}

Saturday, February 23, 2019

DAVID DAMANTE WILL TURN 41 IN FEDERAL PRISON: “Substantively Reasonable”; 9th Circuit Court Of Appeals Upholds Damante's 14-Month District Court Sentence, 12-Month Post Release Supervision

David Damante, who appealed his current 14-month revocation sentence to the U. S. Court of Appeals for the Ninth Circuit in August 2018, learned he won't be sprung in the spring.

In a memorandum filed February 21, 2019, the Ninth Circuit affirmed the lower court's sentence, stating “the 12-month term of supervised release is substantively reasonable because the nature and number of Damante’s violations”.


Damante, according to official U. S. Bureau of Prison records, is   scheduled to be released from a federal prison in Tucson on June 20, 2019. In his 2018 petition, Damante contended that his sentence was substantively unreasonable. He argued that the district court acted unreasonably in imposing an above-guidelines custodial sentence after crediting his evidence concerning the threats against him, and in imposing a 12-month term of supervised release for “technical” violations. 

Damante turns 41 on March 2.

Unhappy birthday, schmuck!

Wednesday, February 13, 2019

PHOENIX RISING...OR JUST ANOTHER PIGEON DROP? Only Two Weeks After His June 6, 2018 Hedge Fund Case Sentencing, Robert Buckhannon Had Already Formed “Phoenix Rising Ventures LLC”...To Cheat Investors, Maybe?


If someone told you that they had a pedal bicycle that could go faster than the fastest motor cycle on the planet would you call that selling optimism…or a scam?

Robert Buckhannon, who was recently indicted in federal court on various charges relating to a “conspiracy to obtain money by means of false and fraudulent pretenses” for allegedly converting business loan proceeds that were intended for Battle Creek’s On Deck Sports Bar & Grill, has already formed a new company.

 






The Colorado entity, Phoenix Rising Ventures LLC, was registered by Buckhannon on June 20, 2018 using an address in Bradenton, Florida directly linked to his parents—official Manatee County property records reveal they own it.

So Buckhannon, fresh from his sentencing in a Las Vegas federal courtroom for his role in a hedge fund fraud, where he received a three-year probation sentence in return for pleading guilty to one count of conspiracy to commit wire fraud—was already working his next con.

Too bad no one noticed...oh wait, I did!


Be warned that harm is coming to your town, and it looks like this!

Thursday, February 7, 2019

BUCKHANNON & PAGANES & SHLAIMOUN, OH MY! Three Amigos Of Fraud Team Up Again; Exclusive Story Of Their New Investment Fraud Scheme...WITH DOCUMENTS THAT COULD PUT BUCKHANNON BEHIND BARS!





EXCLUSIVE: IS ROBERT BUCKHANNON LOOKING TO SCAM POTENTIAL INVESTORS IN ZIA SHLAIMOUN'S CRYPTOCURRENCY FRAUD SCHEME? Less than three months after Robert Buckhannon was indicted in federal court on various charges relating to a “conspiracy to obtain money by means of false and fraudulent pretenses” for allegedly converting business loan proceeds that were intended for Battle Creek’s On Deck Sports Bar & Grill, he visited Michigan with a new investment scam—and two familiar partners in crime: Chris Paganes and Zia Shlaimoun.


In my opinion, the actions violate the terms of Buckhannon's current release on federal fraud charges, and the product (Shlaimoun's purported KryptMiner PowerDrive cryptocurrency mining system) doesn't really exist. 

Buckhannon, and alleged co-conspirator Kelly DeMoss, were each charged on August 8, 2018 with a total of five counts: one count of conspiracy to commit wire fraud, one count of wire fraud and three counts of money laundering. If convicted, maximum penalties range from 10 to 20 years, plus mandatory restitution.

“A SENSIBLE PORTFOLIO WOULD INCLUDE DIVERSITY OF ASSETS” 

In the new scam, documents provided exclusively to Glistening, Quivering Underbelly reveal Buckhannon (left), as recently as late November 2018, was actively soliciting investments, promoting six-figure opportunities in a cryptocurrency mining company, with a purported return-on-investment Buckhannon pumped in a nine-page presentation deck and a financial projections spreadsheet. 


The activity Buckhannon undertook, jointly with partners Paganes and Shlaimoun, had its roots in 2018 with the launch of Shlaimoun's KryptMiner PowerDrive and PowerServer system. 

In addition, and more importantly, Buckhannon's investment-related activities appear to violate not only the current terms of bond in his West Michigan federal case (“I agree not to commit any offense under 18 U.S.C. § 1503 (influencing or injuring an officer, juror, or witness); 18 U.S.C. §1512 (tampering with a witness, victim, or informant), or 18 U.S.C. § 1513 (retaliating against a witness, victim, or informant), or any other federal, state or local criminal law.”), they may also violate the terms of supervision in his hedge-fund related plea deal (Buckhannon plead guilty on June 6, 2018 to one count of conspiracy to commit wire fraud in return for a three-year probation sentence).

Buckhannon, a convicted felon, is not licensed or registered in any state as an investment advisor, and he still owes the SEC nearly $1.5 million he agreed to pay in order to settle a 2010 complaint.

The SEC complaint alleged that between 2008 and 2010, Buckhannon and his partners commingled investor money and looted and bankrupted the hedge funds by steering millions of dollars to themselves. 

Buckhannon was accused of secretly funneling at least $341,000 of investor money to his family and associates. He spent $60,000 on an engagement ring for his fiancé, Marlena Michaels (Zia Shlaimoun’s cousin) and $80,000 for a down payment on a Las Vegas house. 

Buckhannon's crony, Michigan resident Chris Paganes, (left) was an unindicted co-conspirator and served as a trustee for the two Buckhannon-connected hedge funds. 

According to SEC documents, the “wrongdoing that underlies Paganes’s injunction occurred from August 2008 to at least May 2009 while he was a managing member of Imperium Investment Advisers, LLC (Imperium), an investment adviser registered with the Commission. During part of that time, he was also affiliated with Maximum Financial Investment Group, Inc. (Maximum), a broker-dealer formerly registered with the Commission. Maximum and Imperium served as trustee for a Bradenton, Florida-based hedge fund, Vestium Equity Fund, LLC (Vestium). 

Imperium and Vestium were parties to a trust indenture agreement that obliged Imperium to hold investor funds in a custodial account and to monitor Vestium’s investments to ensure the fund used investor proceeds only for uses specified in the fund’s offering materials. The trust indenture was incorporated into Vestium’s securities offering materials. 

Paganes also was the co-signatory for Vestium’s custodial bank account. 

He approved hedge fund transactions and disbursed investor funds for uses not permitted by the fund’s offering documents or the trust indenture. 

Paganes had a direct, undisclosed financial interest in at least one of the transactions he approved. This transaction created an undisclosed conflict of interest between him and the fund’s investors.”

In November 2011, Paganes was ordered by the SEC to “disgorge $650,000 and and prejudgment interest of $90,339.19 and to pay a $650,000 civil penalty". 

Paganes and his wife declared bankruptcy on November 30, 2012. Paganes' debts were officially discharged on June 13, except for his SEC fines and penalties, which remain unpaid.

California resident Zia Shlaimoun, (left), has been a crony of Robert Buckhannon for at least ten years.

On April 1, 2009, Robert Buckhannon, then CEO of Vestium Management Group and a managing member of Arcanum Equity Fund (AEF), wired $20,000 out of an AEF account to Infinifund Ltd. 

Strange, especially when less than six weeks before, (on February 24, 2009), Buckhannon had sent an email to the other AEF managing members, Terry Rawstern, Dale St. Jean and Gregory Tindall, telling them that pending investor redemption requests “can be strung out for a bit” while they pursued other investment opportunities. 

According to federal court documents, Buckhannon wired an additional $200,000 to Infinifund on June 30, 2009. 

On August 18, 2009, Buckhannon sent a letter to the Funds' investors explaining the Funds lacked the necessary capital to pay investor redemptions. 

However, the very next day, Buckhannon transferred $2.5 million of Arcanum's funds to Shea Mining. 

When questioned in November 2009 by the Funds’ controller regarding the existence of an agreement authorizing or explaining the purpose for the disbursements, Buckhannon explained that Infinifund’s sole principal, Zia P. Shlaimoun, was the “cousin of his fiancé Marlena Michaels.” 

But as I revealed in a March 10, 2014 post titled “Serial Monogamy in the Cereal City”, Buckhannon wasn’t being entirely truthful—Buckhannon and Michaels had actually married on May 15, 2009. 

Buckhannon initially told the controller to classify the $220,000 payments to Infinifund as “expenses related the AEF’s August 2009 investment in Shea Mining & Milling.” 

However, in March 2010, the controller stated that Buckhannon told him to reclassify the expenses as “legal expenses for AEF”.


Detailed extensively (and exclusively) on this blog, Shlaimoun formed a Delaware corporation (Intellogence Inc.) on January 25, 2018. 

Shlaimoun originally used 'intellogence.com' to promote the KryptMiner equipment, before establishing a dedicated KryptMiner site. (Neither site is presently supported.)

Zia Shlaimoun, serial fraudster
Shlaimoun, who was introduced to readers of this blog through my coverage of Battle Creek's “crooked chiropractor” Robert Buckhannon, was an associate of Buckhannon’s during his days as the head of two now-defunct Bradenton, Florida-based hedge funds, Arcanum Equity Fund LLC and Vestium Equity Fund LLC. 

In a federal court document filed January 31, 2019 on behalf of a party seeking to recover $960,000 Shlaimoun defrauded via a “concocted leveraged investment transaction”, Shlaimoun was described as a “serial fraudster” who had taken over $11,000,000 from “unwitting victims” in a 2010 investment scam.

Over the last three years, Buckhannon and Shlaimoun launched (and crashed) several businesses, including a clinical testing laboratory scheme, GoldStar Laboratories LLC, that previously had locations in five states, including Michigan, Ohio and Missouri. (The company's website, goldstarlab.com, has been disabled.) 

On August 22, 2016, Buckhannon and Shlaimoun submitted declarations on behalf of an alleged California-based Goldstar Laboratories LLC/Advanced Biomedical, Inc. seven-figure testing lab acquisition. (NOTE: Although Goldstar Laboratories LLC conducted business in California, it never legally existed as a California business entity.)

An attorney representing Advanced Biomedical, Inc. filed evidentiary objections on August 31, 2016 to the Shlaimoun/Buckhannon declarations, extensively detailing doubts on the duo and the credibility of their declarations. 

WE ARE DEVELOPING ON TIME AND ON BUDGET AT PRESENT, BUT JUST LIKE CARS, THE MORE MONEY YOU CAN SPEND, THE FASTER YOU CAN GO 

At 2:51pm on Wednesday, October 24, 2018, Robert Buckhannon (using the email address 'rbuckhannon@gmail.com') responded to an inquiry under the subject line 'Material'. 

Copying his crony Chris Paganes ('cpaganes27@yahoo.com' email address), who referred the prospect, Buckhannon wrote: 

I got an email back from you a week ago asking a couple questions about our current project. I would love an opportunity to talk to you. Please feel free to reach out by phone or text to set up a time that I can talk with you my business partner who is the electrical engineer who designed the board in the technical officer who’s been dealing with crypto currency for five years. Would love The [sic] opportunity to speak with an early adopter like yourself and see if you have some interest in a current project.

Several days later, Buckhannon's prospect responded with questions:

1. The material you sent does not specify the cost of buying what you are selling. 

2. Am I correct in that what you are actually selling is 1 Powerserver unit (per the price you specify in question #1)? 

3. Do you have any Powerserver’s currently running and if so, can you give any details regarding their results? Because I assume the projections are just that – projections, so I would assume nothing is currently operating but please clarify. 

4. I don’t see anything online regarding this project so does that mean that it is still in its infancy? 

5. Similar to question #4, what is the plan from this point forward? For example, are you looking for investors, are you looking for marketing this opportunity, are you looking for beta testing? 

Buckhannon's October 27, 2018 response follows:

1. Cost and Configuration: 

i) Each Power Server consist of 128 Cards utilizing 16nm Field Programmable Gate Array (FPGA) technology, running the SHA-256 algorithm at 20 THash/Sec 

ii) The Cost for each Card is $2,950. 

iii) The business model is to sell cards and then host and manage the process. We will then do a 50/50 split of rewards after energy cost.
a) anticipated minimum sales size is 8 Cards. 
b) There is a 8% Sales commission figured into the Sales Price 
c) Not physically delivering cards is to protect the details of the engineering and IP of the Card 

2. To answer your question #3, we do not have a completed 128 Power server unit running. 

We do have 8 Cards running independently. 2 are mining. The others are being used to Maximize efficiency and debug/optimize the firmware. 

The units running individually and not yet optimized are running at 17-19 THash/s running SHA-256. We take delivery of our first "production" run of cards in early November. The PowerServer and all other "Hardware" has been engineered and built. 

After successful deployment of the first cards we will do a more substantial run. 

3. Questions 4 & 5. Our plan is to sell enough $50,000 - $350,000 purchasers to build out 20 PowerServers. Once that is done and we have real production data for the the top 10 Crypto Rewards, then my plan is to grow both internally as well as approach some larger money that I have worked with in the past. 

The development plan is very fluid at this point. 

We are developing on time and on budget at present, but just like cars, the more money you spend, the faster you can go so I am very open to any suggestions. 

100 PowerServer Farm could be produced for around $25 Million. (That is the number for any appreciable volume discount.) 

We have talked to several groups in that range, but until Unit 1 is operational I do not have access to an investment of that size. 

Post operations I have those potential investors. 

I believe that mining coins other than BTC, i.e Monero, Litecoin, Etherium etc. will be much more profitable. The fact that we can change the task in Minutes is a huge advantage over fixed math systems. We have proof of concept of 6 other antilogarithms, but have not optimized them yet and probably will not until we have a full hardware array operational. 

I hope this was helpful. I am available to speak at your convenience. 

I am at my place in Las Vegas now as I am allergic to cold weather and closed up my Denver place. 

Looking forward to speaking to you.

Later, on Friday, November 9 at 10:49am, Buckhannon sent this email to the prospect:

I will be in Detroit November 15 16th and 17th. Love to get together for a coffee or a beer while I’m there to discuss this project with you. Rob 

Robert Buckhannon included a contact number, 310-654-4155, that is directly linked to SuperBio, a company Buckhannon and his brother Ronald formed to sell Cultiv1260 fertilizer.

All the original documents, including the emails published and others that weren't, have been provided to federal law enforcement officials.

Here is the presentation deck, followed by the financial spreadsheet: