A Murray secretarial services company called Executive Services has drawn the interest of law enforcement investigators as far away as London and Geneva.
That's because Utahn Michael Wright, who authorities believe was involved with alleged mastermind Thomas F. Quinn in an international stock swindle, is known to have worked out of Executive Services offices. Wright and others have been named in IRS search warrant affidavits as targets of a criminal fraud investigation into the creation and manipulation of several Utah-related blind pool stocks. As part of that investigation, Executive Services was searched last fall.Officials from the IRS, who conducted the search, won't say what they found, but the list of records they were seeking is revealing.
Some of the names on the search list, like Falcontrust Financial Ltd., of Geneva, Switzerland, are those of alleged European boiler rooms - high-pressure telephone stock brokerages - that sold overpriced stocks to investors worldwide until they were shut down last summer.
Others - like GSS Venture Capital Corp., Messidor Limited and Max Inc. - were among the Utah-born companies whose stock was sold overseas.
A look at just one of these companies and the people associated with it gives an idea of the tangled web of connections and interconnections that investigators are struggling to unravel.
Take Max Inc., for example.
Max Inc. was on the Executive Services search warrant list under a previous name - Sherwood Financial Ltd.
Serving as Sherwood's attorney at one point and also as an officer was Orem lawyer Gary Blatter, who has represented Wright in the past. Blatter referred questions about his involvement with Sherwood/Max to his own attorney, Peter Shaeffer.
Shaeffer said Blatter was asked to be Sherwood's lawyer by former Executive Services employee Debby Romney, who was Sherwood's president at the time. Shaeffer wouldn't say whether Sherwood was Wright's company. Shaeffer stressed that Blatter had always been prompt to file appropriate disclosures with the Securities and Exchange Commission and to repudiate "unauthorized communications" and "misrepresentations" about the company's stock by entities in Europe.
The stock was traded in Europe both as Sherwood and later as Max Inc., the name it bore after a purported merger with a Beverly Hills talent agency.
Before the talent agency merger, however, Sherwood had planned to acquire a different company, GSS Venture, one of the Utah-related blind pools with an alleged link to Quinn. But the SEC's Chicago office squelched that deal when it alleged that GSS and Sherwood had violated federal securities laws in the proposed acquisition. The SEC temporarily suspended their trading. Without admitting or denying guilt, the companies consented to a permanent injunction against them.
Subsequently, the California talent agency's president, Lorraine Dillon, decided to merge with Sherwood because her growing business was short of cash. She told the Deseret News the deal proposed to her by Sherwood's majority stockholder, Robert Matzner, a commodities businessman she'd met through New York friends, had looked good. But she said Sherwood never came up with the money it was supposed to provide and the merger was not consummated.
Shaeffer disagreed. He said the merger was completed and Sherwood did provide nearly $200,000 to the talent agency. Sherwood became Max Inc., deriving its new name from that of the agency - Models, Actors XCetera Inc.
While all this was going on, Blatter went to California to help manage the rapidly growing agency.
But Dillon, the agency's founder, said the Orem lawyer proved less than helpful. He took company records back to Utah and joined with certain employees in trying to take over the business, she said.
In rebuttal, Shaeffer said Blatter found problems with the agency's finances and "worked his tail off trying to solve them."
Dillon sued and won a preliminary injunction to prohibit Max Inc. from exercising any ownership control of the talent agency pending resolution of the suit. Max Inc. countersued and the court case is still open.
One of Max Inc.'s assertions in an SEC filing is that Dillon failed to keep her ex-husband, Bernie Cornfeld, the flashy founder of the Investors Overseas Services offshore investment empire, away from the talent agency.
Dillon said Cornfeld financed her agency at its beginning "as part of our divorce settlement," but he hasn't had anything to do with running the company. Cornfeld told the Deseret News he advised Dillon to disassociate herself from Matzner and Blatter, "because I didn't like what they were doing."
By what he called "a crazy coincidence," Cornfeld said he'd had Thomas Quinn as a house guest at his castle in France five or six years ago, and Quinn had asked for contacts among the 25,000 former Investors Overseas Services salesmen. But when Quinn explained what he was doing, "I just didn't want any of my guys to get involved in the thing," Cornfeld said.
Cornfeld said he knew that Robert Matzner, the commodities businessman who was Sherwood's major stockholder, was friendly with Quinn, but he didn't know whether they were in business together.
Shaeffer, who is Matzner's lawyer as well as Blatter's, declined to comment on whether Matzner is associated with Quinn. But Chicago stockbroker Paul C. Kettler said Matzner apparently knew Quinn at least well enough to vacation at Quinn's palatial estate in the south of France. Without saying whose place it was, Matzner left that address with Kettler once when he was going on vacation.
Kettler said that Matzner also told him that a George Samaris - identified by authorities as a Quinn alias - owned 80 percent of Matzner's brokerage in Dusseldorf, West Germany. The Chicago broker said the Dusseldorf company traded the stock of GSS Venture, Sherwood Financial and Max Inc., among others. Those are some of the same Utah-linked companies whose records authorities were looking for when they searched the Murray offices of Executive Services.
Swiss prosecuting magistrate Laurent Kasper-Ansermet, who is probing Quinn's operations in Geneva, said Matzner's Dusseldorf brokerage appears to have transferred its funds to a Swiss brokerage he's investigating.
Kasper-Ansermet has an international arrest warrant out for Matzner, and Shaeffer won't say where his client is. "He's not doing interviews and I'm not answering questions."
2 terms to know
Boiler room: A room equipped with many telephones, used for high-pressure sales of securities and other products, which may or may not have value.
Blind pool: Also called a blank check-a corporation that makes its initial public stock offering with little or no stated business purpose; usually potential investors are just told management will seek profitable ventures with which to merge or otherwise combine.