12 Jul Steampunk Wizards Inc (FPETD) soon to be SPWZ – stock research report
One particular name jumps out on Steampunk Wizards Inc (FPETD) soon to be SPWZ which sparked this research report. That name is Cliff Wilkins of Nevis who owns an entity called Lornex Financial Ltd.
Cliff Wilkins, who is from the UK, began to partner with a man named Keith King of South African some time in the mid-90s. By the late 90s, Keith King would become a wanted man in South African on fraud and forgery charges. It was around the time that King and Wilkins came together that some money laundering operations King had set up in the Isle of Mann started to bring some publicized negative attention. Together King and Wilkins established First Nevisian Stockbrokers Ltd in Nevis in 1995 as a way to offer money laundering and tax haven services for people looking to hide their money offshore to avoid paying taxes or avoid detection from the authorities. This type of business often attracts people that earn their money through illegal operations including that of stock promotions and other forms of securities fraud. King and Wilkins quickly established a strong presence in Vancouver where Howe Street had become the stock promotion capital of the world in the 90s with the mafia and the Hell's Angels all getting involved in the dirty world of penny stocks and stock promotions.
Eventually the money laundering activities linked to penny stocks brought the attention of the authorities. At some point Wilkins and King developed a business relationship with a powerful Vancouver stock promoter named Jack Purdy (aka John K. Purdy). Purdy had obviously used the services of Wilkins and King in the past and when two undercover cops posing as Miami businessmen came to Purdy looking for advice on how to launder tens of millions of dollars in drug trafficking money Purdy didn't hesitate to recommend his guys in the Caribbean (Keith King and Cliff Wilkins).
In this nice 2003 write up by now retired Vancouver journalist David Baines, Baines breaks down some of the more interesting details of a 341 page transcript of the meeting between the undercover cops and Jack Purdy. Other Vancouver stock promoters mentioned in the transcript included Don Sheldon and Rick Genovese. The undercover operation lead to the arrest of Jack Purdy and his attorney, Martin Chambers, Michael Hepburn, Ron Horvat, and Purdy's two underlings - Kevan Garner and Harold Jolliffe. More information here. This sting operation became one of many that would be dubbed Operation Bermuda Short. Chambers who was also a favorite of many power Canadian mafia types got 15 years in prison. Much of Purdy's millions of dollars in properties and investments were seized but the powerful promoter was eventually acquitted.
Keith King and Cliff Wilkins avoided the authorities. King has stayed involved in banking and Wilkins has continued to run tax haven services out of Nevis mostly out of the spot light - until recently that is. In September of 2014, the authorities finally shut down a very open money laundering operation out of Belize fronted by Robert Bandfield and Andrew Godfrey which ran primarily out of three offshore brokerage firms - Legacy Global Markets, Titan Securities, and Unicorn International Securities - with the help of American brokerage firm Scottsdale Capital Advisors and its clearing firm Alpine Securities in Utah. That bust led to the take down of Caledonian Securities/Caledonian Bank and Verdmont Securities (Phil Kueber) and later the arrest of Gregg Mulholland. We were all over the CYNK scheme and Mulholland's involvement running Legacy Global Markets. We were also well aware of Mulholland's close relationship with Joseph Padilla and the continued use of Scottsdale Capital to help facilitate pump&dump schemes and how all this carried over to the Awesome Penny Stock cartel.
It is in the Complaint against Caledonian that included tickers SWVI, GOFF, XUII, and NORX, we find the name Lornex Financial Ltd mentioned as being a key part of the Goff Corp (GOFF) , Norstra Energy Inc (NORX), and Xumanii (XUII) stock promotion schemes. In the SEC filings GOFF said that they had sold a bunch of seed shareholder shares to a group of Irish investors, but in reality those investors never bought any stock. The Irish investors were nominees holding the stock in name only (a scam repeated over and over again by S-1 shell factory schemes). In all three cases Empire Stock Transfer assisted the Defendants in keeping control of all the free trading stock then transferring the stock into off shore accounts at Caledonian, Verdmont, and Legacy. The stock was actually secretly controlled by the insiders like Phil Kueber, Gregg Mulholland, and others who hid their ownership using the offshore accounts. Other facilitators in the scheme included BNY Mellon and Scottsdale Capital Advisors who both show up very often as assisting in the schemes yet are allowed to continue to operate free from prosecution. The seed shareholder stock was at one point all transferred to Lornex Financial Ltd which in turn transferred the stock to various offshore brokerage firms who then in turn used Scottsdale Capital and its clearing firm Alpine Securities for the illegal selling of the stock into the market during the paid promotion. Lornex Financial Ltd is an offshore entity signed for by Cliff Wilkins. Lornex Financial Ltd never actually showed up in the filings for GOFF or NORX or XUII, but the entity did show up in the filings for FalconRidge Oil Technologies Corp (FROT) which also became a big name paid promotion. And guess what. Lornex Financial Ltd shows up in the filings for Steampunk Wizards Inc (SPWZ) sparking this research report.
The Early Set-up
Steampunk Wizards Inc started out as Freedom Petroleum Inc. Freedom Petroleum Inc was incorporated as a Nevada business entity on June 13, 2012 with David Deloach as the incorporator and Thomas Konstantin Hynes of Colorado listed as the CEO.
David DeLoach is the owner of Corp95 LLC. Deloach has been involved in incorporating over 2000 shell companies a year through a mail box center in Dana Point, California according to this article. He also showed up in our research report for Life Stem Genetics Inc (LIFS) as the incorporator of that shell. LIFS got a newsletter promo starting October 30, 2013 and got suspended by the SEC on November 25, 2013 - just days after the paid promotion started.
Thomas Hynes had almost 25 years experience in the oil&gas industry. Thomas Hynes also had several years experience as a stock broker having worked for Northeast Securities Inc from 1997 - 2009, for Meyers Pollock Robbins Inc from 1994 - 1997, for First Affiliated Securities from 1993 - 1994, and for Chatfield Dean & Co from 1991 - 1993.
Northeast Securities Inc had a long list of customer complaints in the late 1990s, but Meyers Pollock Robbins is the brokerage with the most interesting history. Meyers Pollock Robbins shut down in 1997 under major controversy. In April of 2000, 44 people linked to Meyers Pollock were Indicted for carrying out a $176 million boiler room type stock fraud scheme in which brokers lied and used other unethical tactics to get customers to purchase shares in junk stocks. Prosecutors said that from 1992 to 1997, the president of Meyers Pollock, Michael Ploshnick, and its head trader, Marc Swensen, made millions of dollars through the scheme and used offshore bank accounts to hide their profits and launder money. Meyer Pollock Robbins was one of several high profile boiler room type brokerage firms that got shut down around this time including A. S. Goldmen, Stratton Oakmont, Westfield Financial and Hanover Sterling firms. The problems didn't end there for Meyers Pollock Robbins. In 1997 when the firm was shut down it was named as one of many brokerage firms that were controlled by the mob. Under a scheme outlined in a 97-page racketeering and stock fraud indictment, the Bonanno and Genovese families were said to have bribed a small group of brokers at Meyers Pollock to sell stock in Healthtech International. Healthtech stock rose by 250 percent helping the defendants make more than $1.3 million and causing investors to lose more than $3 million.
Thomas Hynes was issued 17,000,000 shares as the control person for Freedom Petroleum Inc until it could be taken public and sold. He was also given a corporate secretary named Nina Bijedic. Ms. Bijedic was from Croatia so it seems quite odd that she and Thomas Hynes knew each other personally. Most likely, the anonymous insiders that really controlled the Freedom Petroleum Inc shell hired Thomas Hynes to front for the ticker until it could be taken public and sold because of his oil&gas and broker experience and chose Nina Bijedic because she was a non-US citizen that could help locate seed shareholders to hold the future free trading stock in name only for the anonymous insiders until they could get those shares into some off shore brokerage accounts to be sold to into the market for huge profits. Ms. Bijedic was issued 10,000,000 shares for her services to hold in name only until the shell could be taken public and sold.
The forward looking business plan for Freedom Petroleum Inc was to raise capital to engage in the exploration and development of an oil & gas property they had acquired in Lewis and Clark County Montana for $15,000 from Summit West Oil LLC. Signing for Summit West Oil LLC was Fred Taylor. This was not the first time we saw Summit West Oil LLC show up in an SEC filing. Summit West Oil LLC also sold a property to Norstra Energy Inc (NORX). According to our research, NORX had links to several other paid promotion tickers including TGRO, ORYN, PSON, NGRC, NHUR, and UTOG. Sure enough NORX did get a big Eric Dany hard mailer/newsletter promotion in April of 2013 pushing up from $.45/share to $1.64/share at its all-time high. NORX would end up getting suspended on June 26, 2013. Later NORX was one of four tickers named in the Caledonian Securities/Caledonian Bank litigation on February 6, 2015. That was the same litigation that included a reference to Cliff Wilkins/Lornex Financial Ltd which sparked this report. On June 18, 2015, the SEC charged NORX, its CEO Glen Landry, and its promoter Eric Dany in separate litigation. This gives us yet another huge link between SteamPunk Wizards Inc and past big name paid promotions.
A few months after setting up Freedom Petroleum Inc, Thomas Hynes got involved in another S-1 shell company called Degaro Innovations Corp (DGRN). DGRN was once on our watch list as a long shot candidate for a future paid promotion. After taking over as the control person of DGRN, Thomas Hynes did a deal to acquire some property with Summit West Oil LLC subsequently giving Fred Taylor a position as a director with DGRN. Thomas Hynes changed the name/ticker to Blue Water Petroleum (BWPC) to better reflect the new oil & gas operations. BWPC has yet to see any good paid awareness. Of note - when Thomas Hynes took over as the control person of DGRN his stock was put into an account in Jamaica.
On September 24, 2012, Freedom Petroleum Inc filed an S-1 to go public and to registered 35,000,000 shares to be sold to a group of hand picked seed shareholders at $.0015/share raising $52,500.
The $52,500 would help pay for attorney fees, accounting fees, filings fees, website expenses at freedompetroleum.com, and some early exploration work, but the company would fall some $200,000 short of the amount of capital needed to cover all of the planned business expenses over the next 12 months.
The attorney that provided the legal opinion for the shell scheme was Scott D Olson. Olson doesn't have any big name paid promotion tickers under his belt yet, but we are currently following a group of 6 mirror infant shells that Olson helped take public which includes Maxima Group Inc (MXMG), Lagoon Group Corp (LGOO), Karnet Capital Corp, Nimtech Corp, Tapioca Corp, and Todex Corp.
The accountant that provided the auditors report for this shell scheme was Silberstein Ungar, PLLC. Silberstein Ungar has done dozens of auditors reports for S-1 shell companies many of which later became paid promotions.
The domain that Freedom Petroleum Inc listed in its SEC filings as its future website location, freedompetroleum.com, was registered as a domain name on August 17, 2012 by Scott Meadow of Meadow Marketing Group in California. The website was never launched and Meadow Marketing Group no longer appears to be in business.
The S-1 filing was approved on December 10, 2012 after needing only one amendment. Freedom Petroleum Inc was given the stock symbol FPET.
After going public, FPET managed to sell 25,200,000 of the 35,000,000 registered S-1 shares to a group of 28 hand pick seed sharehoders to hold in name only.
The company then managed only minimal progress on its oil&gas property while the real plan of selling the shell so the seed shareholders stock could be dumped into the market was put into action.
Change of Control
On January 23, 2014, Anton Lin acquired the 17,000,000 shares held by Thomas Hynes and the 10,000,000 shares held by Nina Bijedic for a mere $27,000 giving him voting control of the FPET shell. Thomas Hynes and Nina Nijedic resigned from all of their positions.
According to his bio, Anton Lin who was from Great Britain also had previous experience in the oil&gas industry and also spent some time serving in the British Army.
Hunter Taubman Weiss LLP was hired as the escrow agent for the share purchase agreement. Hunter Taubman Weiss LLP has offered similar services for several other penny stocks including most notably Santo Mining Corp (SANP) which became a Stock Market Authority promotion in September 2012 and Joymain International Development Group Inc (JIDG) which got some very suspicious and very obvious market manipulation starting in May of 2015 leading to the ticker getting suspended by the SEC on June 15, 2015.
Mr. Lin must have anticipated the acquisition of Freedom Petroleum Inc (FPET) for a while because a full 7 weeks before acquiring the company, on December 7, 2013, Mr. Lin had already registered a new domain for the ticker at freedompetrol.com.
Based on the selling price of the shell and the fact that Anton Lin obviously had no plans of changing the business operations, this was nothing more than the anonymous insiders changing who was being used to baby sit the shell while a new buyer for the shell was sought out.
With a new baby sitter in place the company moved its corporate address to 650 Poydras St., Office 15, Suite 1400 which is just a virtual business center.
Enter Lornex Financial Ltd
On April 28, 2014, FPET entered into an acquisition agreement with a Nevis entity named Lornex Financial Ltd to acquire some oil&gas assets in Alberta, Canada for $400,000 that FPET didn't have. Signing for Lornex was Cliff Wilkins. Since FPET did not have $400,000, this opened the door for the anonymous insiders to use Lornex Financial Ltd as part of their share selling scheme.
Since we have already researched Lornex Financial Ltd. we now know that Lornex Financial Ltd was just a Nevis entity used as a front for stock promotion schemes. We learned through our research at the start of this report that Lornex Financial Ltd was used as a front to help individuals like Gregg Mulholland, Gary O'Flynn, and Phil Kueber sell stock illegally in GOFF, NORX, and XUII.
Besides GOFF, NORX, and XUII, Lornex Financial Ltd was also used for anonymous insiders to sell stock in Falconridge Oil Technologies Corp (FROT) during that paid promotion. On September 5, 2013, FROT filed an S-1 to register 19,461,000 shares to become free trading for sale into the market. Most of the shares were listed in the names of anonymous foreign business entities to hide the true ownership of the stock. One of those foreign business entities was Lornex Financial Ltd.
All of these entities were signed for by nominee officers to hide the true ownership of the shares
The shares were originally issued in 2008 through a private placement offering at $.02/share. Thanks to a 6:1 forward split in 2010, the 3,250,000 shares became 19,461,000 shares at $.00334/share. The shareholder list in 2008 was very different.
Only one of the original owners of the stock still owned their shares in 2014. That's because the original shareholders were just holding the stock in name only until the anonymous insiders could transfer that stock into anonymous foreign entities to sell the stock into the market. Even in plain view of the SEC they still managed to get away with it.
The FROT S-1 filing was deemed effective by the SEC on October 14, 2014 clearing those shares to enter the market. On October 21, 2014 a hard mailer promotion started for FROT helping push the price up from $.80/share to $1.32/share on November 24, 2014. Hard mailers continued to hit into late December but the price was never able to push any higher eventually crashing below $.40/share in January of 2015.
Bottom line is that if Lornex Financial Ltd is involved there is no question that some kind of money laundering activity is going on and so far every example we have found involved a paid stock promotion.
Cancellation of agreements
Barely a month after signing a new asset purchase agreement with Lornex Financial Ltd for an oil&gas property in Canada, FPET abandoned its original property in Montana having determined that the property had no value.
Possibly because of the investigation into Caledonian linked companies including NORX and GOFF some time in June of 2014 (less than two months after signing the agreement) FPET terminated its agreement with Lornex Financial Ltd claiming that the leases would expire too soon to make the properties worth the investment.
New Agreement followed by yet another cancellation
With no properties under its control FPET put together a new agreement on October 10, 2014 with an Alberta business entity called Shalex Corporation that was eerily similar to the agreement it had signed with Lornex Financial Ltd. Once again FPET acquired an oil&gas property in Alberta, Canada for $400,000 it didn't have. It was almost as if the whole purpose of the change was just to get the name Lornex Financial Ltd off the books.
Signing for Shalex Corporation was William R McKay. Bill McKay also runs Wastefixx Systems Inc. A former business partner of Bill McKay at both Shalex and Wastefixx named Malcolm Alexander was named as a director of Innovate Building Systems [now trading as Xterra Building Systems Inc (XTRR)] in April of 2014.
Once again the oil&gas purchase agreement would end up being terminated on April 28, 2015.
FPET was once again back to square one.
This time though it appears that the agreement was cancelled because FPET had found a better direction for the ticker.
One month after the cancellation of the most recent oil&gas acquisition, on June 11, 2015, FPET filed to do a 1:2.5 reverse split combined with a name change to Steampunk Wizards Inc.
The corporate actions confirm that the move away from the oil&gas industry was done because the FPET insiders had found a buyer for the shell which would lead to a change in business operations.
The split and name change got approved on July 2, 2015 and FPET will now trade as FPETD until the end of July when it will become SPWZ.
New Share Count
With the 1:2.5 reverse split now in effect the new share count will look as follows:
Authorized - 100,000,000 shares
Outstanding - 22,181,541 shares
Anton Lin - 11,451,541 shares (restricted)
Seed shareholders - 10,800,000 shares (eventually free trading) - costing just $.00375/share
unknown - 30,000 shares
The small float of just 10,800,000 shares is a sign of the times where getting big volume through paid promotion is not as easy as it used to be. Recently, higher price promos with lower floats have been more successful and SPWZ appears to be catering to this trend.
New Investor Relations
In November of 2014 when SPWZ did its OTC Certification filings it listed MZ Group North America as its Investors Relations company - specifically Derek Gradwell. MZ Group is led by Matthew Hayden.
Other public companies of note that used MZ Group for investor relations include CANV, STTX, OHGI, EFCT, TMMI, HIIT, MILL, LEI, and VYEY. STTX was a former hard mailer promotion, but many of the others have proven to be strong moving lower float big board tickers which gives us some hope that SPWZ could turn into a nice lower float mover in the future.
So far SPWZ hasn't filed an 8k announcing any acquisition or change of control, but the name change to Steampunk Wizards Inc makes it pretty obvious what will happen. We are sure to see an 8K in the very near future announcing a share exchange/acquisition with Steampunk Wizards which is a mobile video game company.
The flagship product for Steampunk Wizards is a game called Bungee Mummy which is already available for download for apple, google play, and android users.
Learn more about the Bungee Mummy game in the following Trailer video:
The CEO of Steampunk Wizard is Brendon Grunewald. Brendon Grunewald previously served as the CFO of 3D Pioneer Systems Inc (DPSM) starting in early 2014. DPSM became a pump&dump ticker in April of 2014 and though it ultimately touted its forward looking 3D printing business operations, at one time the company released a teaser for a video game called Tangled Tut that worked exactly like Bungee Mummy and even used the same characters. The DPSM website still touts the game.
The Chief Marketing Officer for Steampunk Wizards, Joshua O'Cock, also spent time with DPSM as did Steampunk's creative director Christopher Curmi. Other Steampunk team members include: Annabel Arnaud, Shaun Camilleri, Kyle Grech, Simon Nequest, and Mario Spiteri.
The DPSM paid promotion did okay pushing up from $.45/share to $.80/share but was very inconsistent in the price action. After its paid promotion DPSM stopped doing its required SEC filings and saw its price plummet to $.02/share as of Friday's close. It is probably no coincidence that when we did our original research report on DPSM we found that DPSM was closely linked to GOFF through the O'Flynn family and in this research report we have found lots of connections between GOFF and SPWZ. It is also probably no coincidence that it was attorney Michael J Morrison that took the DPSM shell public and Morrison was also the attorney that took NORX public. The links between SPWZ and GOFF and NORX just keep adding up.
The numerous connections between SPWZ and past paid promotion tickers, mainly NORX, GOFF, FROT, XUII, and DPSM, screams future paid promotion. The only thing we wonder about is if all the attention that NORX, GOFF, and XUII got from the regulators might ultimately hurt the chances of SPWZ getting a high profile paid promotion.
The recent reverse split lowering the float to just 10,800,000 shares combined with the hiring of MZ Group for investors relations points towards SPWZ become a nice lower float mover for a decent stretch like some of the other tickers that hired MZ Group did including LEI, CANV, OHGI, and MILL.
For now we'll keep a close eye out for the 8K making the Steampunk Wizard acquisition official then watch for the ticker to start to actively trade.