell their shares into the market.
Foreign bank accounts were set up for the nominee Argentine citizens to transfer the illicit proceeds from the illegal sales of their BIZM securities.
The SEC Complaint maps out sales by each of the nominee Argentine citizens including listing which brokerage firm helped with the sales and into which foreign bank those gotten gains were scheduled to be transferred.
Ficicchia: On June 7, 2013, defendant Ficicchia instructed Legend, to wire $1 million to Alpine Securities, Inc., a registered clearing broker-dealer. Alpine provides clearing services for Scottsdale, and as described earlier, Ficicchia opened an account at Scottsdale on or around June 10, 2013 and funded it with this $1 million. On June 25, 2013 --the same day as the Commission's order suspending trading in Biozoom - Ficicchia instructed Scottsdale to wire $325,000 to a bank account in Cyprus. This wire was not executed. Ficicchia's brokerage account at Legend currently has a cash balance of slightly over $1 million, and Ficicchia's brokerage account at Scottsdale currently has a cash balance of approximately $328,000.
Blaya: On June 14, 2013, Blaya instructed Legend to wire "all settled funds except $30,000" to an account held in Geneva, Switzerland. This wire was not executed. This account currently has a cash balance of approximately $3.5 million.
Hernando: On June 13, 2013, Hernando instructed his broker-dealer, Legend, to wire "all available settled cash" in her account, which at the time, was approximately $600,000, to an account held at Hellenic Bank Public Company Limited in Lemesos, Cyprus. This wire was executed. On June 17, 2013, Hernando instructed his broker-dealer, Legend, to wire $2 million, again to an account held at Hellenic Bank Public Company Limited in Lemesos, Cyprus. This wire was not executed by Legend. This account has a cash balance of approximately $4.5 million.
Tavella: On June 25, 2013 - the day of the Commission's order suspending trading in the securities of Biozoom Tavella attempted to wire approximately $2,450,000 out of her account at Scottsdale to a bank account in St. Vincent and the Grenandines. This wire has not been executed. The current cash balance in Tavella's brokerage account is approximately $2.47 million
Bagattin: On June 20, 2013, Bagattin instructed Scottsdale to wire approximately $4.33 million to a bank account in Cyprus. This w1re was executed. On June 24, 2013, Bagattin instructed Scottsdale to send an additional approximately $1.89 million to the same bank account. This wire was also executed. The current cash balance in Bagattin's brokerage account is $3,000.
Goldman: On June 11, 2013, Goldman instructed Scottsdale to wire approximately $3.77 million to an account held at a bank in Geneva, Switzerland - a bank where Blaya also holds an account. This wire was executed. The cash balance in Goldman's account is $0.
Ferrari: On June 19, 2013, Ferrari instructed Scottsdale to wire $500,000 to an account held at a bank in Panama. This wire was executed. On June 24, 2013, Ferrari instructed Scottsdale to wire an additional $4.9 million, this time to a bank in Belize. This wire was also executed. The cash balance in Ferrari's account is $0.
We closed our report by saying that we hope the SEC realizes that these Argentine citizens were just a front and they continue to follow the bread crumbs so they can find out who really controls those foreign bank accounts and really orchestrated the BIZM scam (we believe it is Francisco Abellan).
Here is our research about where we believe those bread crumbs will lead.
At the time we actually had more research but never published it online. I decided I'd go ahead and publish that research now.
Prior to BIZM, Francisco Abellan touted as a newsletter run by a fellow named "Elliott Dobbs" with a unique photo. Many believed Elliott Dobbs didn't exist despite the photo on the Stock Market Authority website (since removed but easily verified):
We found the following photos on social networking sites Facebook and Soundcloud (a music based social network)
Clearly this was the same guy, same name. This WAS his facebook page until he removed it right after the BIZM freeze:
Now why would a young chap from Manchester, remove his facebook?
As part of our investigation into Dobbs we went through, one by one, each and every one of his facebook friends trying to find someone who could be linked to Abellan. We came across this person named "Lady Astor" (we aren't sure of her full name as she uses a pseudonym but we know her husbands name is Rob Rizzo)
Lady Astor has a well known online presence. She appears to be very well versed in the English language, and based on her facebook and instagram pages travels a lot to the US. While having the appearance of an alternative emo/gothic/hipster her and her husband appear to be always on the move and while they do not disclose what exactly they do for employment they clearly have money as they are able to afford most of the western trappings people in Argentina (where they live) cannot.
When Dobbs' profile was online there were several communications on photos between Dobbs, Lady Astor, Rob Rizzo her husband (facebook page here) and another fellow from the UK: Ed Laws who still has a facebook page here: https://www.facebook.com/ed.laws.5
While they are no longer online and we should have copied the screenshots, the exchanges were very odd between these 4. Here you had two completely different kinds of people (a husband and wife in Argentina into gothic rock music and emo) and two young British lads more of the funk type than the anarchist type. It just felt to us as though these 4 shared some type of a work connection as they had no mutual friends and were very involved in each other's lives.
That hunch couldn't have turned out to be more true.
Following the BIZM bust, we had a hunch so we rushed to Lady Astor's facebook page and went into her friends list. We then typed in each and every one of the names that opened accounts and liquidated BIZM Stock. In the following images you will see that NEARLY EACH OF THESE INDIVIDUALS SHOWS UP AS A FRIEND OF LADY ASTOR.
This is an obvious smoking gun. Clearly Lady Astor and her husband work for Abellan. It makes sense as he could communicate with them in Spanish. They supply him with nominees as well as travel to the US to pay for the marketing campaigns and open brokerage accounts. His British team of Dobbs/Laws must be assisting on the marketing side which is why Dobbs deleted his facebook account.