Fraud Watch: A Virtual Reality for Investors

October 1st, 2009
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The SEC charged Florida-based technology company 3001 AD, three of its principals and three former sales agents this week for making fraudulent and misrepresentative offers to investors. The company’s principals include Jimmy L. Barker, Robert J. Ladrach, and Marc S. Rifkin. The virtual reality technology company allegedly misled investors about upcoming steps to take 3001 AD public, about high-profile business relationships with companies like Microsoft and Apple, and about the promising nature of 3001 AD’s products. The defendants also “repeatedly failed to disclose the excessively large sales commissions to investors,” according to the SEC report: the 8 percent sales commission stated in the company’s offering materials was in reality up to five times higher.

The defendants reportedly promoted an imminent Initial Public Offering to investors and even issued a press release about going public, when in reality 3001 AD had taken no steps to even register for an IPO. The SEC also claims that the representatives of the company falsely presented 3001 AD’s relationships with prestigious technology giants like Microsoft, Apple and former Disney CEO Michael Eisner. After being approached by 3001 AD both Eisner and Microsoft had in fact expressed no interest in a partnership with 3001 AD, while Apple had never even received a game system that the defendants claimed the company was reviewing.

Through these misrepresentations and “a maze of unregistered offerings,” 3001 AD raised approximately $20 million, primarily through telemarketing, from 500 investors around the country. Glenn Gordon, Associate Director of the SEC’s Miami Regional Office, stated that “3001 AD promised a profitable future [...] but instead was merely creating its own virtual reality for investors.”
For Detailed Investor Profiles on these Investors, click below:
3001 AD
Related People: Jimmy L. Barker; Marc S. Rifkin; Robert J. Ladrach
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News

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