New York Post
Jan 17 2005

STUN SHARES HYPE

By CHRISTOPHER BYRON

January 17, 2005 — Two weeks ago, stock in a stun gun company was
widely viewed on Wall Street as the hottest ticket in town, with just
a handful of previously unknown penny stock outfits soaring on the
shirttails of Nasdaq-listed Taser International Inc., to a combined
market value of more than $1 billion.
Yet by the end of last week the gig seemed to be up, with pink sheets
high-flyer Stinger Systems Inc. leading the way down with a one-day
drop of more than 40%. Through it all, one could hear again that
familiar tell-tale sound of hype, hope and hot air wheezing from yet
another penny stock soufflé gone flat.

It’s a sound that investors are hearing more and more these days as
the growing workload of legislation like the Sarbanes-Oxley Act and
the Patriot Act has caused the Securities and Exchange Commission to
increasingly ignore regulation of the penny stock market. Result: a
spreading plague of financial world squeegeemen in the gutters and
alleyways of Wall Street.

Last week in this space we looked at a bungled SEC effort to take on
a gang of penny stock pump-and-dumpers behind a North Carolina outfit
named Absolute Health and Fitness Inc., which claimed to own a
regional network of fitness clubs.

Now, at least one of the players in that affair has surfaced in the
stun gun bubble. He is a Casselberry, Fla. ex-con and registered sex
offender named Orville Baldridge, who served as the promotional
muscle behind Absolute Health and Fitness Inc. at the turn of the
decade. Baldridge has now reappeared as the oomph behind the shell
for a penny stock outfit called Law Enforcement Associates Corp.
(LENF), whose stock price had soared 1,693% since last autumn on stun
gun hype from a group of paid stock promoters in Vancouver.

LENF’s SEC filings are a hodgepodge of incomplete and conflicting
information. In one bizarre case, the filings indicate that nearly 22
million shares of stock in the LENF shell – known as Academy
Resources – were issued by a boat moving company that had no apparent
power to issue them in the first place.

According to the filings, LENF began life in May of 1998 as a Ne vada
penny stock shell called Academy Resources, Inc., with 5.45 million
shares outstanding. Management consisted of a one-person board of
directors, with the seat being occupied by a man named Nolan Moss.

The filings don’t provide any additional details about Moss, but if
the SEC had wanted to check him out, they would have found Moss to be
a Vancouver-based penny stock crook who had already been fined
$30,000 by Canadian regulators in a separate stock-rigging scheme.

Want more? Well, an exhibit to one of the SEC filings shows that in
June of 2000, a mysterious Nevada outfit called “Academy Yacht
Deliveries Corporation” popped up out of nowhere and purported to
issue 21.8 million shares of “Academy” stock to acquire a
Delaware-incorporated “development stage company” called Myofis
Internet Inc.

Nor does this mishmash of alleged facts explain why a company
identified only as “Carcinotek Internet, Inc.” would surface as well
in the deal as a joint signator alongside Myofis.

In fact, the appearance of Carcinotek simply underscores the
duplicitous and ragged way LENF seems to have been run from the
moment of its birth – as a toy for penny-stock promoters whose
handshakes are often worthless and whose contracts get signed in
disappearing ink.

In reality, Pasadena-based Carcinotek was not an Internet company at
all, but an Armenian-controlled cancer research outfit that got
shoehorned into the June 2000 merger of Myofis and the Academy shell
in the apparent belief that the Armenian bunch would agree to become
what amounted to financial tinsel in the deal.

Not surprisingly, the Armenians failed to play ball, leaving what had
plainly been set up as the first step in a penny stock promotional
hustle to go forward with not even a hint of a reason why the owners
of the Academy shell would give away 80% of the shell’s stock acquire
an “Internet” business having no value at all.

In any event, once the merger was consummated in June of 2000, Nolan
Moss surrendered his seat on Academy’s one-person board to a fellow
named Guy Cohen as Myofis’s designated hitter.

Documents filed with the SEC in July of 2002 try to gloss over this
entire period, stating only vaguely that by the end of 2000 the
Myofis Internet project hadn’t gotten off the ground so the
investment was “written off.”

Really? Archived Web pages obtained from a data collection research
project involving the Library of Congress and the National Science
Foundation show that a Web site called Myofis.com in fact went live
literally days after the company claims it was shut down. What’s
more, by May 2001 the site had morphed into a promotional vehicle for
penny stocks, called Streamingnews.net, with the Web site being
registered to one Guy Cohen, who promptly began using it to pump
LENF’s share price.

In January 2002, Academy Resources merged with Law Enforcement
Associates Corp., a privately-held North Carolina maker of various
sorts of policing equipment and espionage gear.

To acquire the family-owned business, which had been run by a North
Carolina State Senator named John Carrington, the shell’s owners
issued 10 million more shares of stock in the shell, complete with a
befuddling and selectively applied one-for-three reverse stock-split
designed to whittle down the holdings of the Myofis bunch while
leaving Carrington himself untouched.

So, who is John Carrington? Over the years, North Carolina newspapers
have reported on sales of paramilitary equipment by his company to
oppressive foreign regimes such as those of prewar Iraq and
Apartheid-era South Africa.

And just this last April, LENF was raided by federal agents seeking
evidence to explain how equipment manufactured by the firm had wound
up illegally in China. Yet the company has so far not issued a Form
8K to report this matter to the general public and no one at the SEC
seems to have asked that it be done either.

LENF’s newest cheerleader is a Vancouver-based stock promoter named
Dawn Van Zant, who waves her pom-poms tirelessly on behalf of LENF
and her other clients via more than three dozen different penny-stock
pumping Web sites she owns and operates.

And looming in the distance behind all of these characters are the
shadowy outlines of the penny stock world’s Mister Bigs, who are a
story for another day. But if the SEC lacks the manpower – or the
moxie – to rid Wall Street of its squeegeemen and penny stock
graffiti, why bother pointing out even bigger battles after that?

The penny stock market is a Wall Street alleyway that simply must be
hosed down, and so far no one’s doing nuttin’. Your tax dollars? Go
figure.