A second independent investigation of congressional candidate Karl Snow's business and financial dealings concludes Snow may not know how to pick stock investments but was not involved in any illegal or improper activities in dealing with Michael Strand.
Curtis S. Bramble, a certified public accountant in Provo, released a nine-page report about Snow's involvement with Strand Monday. Strand has previously been convicted of stock fraud and income tax evasion.Bramble, at Snow's behest, looked into four issues: Snow's affiliation with Global Oil and Unique Battery Systems Inc.; his involvement in stock transactions with Strand, specifically whether he engaged in a "stock fraud manipulation scheme"; whether Snow properly reported all income resulting from stock dealings with Strand; and whether Snow engaged in insider trading with Strand.
Bramble's conclusion: no improprieties on any counts.
Snow is in Washington, D.C., and has not yet seen Bramble's report. However, his campaign spokesman, Clark Caras, said the report proves what the Snow camp has said all along.
"And that is that Karl has done nothing legally, ethically or morally wrong," Caras said.
Caras said Snow became acquainted with Strand when Strand's LDS bishop asked Snow to review Strand's conviction for tax evasion.
"Karl . . . reviewed the case and came to believe an injustice was done against a young man," Caras said. Civil charges against Strand were later overturned, although criminal charges in the case still stand, Caras said.
Strand asked Snow in 1984-85 to serve as a member of the board of directors of Global Oil, which planned to merge with Unique Battery Systems Inc. to market a "new type of battery." In exchange for serving on the board, Strand offered Snow 100,000 shares of stock in the reorganized Global Oil Co.
Snow bought 11,000 shares of Global Oil stock for $19,545 and 360,625 shares of stock in Classic Mining from Strand between August 1984 and September 1985.
Bramble's report says Snow declined the offer to serve on Global's board of directors. However, on June 28, 1985, the stock was issued in Snow's name anyway.
"There is no evidence to indicate that Snow ever actually received or acknowledged ownership in these shares of stock," Bramble's report states.
The shares were later transferred to "M & L" Investments, which referred to Strand and his wife, Lois. In order to transfer the stock, Strand asked Snow to sign several blank "stock powers" and the backs of some certificates.
Snow never held a position with either Global Oil or Unique Battery Systems, did not perform any services for either company and never received compensation in the form of stock for any services, according to Bramble's report.
Additional shares of stock in Global Oil and Classic Mining were issued in Snow's name during 1985 and 1986, according to Bramble.
"Snow indicated that he knew nothing of these additional shares of stock," the report says.
And, it says, there is no evidence he actually received the shares. In fact, the shares are missing.
Snow sold 2,000 shares of his Global Oil stock in November 1987 for $2,500, $1,636 less than he paid for them in 1985. He reported the loss on his 1987 income tax return. In 1989, Snow determined his remaining Global Oil stock was worthless because it was no longer being traded. He reported that stock as a $15,409 loss on his 1989 tax return.
Snow still owns his original Classic Mining stock.
" . . . we conclude that Snow lost money on his investments with Global Oil Co. and he may yet lose his investment in Classic Mining stock, but in any event, he properly reported all stock transactions for income tax purposes," the report states.
Bramble absolves Snow of "insider trading" in regards to the proposed but failed merger between Global Oil and Unique Battery because the proposed merger was public knowledge.