stock ticker: AMWS

CEO Of American Water Star Inc (OTC: AMWS) is a Notorious Con-Man.

A recent high flyer on the OTC has been American Water Star.  With over 50 mil shares outstanding, this startup water company has a valuation of over $60 mil.  But look who is at the helm of this ship.

Roger Mohlman.the San Diego Granite Man

Before Roger Mohlman was the CEO and largest shareholder of American Water Supply, he was the notorious Sand Diego “Granite Man” who was originally charged with  48 counts of Fraud.

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stock ticker: IPA

Extra Extra Read All About It

Interpharm’s (IPA) Director, Treasurer, Investor Relations, General Council, and Corporate Offices linked to  major Boiler Room Stock Fraud.

On October 16, 2003, the National Association of Securities Dealers (NASD) brought forth legal action against Yankee Financial accusing them of boiler room operations whose victims were unsuitable investors and the elderly.  One of the unsuitable stocks they were pushing on their clients was Western Media Group.
http://www.nasdr.com/news/pr2003/release_03_044.html

http://www.reuters.com/financeQuoteCompanyNewsArticle.jhtml?storyID=3629131&ric=WMGC.OB&infotype=news&compname=WESTERN+MEDIA+GP

Western Media is the Sister Company to Interpharm

Western Media Group has the same address on their SEC filings as Interpharm Corporate Headquarters.  (69 Mall Drive Commack, NY)

Western Media Group is controlled by many of the same people that control Interpharm. (Munish Rametra)

Western Media has the same fax # as Interpharm Holdings

Western Media has the same contact person as Interpharm Holdings (Munish Rametra)

All three directors of Western Media earned a finder’s fee for the merger of Interpharm into Atec.

“The Parties hereby acknowledge that Munish Rametra, Avreo Vuono, James Rose and Konrad Kim acted as finders with respect to the Transaction and shall be entitled to $100,000, in total, payable by ATEC within three business days after the Closing as a finder’s fee” (Filing DEF 14A 5/2/2003)

How involved is Munish Rametra with Western Media and could he be involved with giving stock to Yankee Financial?  Let’s look at the stock dealings between Mr. Rametra and Western Media Group.  Is it ironic that the S-8 stock given to Rametra coordinates time wise with volume in Western Media Group? 

According to SEC Filings,

In November, 2001, the Company issued 1,080,000, 1,035,000 and 900,000shares of restricted common stock to Munish Rametra, Ray Vuono and James Rose, respectively, pursuant to the consulting agreements described above.

In April, 2003, the Company issued a total of 596,528 shares of common stock to Munish Rametra , Ray Vuono, James Rose and David Kafrissen as compensation pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.

In May, 2003, the Company issued a total of 92,449 shares of common stock to Munish Rametra, Ray Vuono and James Rose as compensation pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.

In June, 2003, the Company issued a total 61,634 shares of common stock to Munish Rametra, Ray Vuono and James Rose as compensation pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.

The Insider Selling Continues

Two days before the NASD released the charges against Yankee Financial, Surinder Rametra, the father of Munish Rametra filed to sell another 75,000 shares of Interpharm.  The insider selling of the stock has been relentless and has not taken price into consideration. http://www.nasdaq.com/asp/Holdings.asp?symbol=IPA&selected=IPA&page=holdingssummary

Rametra Is No Stranger to Stock Fraud

Stocklemon believes that Manish Rametra is the puppeteer of Interpharm Holdings.  He signs his name of the filings and takes all investor phone calls.  We believe that he is also pulling the strings of Western Media Holdings.  Lets us not forget that Rametra is no stranger to Stock fraud.  A securities fraud case was settled against ATEK, the predecessor to IPA in February of 2003.  That case was brought against Ashok and Surinder ( yes the same guy who just sold 75,000 shares) Rametra.
http://bankrupt.com/CAR_Public/021003.mbx

Cockroach  Theory

http://www.investopedia.com/terms/c/cockroachtheory.asp
This is a market theory that bad news tends to be released in bunches.  Stocklemon believes that the charges against Yankee Financial is just the start of bad news that will be released about Western Media Group and its principals.  The NASD does not have jurisdiction over companies or individuals, just brokerage firms.  Therefore, they refer potential cases to the SEC or to the Justice Department.  That is why in the stated case; the names of people involved in the companies are not mentioned.

Note:  We are not saying that it is definite that charges will be filed against Rametra or anyone involved with Western Media Group.  We just believe that where there is smoke there is fire.

Why do Boiler Rooms Sell Stock?

Stocklemon does not want to be the judge, jury, and executioner on Western Media, but there are some general reasons why Yankee Financial might have retailed this stock out to their clients.  Generally, the company will provide “cheap stock” to the brokerage firm, thereby allowing the brokerage firm to make the spread between the market price and the price they received the stock.  To the company it does not make a difference because in many cases, the stock is not worth the paper it is printed on.  Thereby, the company is an accomplice in the actions taken by the boiler room and must work with the brokerage firm that is retailing the stock to its customers.

Stock Fraud Has Real Victims

Stock fraud is not a joke and the victims are real.  Munish Rametra has to live with this situation that is printed here verbatim from the NASD complaint against Yankee Financial.  Does anyone involved have a conscience?

Customer DW

32.       In another example, Anderson, a broker in the firm’s Brooklyn branch (who sold customers approximately 4.4 million shares of SSTF for $5.5 million; 1.1 million shares of WMGC for $1.5 million; and 5.2 million shares of GCHR for $498,168), told customer DW, who he knew was an inexperienced investor interested only in conservative stocks, that WMGC was similar to Berkshire Hathaway and would be worth $2.00 to $2.25 a share by June 2002, even though he had no reasonable basis for this prediction.  At the time, the WMGC was selling for approximately $1.00 to $1.25 per share. 

33.       Anderson also failed to mention to DW that WMGC was in poor financial condition and was a very risky investment.  Based on Anderson’s recommendation, DW purchased a total of 65,000 shares of WMGC for approximately $92,000 in four accounts at Yankee, three of which were custodial accounts he established to pay for his children’s education.  The cost of these purchases represented approximately three-quarters of DW’s reported net worth.

Many Red Flags

Beyond the potential problems that might face the Rametra family, Stocklemon believes that Interpharm Holdings is still an overvalued company that is playing a game of smoke and mirrors with the investing public.

The following are some of the red flags that Stocklemon believes were copiously apparent after review of the Company’s 10k filing as of 9/20 2003.

Stocklemon believed that fully diluted there was 69 million shares of stock.  We now find out that the true number is 76,479,009.  This number is before the dillutive S-8 which will affect the following years.

• 50% of the Company’s sales are to two customers.  The first is to the Veterans Administration.  The other is unknown by us.  Regardless, we at Stocklemon believe that this is dangerous for any company to have such concentrated sales.  WHO IS THE OTHER CUSTOMER?????
• Minimal investment in research and development.  For the six-month period, ending June 30, 2003, the expenditures on research and development were approximately $185,600.  Stocklemon believes that this number is completely inadequate to support any real growth.
• No Ownership of Patents or Trademarks.

But How Was the Last Quarter???

Please don’t take our word for it, take a careful look at the table below that was pulled directly from IPA’s 10k.  The net income for the quarter was $243,000, which gave IPA a diluted EPS of the quarter of -.  Yep - , that is a number that is non existent.below .005.

Tobin Smith and Changewave

Stocklemon believes that Tobin Smith had nothing but good intentions when he recommended Interpharm in the Changewave newsletter.  He runs a respectable business and has many good ideas, unfortunately, this is not one of them. This is a bad idea that can cost investors a lot of money when it comes tumbling down. While Smith tells his subscribers to get physical delivery of their certificates, the insiders are selling stock and diluting the company by issuing themselves new stock.  Stocklemon strongly suggests that Mr. Smith rethink his position on this stock and understand that when you lie with dogs, you get fleas.

Conclusion

The poor fundamentals of Interpharm are only superceded by the unsavory actions of their management in both Interpharm and other stocks that are controlled by directors.  It will be interesting to see whether or not Yankee Financial was also involved with Interpharm.  Stocklemon believes that the cockroaches will all come out soon and when they do, who will be left holding their certificates?  Cautious investing to all.

stock ticker: PGOL

Hide Your Wallets..It’s Scott Fraser Time Again..This time he is giving out a 2 for 1 special.

Scott Fraser might be the most indecent newsletter writer in the history of stock promotions.  This month Mr. Fraser has crossed the line as he has issued two reports just as the ink is drying on the Securities and Exchange Commission instituted Cease and Desist order.  On September 25, 2003, the SEC released order on Scott Fraser and the Natural Contrarian. http://www.sec.gov/litigation/admin/34-48544.htm

Here are some of the tidbits of the SEC order

“Between August 2001 and November 2001, Fraser wrote and disseminated five materially false and misleading statements”

“Fraser made false and misleading statements concerning the purported returns of his past stock recommendations in solicitation materials”

“False and Misleading Statement Relating to the Financial Success of Subscribers to the Newsletter”

Ok, we admit, knocking Scott Fraser’s stocks is too easy.  During the past 18 months Stocklemon has profiled 3 stocks covered by Scott Fraser: EYPSF, SBSF, and AOGI.  Since Stocklemon profiled these Fraser stocks, they are down an average of 75%.  Please see the Stocklemon archives for the stories.

Let us not forget that in 2003  Fraser also recommended ZLNK at $1.. currently trading at .21 cents and EDGH was recommended at .85 cents .currently trading at .22

This month, Scott Fraser brings us two stocks: Patriot Gold (PGOL) and Hepalife (HPLF).  Stocklemon has the physical mailed reports mailed by Fraser on each company and Fraser calls each one of these stocks his best stock pick of the year.  Instead of reviewing Fraser’s reports, which are riddled with lies and exaggerations..yes we said LIES, Stocklemon will go show why each company is a lemon.  Thank you Scott for the 2 for 1 special.  We will be sure to send you cigarettes if the government ever sends you to jail.

Hepalife (HPLF)

Shares Outstanding- 53,613,332
Market Capitalization- $140,000,000
Cash in Bank- $63,000

Hepalife is a company that is supposed to discover the artificial liver. with $63k in the bank.  Scott Fraser was given a budget of over $300k to promote Hepalife in his newsletter.

Hepalife is the latest deal by Vancouver Stock Promoter Harmel Rayat.  Mr. Rayat is the majority shareholder of Hepalife.  Who is Mr. Rayat?  Ask the Securites and Exchange Commission. http://www.sec.gov/litigation/litreleases/lr16662.htm. 

HE IS A STOCK PROMOTER

As a matter of fact, the offices of Hepalife are the same offices as were those for EquityAlert.com, Mr. Rayat’s promotion company.

For that matter, the offices of Hepalife are shared with four other companies that Harmel Rayat controls.  Let’s see how these companies are doing so we can guess the fate of HPLF.  All of the below companies share the same small office with Hepalife at 1628 West 1st Avenue, Suite 216 Vancouver, CA.

ETHO-    .25
ETPT-     .24
EDAN-    .25
IPTH-      .0001

Rayat and family print more paper (to themselves) than the New York Times.or in his case the Vancouver Sun.  Mr. Rayat has issued himself and his family TENS of MILLION of S-8 shares of HPLF, options and warrants at an average of $0.07

Who is the new President/CEO?

On September 23, 2003 Hepalife announced that Mr. Arian Soheili is the new President/CEO of Hepalife.  Is he a researcher? Is he a Doctor?  Is he a liver specialist?  No, he is a front man for Harmel Rayat.

Mr. Soheili used to be the treasurer, secretary, and director of Biommune (BIMM).now trading at .0001.  The Rayat family were major shareholders in Biommune.  And in order to keep the streak going, Biommune had a dubious history with the SEC for putting out false news to the public.
http://www.sec.gov/litigation/admin/34-43246.htm

Company Fundamentals

Hepalife has committed $292,727, over the course of 2 years, to the Dept of Agriculture for a 2 year collaborative research agreement.  They only had to put up $97k upon signing of the agreement.   Hepalife does not own any technology.  This $297k is the total amount that they must provide for the next two years.  How much research can really be done for that amount of money?  They have not even tested this on animals yet.

More importantly, artificial liver research is currently being performed by well funded organizations and universities throughout the world.  No stock promotion, no newsletters, no SEC violations, just real research.  Here is a sample list of some research that is years and millions of dollars ahead of Hepalife.

University of Michigan
http://www.umich.edu/~urecord/0102/Sep23_02/liver.html

University of Pittsburgh
http://newsbureau.upmc.com/TX/ArtificialLiverTesting.htm

University of Chicago
http://www.sciencedaily.com/releases/1999/04/990406044124.htm

Glasgow’s Strathclyde University
http://www.pbcfoundation.com/research.htm

Nagasaki University School of Medicine
http://www.japantoday.com/gidx/news166708.html

Stocklemon believes that Hepalife is a classic pump and dump that is being orchestrated by a team that is more than familiar with SEC violations.  Buyer Beware.

Patriot Gold (PGOL)

The second of the Scott Fraser promotions this month is Patriot Gold.  Fraser was given a budget of $416,676 to produce this puff piece for Patriot Gold.  Again, the report is riddled with lies about Fraser and his performance.  It is so bad that even CBS Marketwatch wrote about the lies that Fraser tells.
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B032B2ABE%2DE27E%2D4BFD%2DA358%2D4ACFA5CEDE3D%7D

15.8 million shares outstanding (not including the 13.5 million preferred shares or the 1.4 million warrants)

Market Cap.- $22 million (not including preferred)

Amount paid for mining rights- $12,500

How do you turn $12,500 into $22 million?  Just hire Scott (the liar) Fraser. Pay him half million dollars to write a report and watch the magic happen.

Patriot Gold used to be in the business of Ostrich Farming until they ran out of money.  But then the management figured why deal with Ostriches when we can deal with gold.  Here is a brief timeline of the events in Patriot Gold.

5/1/01    Out of the ostrich business because they did not have any money to continue.

10/20/02 Bruce Johnstone appointed officer and director

10/31/02 The two other directors (Manfred Shultz and Gerald Hinkley) resign as officers and directors of the company.

5/30/03 S-8 filed for 335,000 shares pre-split (of 7.6 or 2.546mm shares)

6/12/03 they issue 13,500,000 Series A 7% Preferred Shares to Bruce Johnstone the company’s sole officer and director

6/13/03 Schultz and Hinkley return the 700k shares (for no consideration? And no explanation is given)

6/17/03 forward split of 7.6 for 1 and name and symbol change

7/21/03 Bruce Johnstone resigns as Officer and Director (just over 1 month after receiving 13.5 million preferred shares)

8/13/03 Sign formal agreement with MinQuest (”unpatented mining claims”?) press release

9/23/03 company adds another 3mm shares to the previous 2.546mm that were filed on

C’mon Guys, is this the old mine lease, S8, then newsletter pump and dump?  You have got to do better than this.  Patriot Gold is not a mining stock. Stocklemon believes Patriot Gold is a scam stock.

Minquest

Patriot Gold acquired this mine lease from a company called Minquest.  Minquest provides mining leases to many small companies that are trading under 25 cents.  Why should this be any different?  We have identified three companies that have acquired leases from Minquest and where they are trading

REM.V ($0.43 Canadian or about 30 cents US)
http://www.newswire.ca/releases/December2002/02/c8976.html

Who is Patriot the company giving the S8 to?  Employee options?  THINK NOT.  According to their own filings, “We have commenced only limited operations.  Therefore, we have no full time employees.

BVT.V ($0.00)
http://dm-productions.com/bonaventure/MinQuest_pr1.htm

Miranda Gold Corp. (.14 cents on the Pink Sheets)
http://www.mirandagold.com/imperial.htm

Conclusion

Do not believe us, just read the SEC or the Mark Hulbert report on Scott Fraser.  His paid research has done much harm for investors and Stocklemon believes that both Hepalife and Patriot Gold will both face the same fate as the rest of the Fraser lemons.