MIAMI, Feb. 13 (UPI) -- The management of a Kentucky-based oil and gas firm whose shares have been heavily promoted at offshore conferences took evasive action when creditors filed a lawsuit seeking $5 million.
They set up a new company operating from the same offices which then 'bought' the assets of the existing firm -- staff and all -- in a deal paid for mostly with a loan from the seller. The buyer then quickly defaulted on the loan repayments, causing the seller -- which the buyer continued to manage -- to file for bankruptcy in Kentucky.
The seller, Robo Enterprises Inc., and the buyer, Sunclear Energy Inc., seem to be mirror images of each other. Shares in both firms are being sold to the public and a leading figure in both business is 52-year-old businessman David G. Rose. The similarities even extend to both firms sponsoring a NASCAR racing team headed by Rose's son, Brian Rose.
Now Robo's main creditors -- three elderly Americans -- are investigating whether the complicated transaction constituted a fraudulent conveyance of assets so Robo could avoid paying them.
The transfer of assets happened a few months after Ronald, Delores and Franklin Daringer filed a civil lawsuit against Robo, Rose and others alleging they were defrauded of $5 million in an investment scam.
It is the latest in a long line of controversies surrounding Robo and Rose, who denies any wrongdoing and states that all actions were fair and above board.
Robo and/or Rose have been subject to regulatory warnings in several states in the U.S. over many years involving the allegedly illegal sale of securities.
One of these orders was issued on July 14, 1998, by the Wisconsin Department of Financial Institutions, which accused several parties, including Robo and Rose, "a.k.a. Sam Tooley", of securities fraud.
Additionally, the Superintendency of Banks in Panama issued a warning against Robo on March 27, 2001, before Rose was due to speak at an investment seminar of which Robo was listed as a co-sponsor.
Rose has also promoted Robo securities at offshore investment seminars held by the Institute of Global Prosperity, whose events have become known for the promotion of get-rich-quick schemes to attendees.
Like Rose, the President of Sunclear Energy, 71-year-old Hugh F. Sackett, also has a history of alleged illegal activity involving the sale of securities.
In 1986, the Securities & Exchange Commission filed a lawsuit against Sackett alleging he participated in a fraudulent scheme to sell unregistered securities of American Principals Holdings Inc.
The SEC's complaint alleged that, from 1979 to 1984, Sackett helped to sell limited partnership interests and debentures that raised in excess of $90 million from at least 2,500 investors.
The complaint further alleged that Sackett caused American Principals Holdings to make "material misrepresentations and omissions concerning the actual use of investors' funds."
In 1987, Sackett consented to an order enjoining him from violating SEC laws and regulations.
On March 10, 1993, Sackett filed for bankruptcy at the U.S. Bankruptcy Court for the District of Massachusetts, which was terminated on August 9, 1993.
He was soon back in court, however, with a state tax lien of $28,596 being filed against Sackett, Cheryl Kirchner and Fred L. Kirchner in Sacramento County Court, California on May 13, 1994.
More recently, Nevada-registered Financial Harbor Ltd., of which Sackett is president, was named as a defendant in a civil lawsuit filed in California that accuses several defendants of operating a Ponzi scheme that "misused at least $60 million in investor funds" which, inter alia, allegedly went to buy racehorses and on personal expenses.
The lawsuit was filed on December 27, 2001, at the U.S. District Court for the Central District of California by Robb Evans, as Receiver for TLC Investments and Trade Co.; TLC America Inc., d.b.a. Brea Development Company; TLC Development Inc., TLC Real Properties RLLP and their subsidiaries and affiliates.
Defendants are Financial Harbor Ltd., of Nevada; Robert J. Kopp, who is Financial Harbor's Secretary; The Chamber Group Inc., of Arizona; Thomas Prescotti, Management Information Systems Inc., of Massachusetts; Robert Saxe III, Richard H. Morrow, Alice Cranford, Eagle Planning LLC, of Washington; and Mark Steffan.
Financial Harbor and Kopp's roles in the scheme were as agents for TLC Entities, according to the complaint.
The plaintiffs claim that "since at least 1996, TLC Entities have offered investment programs pursuant to which TLC Entities sought to raise funds from investors purportedly for the purpose of purchasing distressed real estate, tax lien certificates, tax liens, tax deeds and/or other purported investments related to real estate for the purpose of acquiring real property for rental and/or for eventual resale at a profit." It is alleged that the much of the funds were misappropriated.
As with Robo Enterprises, securities in Sackett's Sunclear Energy are also being sold to the public, including through a $12 million Convertible Debenture offering that is currently underway, according to a Web site at sunclearenergy.com.
Sunclear claims to have associates in the Bahamas, St. Vincent, Costa Rica, Canada, the Czech Republic, Switzerland, Austria, Germany and Australia.
There is no mention of Sackett's or Rose's checkered pasts on the web-site and no mention of the bankruptcy of Rose's previous firm, Robo Enterprises.
Instead, visitors to the site are told of "Mr. Rose's success with Robo Enterprises" and are informed of his "many accolades for his local, national and global charity efforts."
"He continues to be an active supporter of his favorite charities, the Make-A-Wish Foundation, Global Village Market, Boys and Girls Club and Feed the Children," the site adds.
Global Village Market is operated by Bahamas-based Yank Barry, who was sentenced to six years in prison in Canada in 1982 for extortion and is currently awaiting sentencing in Texas after recently being convicted of bribery.
GVM's shares were listed on the sham World Investors' Stock Exchange, which was part of a massive investment fraud carried out by the Caribbean-based First International Bank of Grenada, which is now in liquidation with liabilities of $473 million.
Sunclear's Web site also does not mention that Sunclear itself might become insolvent if it is held liable for Robo's debts by the U.S. Bankruptcy Court for the Western District of Kentucky.
In a filing at the court, Sunclear states that it faces "its own financial challenges" and casts doubt on its ability to stay afloat should it be held liable for all of Robo's debts and not be allowed to offset monies it claims it is owed by Robo against any liability it might have to the bankrupt firm.
In response to questions from United Press International, Steve Stengell, Sunclear's media spokesman, issued the following statement: "In 2000, Hugh Sackett, an experienced financial services and oil and gas industry senior consultant and senior executive, perceived an opportunity to develop a mid-level oil and gas industry company. Sunclear Energy, Inc. was formed in 2000 for that purpose, with Mr. Sackett as the sole shareholder and sole officer and director. Mr. Sackett had previously provided consulting services to Robo Enterprises, Inc. ("Robo") and various other business ventures of David Rose, founder of Robo."
"Through conversations with Mr. Rose, Mr. Sackett became aware that Mr. Rose wanted to scale back his business efforts, and was looking towards relocation to Florida. Mr. Sackett was also aware that Mr. Rose was, at that time, frustrated by the regulatory and compliance issues that an independent oil and gas producer faces in a continual cycle of financing activities."
"In late summer 2000, Mr. Sackett approached Mr. Rose with an offer to acquire, through Sunclear Energy, certain assets of Robo, and to assume certain liabilities of Robo."
"Over the course of several weeks, a transaction was negotiated. In October 2000, a definitive agreement was executed and the transaction (the "Robo Transaction") closed."
"In the Robo Transaction, Sunclear purchased and was assigned tangible and intangible assets that were valued at more than $4 million dollars.
"In return, Sunclear assumed specified liabilities in the amount of approximately $1.8 million, paid more than $500,000 in cash, and issued its promissory note in the amount of approximately $1.8 million."
"Since the closing of the Robo Transaction, and prior to Robo filing for a Chapter 11 bankruptcy proceeding, Sunclear made all required payments under the note, through July 3, 2001, and had also advanced unsecured loans to Robo of almost $500,000 to meet unexpected expenses occurred in Robo's operations."
"In the period since the Robo Transaction, Sunclear has completed development of several significant oil and gas drilling projects, concentrating its efforts most recently on projects in the Gulf Coast area of the United States, and at target depths of 10,000 to 15,000 feet, which are projects substantially more complex and expensive than the projects typically undertaken by Robo."
"Sunclear has in place a seasoned team of financial executives, geologists and oil and gas industry personnel. Sunclear has begun to offer its programs through an NASD registered broker-dealer, and is working toward the development of a broker-dealer network."
"David Rose serves as 'chairman emeritus' of Sunclear, a position that is to be filled by a person with experience in the oil and gas industry who is not an officer, director or employee of Sunclear. In that position, Mr. Rose has no authority or control over Sunclear, but serves in an advisory capacity."
"Sunclear is not responsible for and does not control the activities of David Rose or any new ventures undertaken by him, nor does David Rose control Sunclear."
"As a matter of good business practices and in the ordinary course of business as a creditor, Sunclear is pursuing a claim against Robo in the bankruptcy proceedings with respect to amounts advanced in excess of required payments under the note."
David Marchant is publisher of OffshoreAlert, offshorebusiness.com. The phone number is (305) 372-6267. Address: 123 S.E. Third Avenue, PMB No. 173, Miami, Fla. 33131.