Post by Admin on Mar 24, 2014 16:06:26 GMT
FBI Snares Serial Schemer
By PAUL FOUTCH / The Dallas Morning News
Convicted felons often have trouble getting jobs, but not Jim Bolt.
In the 12 years since he left prison, in between skipping out on testimony in the Oklahoma City bombing case and twice filing for bankruptcy, Mr. Bolt has been chief operating officer for a golf course company-turned-TV station, compliance manager for a pharmaceutical firm and managing editor of the Arkansas Chronicle.
None of those ventures was quite what it seemed.
Mr. Bolt's tortuous tale is about to be told in a federal court in Arkansas, where he and three associates face securities fraud charges. An undercover FBI operation, using a purported brokerage firm in Addison, broke open the case.
The accused men have pleaded not guilty. A court filing and articles from Mr. Bolt's online "news magazine," the Arkansas Chronicle, hint at their defense strategy by suggesting government officials are conspiring to destroy their company as it tries to cure cancer.
In the annals of 21st century corporate fraud, the story of Shimoda-Atlantic Inc. of Rogers, Ark., is barely worth a mention. But it offers an extreme cautionary tale of the dangers of deception in the Internet age.
Legal filings, criminal records and dozens of interviews, including with local and federal officials, paint a picture of an audacious career criminal who, with his associates, has tried to fool investors, the media and public officials for decades, often successfully.
"These guys are terrible," said Leonard Mauck, a Dallas investing veteran whose Web site, longandshortreports. com, in conjunction with two Arkansas business publications, produced evidence of illegal stock manipulation by Mr. Bolt's broadcasting company, Golf Entertainment Inc., that resulted in a cease-and-desist order by the Arkansas Securities Department in 2002.
"They sued us in federal court, and the case of course was dismissed, but not until we spent about $50,000 in legal fees," Mr. Mauck said.
By all accounts, Mr. Bolt is quick to sue. His legal history shows a pattern of creating sham companies and false identities, attacking public officials in lawsuits and Arkansas Chronicle articles, and fomenting suspicion about the government.
Mr. Bolt, 55, has criminal convictions over the last three decades for lying to a bank and mail fraud, theft by deception, and impersonating a deputy sheriff. He's charged in the federal indictment in the Western District of Arkansas along with Melvin Lynn Robinson, who was convicted in 1993 of federal wire fraud charges and served time with Mr. Bolt; Leroy Hoback, who was ordered by Arkansas regulators in 2005 to stop selling unregistered securities in an unrelated case; and lawyer John Dodge, who filed many of the lawsuits in question.
Those who have run afoul of Mr. Bolt exhibit something of a fascination with him. His tactics are audacious. His legal filings and Arkansas Chronicle articles are well-written and sprinkled with down-home humor. His critics consistently describe him as having the intelligence of a genius, with the ability to operate in the diverse fields of journalism, law, finance and pharmacology.
"If he would have applied his talents to some legitimate enterprise, this guy would have been a success," said Crandell Addington, co-founder of Phoenix Biotechnology Inc. in San Antonio, a cancer research company that Mr. Bolt's firm considered a competitor. "I'm astonished that he's continued to follow the paths he's followed, because he's smart."
Convictions and appeals
In 1983, Mr. Bolt was found guilty in Oklahoma of federal charges of mail fraud and lying to a federally insured bank and was sentenced to 4 ½ years in prison. He was accused of seeking a loan in the name of Russ J. Woolf, falsely telling the bank that he owned a houseboat, and trying to pass checks he'd counterfeited from the National Bank of Liberia, including one for $275,000.
Mr. Bolt appealed, contending in part that the government hadn't given him enough time to obtain documents from Liberia proving that he had legally changed his name there to Russell Woolf.
It's not clear if Mr. Bolt has ever been to Liberia, and he didn't respond to detailed questions for this article.
The 10th Circuit Court of Appeals rejected his arguments in 1985 and described a company called Saturation Systems that Mr. Bolt ran out of a small Tulsa office:
"The Government has aptly described this business as being an enterprise which included a group of imaginary employees, engaged in developing imaginary products and services, located in various imaginary locations in the United States, Scotland, Norway and other overseas locations. The schemes involved the sophisticated use of computers and telex machines and the preparation of various false documents created by Bolt, who appeared to be a skilled draftsman and printer."
In 1992, in Washington County, Ark., Mr. Bolt was convicted of theft by deception and sentenced to three years in prison, to be served concurrently with the revocation of his federal parole.
He appealed, arguing that he had not "personally" waived his right to a jury trial, even though he was present when his lawyer waived that right and he had assisted his lawyer throughout the trial.
The Arkansas high court rejected the appeal, but did use it to clarify the state Constitution's requirements about a defendant's right to a jury trial. One justice dissented.
Mr. Bolt's sentence at the El Reno federal prison near Oklahoma City overlapped that of Mr. Robinson, who was serving a 2 ½ -year sentence for insurance fraud.
In July 1995, Mr. Bolt was released from prison and moved back to Benton County, Ark. He went to work for a copy shop and used it to launch the Arkansas Chronicle, according to the former county sheriff and others.
A review of the archives of the Chronicle's Web site shows the publication mostly pursued government conspiracy theories and attacked local law enforcement officials and anyone investigating Mr. Bolt's business dealings.
Three Arkansas Chronicle articles released on the Internet since 2004 imply:
•That in reporting on Golf Entertainment, Mr. Mauck of Dallas and two Arkansas business journals were engaged in a conspiracy to manipulate the company's stock.
•That corrupt FBI agents engineered the securities charges against Shimoda-Atlantic.
•And that former Benton County Sheriff Andy Lee is a member of a white supremacist group.
In the late 1990s, Mr. Lee said, the Chronicle began writing about his office's purchase of surplus Defense Department helicopters, alleging discrepancies in the county's inventory.
"They got quite a bit of front-page publicity because they sued quite a bit and did a lot of investigations about my office regarding helicopters, and they tried to get a couple of grand juries called to try and get some indictments on us," Mr. Lee said in an interview.
The allegations were investigated multiple times by local and state officials and no wrongdoing was ever found, according to court documents.
Mr. Lee and another official sued Mr. Bolt, his lawyer Mr. Dodge and others for defamation. Mr. Bolt and company countersued for malicious prosecution, and after a four-year battle ended in 2004, Benton County settled.
"We paid them to dump the suit altogether," Mr. Lee said. "It wasn't much."
The pattern of suits and countersuits is a familiar one for Mr. Bolt. Federal and county court records show that since 2000, Mr. Bolt or one of his companies has been a plaintiff or defendant in more than a dozen lawsuits, with either Mr. Bolt or Mr. Dodge acting as counsel.
"I have been served by them I don't know how many times," Mr. Lee said.
Bolt goes into TV
In 2002, Mr. Mauck's longandshortreports.com and the weekly publications Arkansas Business and Northwest Arkansas Business Journal teamed up to examine Golf Entertainment after noticing discrepancies between the company's press releases and its filings with the Securities and Exchange Commission.
Their reports, published in August 2002, said Golf Entertainment was an inactive golf-course management firm in Alpharetta, Ga., when Mr. Bolt and an associate acquired the publicly traded company's shell.
Golf Entertainment began operating a low-power TV station in Springdale, Ark., with Spanish-language programming. The stated business plan was that the region and nation's increasingly Hispanic population would boost demand for their programming.
But the reports cited the local wireless cable provider as saying only 340 people subscribed to Golf Entertainment's station.
The reports alleged that Golf Entertainment doubled the number of shares of stock available for trading through a sham settlement of a lawsuit with Genesis Trust. The reports alleged that Mr. Dodge, Golf's lawyer, had created the trust as a nonprofit but with an invalid tax identification number.
The reports also told of a payment of 2 million Golf Entertainment shares to a Florida stock promoter; a suspicious spike in the company's share price from 3 cents to 30 cents over three days in January 2002; and unsubstantiated claims of $5 million in funding.
A month later, the Arkansas Securities Department issued a cease-and-desist order against Golf Entertainment, Mr. Bolt, Mr. Dodge, Mr. Robinson and others, ordering an end to the sale of Golf Entertainment shares.
Undeterred, Mr. Bolt said in the company's quarterly SEC filing that Golf Entertainment was the target of stock manipulators working in league with the Arkansas Securities Department.
The SEC filing, which Mr. Bolt signed as principal executive officer, reflected a company struggling to stay afloat. The company reported $3,381 in cash, quarterly revenue of $28,958, and a net loss of $2,450, which rounded down to a 0-cent loss per each of the 22 million shares.
Golf Entertainment also said in its SEC filing that it had filed a federal lawsuit alleging market manipulation and extortion by Mr. Mauck of Dallas, an Arkansas reporter, others who had raised allegations in online forums, and several John Does. The judge dismissed the suit in July 2003.
Mr. Bolt, Mr. Robinson and two associates also sued Northwest Arkansas Business Journal and its parent company, Arkansas Business Publishing Group, for libel, seeking $42 million in damages. The suit, filed by Mr. Dodge, eventually was dropped.
In the midst of the controversy, Mr. Bolt filed with the Arkansas secretary of state to incorporate the names "Northwest Arkansas Business Journal Inc.," "Arkansas Business Journal Inc." and "Arkansas Business Publishing Group Inc." Mr. Dodge then demanded that the publications stop using those names and threatened to sue the papers' Internet service providers if they continued to service those Web sites.
The publications, in response, sued Mr. Bolt and Mr. Dodge for trademark violations. Mr. Bolt countersued. And finally, in late 2004, a federal court granted the publications summary judgment and barred Mr. Bolt and Mr. Dodge from using the names of the journals or their parent.
Mr. Bolt and Mr. Dodge were ordered to pay the publications' legal fees of $92,000. But they have yet to pay, according to the publications. Both men have filed for personal bankruptcy.
In his filing, Mr. Bolt reported assets of $65,553, including a $59,000 home in Rogers, Ark., $100 in fishing equipment, a pacemaker, a worthless coon dog, and 300 million shares of the "companies" he incorporated using the names of the local business journals, valued at $0.
As the Golf Entertainment case unfolded, then-U.S. Sen. Tim Hutchinson sent a letter to SEC Chairman Harvey Pitt, requesting an investigation of the company and citing a similar request from Benton County prosecutor Robert Balfe.
According to a Dow Jones Newswires article, Mr. Balfe said in his letter that "Golf Entertainment is an organization created and operated simply to funnel stock to a fictitious organization."
Mr. Balfe declined comment, saying his office had recused itself from the current case.
Like Mr. Mauck's Web site, the local business journals spent tens of thousands of dollars defending themselves against Mr. Bolt's lawsuits. Jeff Hankins, the publisher of Arkansas Business, said it was disappointing that no criminal charges emerged from the case.
"We always thought that the Golf Entertainment case had merit," he said. "We reported details extensively, and now we'll watch the justice system take its course."
New business
Mr. Bolt, Mr. Robinson and Mr. Dodge moved next into the pharmaceutical business – apparently under the watchful eye of the FBI.
The Web site of ShimodaAtlantic Oncology BioSciences LLC, as the company was originally called, shows photos of test tubes, cells under a microscope, a scientist with a beaker and a cancer cell.
"ShimodaAtlantic is a 29-year old company specializing in the development of niche pharmaceuticals for neoplastic disease processes," the site says. The company claims to be involved in pharmaceutical research and development, clinical trial management, pharmaceutical quality assurance programs and clinical trial candidate screening programs.
But that description doesn't jibe with a Food and Drug Administration inspection report of Shimoda's operation in Rogers, Ark., dated Dec. 5, 2005, a copy of which Mr. Bolt provided to The Dallas Morning News.
In the "initial inspection of a prescription drug relabeler/repackager," the FDA inspector quoted Mr. Bolt as saying the company was not currently conducting any studies but planned to buy some oleander tincture from a company in West Virginia and repackage it.
According to the report, Mr. Bolt identified himself as the firm's compliance manager and said there were only three other employees: Mr. Dodge, the company attorney; Mr. Robinson, "the fundraiser"; and Mr. Hoback, who handled business affairs.
The federal indictment alleges that although Mr. Hoback is Shimoda's CEO, Mr. Bolt founded the company.
Shimoda's marketing efforts seem to have been limited to promoting its oleander-based lung cancer drug, Xenavex, in Internet forums and denigrating a similar treatment, Phoenix Biotech's Anvirzel.
"They'd put up these cartoons about us producing this drug in a bathtub or under unsanitary conditions," said Mr. Addington, whose company is in the sixth year of a sponsored research agreement with M.D. Anderson Cancer Center in Houston.
In an online forum devoted to alternative cancer treatments in March 2005, Tony Isaacs of Garland believes he ran afoul of Mr. Bolt.
After reading entries promoting Xenavex – posted by users with the screen names Boris Batenov and Natashya Fatale, reminiscent of the old Rocky and Bullwinkle cartoons – Mr. Isaacs said, he passed on a rumor that Shimoda wasn't on the up and up. He immediately received a barrage of e-mails threatening lawsuits from people identifying themselves as Gerald Bernstein, Shimoda's in-house counsel, and Paul McLouth, the company's executive manager.
Mr. Isaacs, who previously worked as an investigator tracking deadbeats, suspected the names were fake after he searched electronic databases and found no likely matches in Arkansas. For example, there is no licensed attorney in Arkansas named Gerald Bernstein, according to the Arkansas judiciary Web site.
"I've spent 20 years in private investigation, and they don't exist," he said. "All the names attached to Shimoda are fictitious for the most part."
Paul McLouth is an alias used by one of the Shimoda defendants, according to an FBI affidavit. Mr. Bolt told Dow Jones Newswires last year that Paul McLouth was the name of his late grandfather.
Shimoda listed a planned clinical trial for Xenavex in an online National Institutes of Health database. The trial sought lung cancer patients whose previous treatments had failed but who had at least three months to live. For more information, dying cancer patients could call Paul McLouth.
Mr. Isaacs said that, after the e-mail barrage, two men identifying themselves as a Shimoda official and a U.S. marshal went to his former employer, Statewide Adjusters in Garland, trying to find him.
"The very next week they had two guys show up at the office where I had worked, looking for me," Mr. Isaacs said. "They said, 'These people are looking for you,' and I said, 'Holy cow!' "
Mr. Isaacs, who works for former NFL star Isiah Robertson's North Texas Recovery Center, House of Isaiah, complained to the U.S. Marshals Service, the FBI and other federal agencies and passed on evidence he'd turned up on Mr. Bolt and his alleged activities and aliases. None of the agencies would comment.
Dallas connection
Shimoda's Web site says it is a privately held company and provides an e-mail address for interested investors. "At this time, our policy is to respond only to investment inquiries originating from accredited investment banking firms, commercial banks, and NASD licensed broker-dealers."
In April 2005, as Shimoda was trying to raise money to fund its clinical trial, the company began talking to a man who identified himself as John Firo, a broker from a firm in Addison called Talon Holdings, according to court records.
Mr. Bolt told The News in a phone interview last May that the company checked out Mr. Firo and Talon Holdings on the Web site of the NASD, which regulates brokers and brokerage firms, and found them to be in good standing.
Mr. Firo introduced an investor from Dubai who eventually agreed to buy 20 million shares of Shimoda at 15 cents a share, for a $3 million investment and a 20 percent share in the company, court records show.
The agreement was signed May 9, 2006. The next day, the Shimoda employees were handed a subpoena by a U.S. marshal and told that John Firo and the Dubai investor were actually undercover agents, Mr. Bolt said.
Talon Holdings was an FBI operation, created to gather evidence in the extortion case against Robert Vigil, the former New Mexico state treasurer. (Mr. Vigil was acquitted in September on 23 of 24 counts related to allegations that he extorted money from brokers wanting to do business with the state.)
The undercover deal with Shimoda was done the same day that Robert Bettes, now retired from the Dallas FBI office, testified as to Talon Holdings' true identity during Mr. Vigil's trial in Albuquerque.
Claim of FDA approval
The federal indictment against Mr. Bolt and associates alleges that at the May 9 meeting, Mr. Bolt falsely told the Dubai investor that Xenavex had been approved by the Food and Drug Administration and could legally be marketed as a treatment for congestive heart failure, herpes and eczema.
Neither Xenavex nor oleander appear on the FDA's Web site as approved prescription or over-the-counter drugs. Xenavex does have a National Drug Code number, but an FDA spokeswoman said a manufacturer can register a product without it being approved by regulators.
The indictment also alleges that all four defendants discussed with John Firo the need to conceal from the investor Mr. Firo's $300,000 kickback fee. Concealing such a fee is illegal under securities law.
Mr. Bolt, Mr. Dodge, Mr. Robinson and Mr. Hoback face charges of wire fraud, mail fraud, and conspiracy to commit securities fraud. The charges carry sentences of between five and 20 years.
Their trial is set to begin Monday in federal court in Fayetteville, Ark.
After Mr. Bolt received the subpoena last May, he began calling reporters to complain that Shimoda hadn't done anything wrong.
Mr. Dodge sued Talon Holdings, the undercover agents and the NASD on behalf of Shimoda, alleging fraud and theft of trade secrets.
In its response, the NASD noted that Mr. Dodge may have a conflict of interest since he had both filed the lawsuit and faced charges in the case; that it was the second securities investigation in four years against three of the four men; and that Mr. Bolt had "been convicted of a string of crimes that evidence a fundamental dishonesty running back 30 years."
The NASD said the suit appeared to be a ploy to use the legal discovery process to gather information in the men's criminal defense. "This current litigation is also not the first time these individuals have lashed out at parties involved in exposing their illegal acts – in fact it is entirely consistent with a familiar pattern."
Shimoda withdrew the suit against the NASD and the undercover FBI agents, although it remains active against a man who is believed to be a cooperating witness.
In a filing in that case, Shimoda maintained that Xenavex is a "monograph drug" – available without prescription – and suggested a wide-ranging government conspiracy against the company.
Mr. Robinson said in an interview that the November filing is the basis for the men's defense. He contended that local Republican officials have been out to get them ever since Golf Entertainment's TV station editorialized against Sen. Hutchinson's re-election campaign.
"What's going on up here is a tragedy, and no one seems to have the cojones in this area to do anything about it," Mr. Robinson said.
By PAUL FOUTCH / The Dallas Morning News
Convicted felons often have trouble getting jobs, but not Jim Bolt.
In the 12 years since he left prison, in between skipping out on testimony in the Oklahoma City bombing case and twice filing for bankruptcy, Mr. Bolt has been chief operating officer for a golf course company-turned-TV station, compliance manager for a pharmaceutical firm and managing editor of the Arkansas Chronicle.
None of those ventures was quite what it seemed.
Mr. Bolt's tortuous tale is about to be told in a federal court in Arkansas, where he and three associates face securities fraud charges. An undercover FBI operation, using a purported brokerage firm in Addison, broke open the case.
The accused men have pleaded not guilty. A court filing and articles from Mr. Bolt's online "news magazine," the Arkansas Chronicle, hint at their defense strategy by suggesting government officials are conspiring to destroy their company as it tries to cure cancer.
In the annals of 21st century corporate fraud, the story of Shimoda-Atlantic Inc. of Rogers, Ark., is barely worth a mention. But it offers an extreme cautionary tale of the dangers of deception in the Internet age.
Legal filings, criminal records and dozens of interviews, including with local and federal officials, paint a picture of an audacious career criminal who, with his associates, has tried to fool investors, the media and public officials for decades, often successfully.
"These guys are terrible," said Leonard Mauck, a Dallas investing veteran whose Web site, longandshortreports. com, in conjunction with two Arkansas business publications, produced evidence of illegal stock manipulation by Mr. Bolt's broadcasting company, Golf Entertainment Inc., that resulted in a cease-and-desist order by the Arkansas Securities Department in 2002.
"They sued us in federal court, and the case of course was dismissed, but not until we spent about $50,000 in legal fees," Mr. Mauck said.
By all accounts, Mr. Bolt is quick to sue. His legal history shows a pattern of creating sham companies and false identities, attacking public officials in lawsuits and Arkansas Chronicle articles, and fomenting suspicion about the government.
Mr. Bolt, 55, has criminal convictions over the last three decades for lying to a bank and mail fraud, theft by deception, and impersonating a deputy sheriff. He's charged in the federal indictment in the Western District of Arkansas along with Melvin Lynn Robinson, who was convicted in 1993 of federal wire fraud charges and served time with Mr. Bolt; Leroy Hoback, who was ordered by Arkansas regulators in 2005 to stop selling unregistered securities in an unrelated case; and lawyer John Dodge, who filed many of the lawsuits in question.
Those who have run afoul of Mr. Bolt exhibit something of a fascination with him. His tactics are audacious. His legal filings and Arkansas Chronicle articles are well-written and sprinkled with down-home humor. His critics consistently describe him as having the intelligence of a genius, with the ability to operate in the diverse fields of journalism, law, finance and pharmacology.
"If he would have applied his talents to some legitimate enterprise, this guy would have been a success," said Crandell Addington, co-founder of Phoenix Biotechnology Inc. in San Antonio, a cancer research company that Mr. Bolt's firm considered a competitor. "I'm astonished that he's continued to follow the paths he's followed, because he's smart."
Convictions and appeals
In 1983, Mr. Bolt was found guilty in Oklahoma of federal charges of mail fraud and lying to a federally insured bank and was sentenced to 4 ½ years in prison. He was accused of seeking a loan in the name of Russ J. Woolf, falsely telling the bank that he owned a houseboat, and trying to pass checks he'd counterfeited from the National Bank of Liberia, including one for $275,000.
Mr. Bolt appealed, contending in part that the government hadn't given him enough time to obtain documents from Liberia proving that he had legally changed his name there to Russell Woolf.
It's not clear if Mr. Bolt has ever been to Liberia, and he didn't respond to detailed questions for this article.
The 10th Circuit Court of Appeals rejected his arguments in 1985 and described a company called Saturation Systems that Mr. Bolt ran out of a small Tulsa office:
"The Government has aptly described this business as being an enterprise which included a group of imaginary employees, engaged in developing imaginary products and services, located in various imaginary locations in the United States, Scotland, Norway and other overseas locations. The schemes involved the sophisticated use of computers and telex machines and the preparation of various false documents created by Bolt, who appeared to be a skilled draftsman and printer."
In 1992, in Washington County, Ark., Mr. Bolt was convicted of theft by deception and sentenced to three years in prison, to be served concurrently with the revocation of his federal parole.
He appealed, arguing that he had not "personally" waived his right to a jury trial, even though he was present when his lawyer waived that right and he had assisted his lawyer throughout the trial.
The Arkansas high court rejected the appeal, but did use it to clarify the state Constitution's requirements about a defendant's right to a jury trial. One justice dissented.
Mr. Bolt's sentence at the El Reno federal prison near Oklahoma City overlapped that of Mr. Robinson, who was serving a 2 ½ -year sentence for insurance fraud.
In July 1995, Mr. Bolt was released from prison and moved back to Benton County, Ark. He went to work for a copy shop and used it to launch the Arkansas Chronicle, according to the former county sheriff and others.
A review of the archives of the Chronicle's Web site shows the publication mostly pursued government conspiracy theories and attacked local law enforcement officials and anyone investigating Mr. Bolt's business dealings.
Three Arkansas Chronicle articles released on the Internet since 2004 imply:
•That in reporting on Golf Entertainment, Mr. Mauck of Dallas and two Arkansas business journals were engaged in a conspiracy to manipulate the company's stock.
•That corrupt FBI agents engineered the securities charges against Shimoda-Atlantic.
•And that former Benton County Sheriff Andy Lee is a member of a white supremacist group.
In the late 1990s, Mr. Lee said, the Chronicle began writing about his office's purchase of surplus Defense Department helicopters, alleging discrepancies in the county's inventory.
"They got quite a bit of front-page publicity because they sued quite a bit and did a lot of investigations about my office regarding helicopters, and they tried to get a couple of grand juries called to try and get some indictments on us," Mr. Lee said in an interview.
The allegations were investigated multiple times by local and state officials and no wrongdoing was ever found, according to court documents.
Mr. Lee and another official sued Mr. Bolt, his lawyer Mr. Dodge and others for defamation. Mr. Bolt and company countersued for malicious prosecution, and after a four-year battle ended in 2004, Benton County settled.
"We paid them to dump the suit altogether," Mr. Lee said. "It wasn't much."
The pattern of suits and countersuits is a familiar one for Mr. Bolt. Federal and county court records show that since 2000, Mr. Bolt or one of his companies has been a plaintiff or defendant in more than a dozen lawsuits, with either Mr. Bolt or Mr. Dodge acting as counsel.
"I have been served by them I don't know how many times," Mr. Lee said.
Bolt goes into TV
In 2002, Mr. Mauck's longandshortreports.com and the weekly publications Arkansas Business and Northwest Arkansas Business Journal teamed up to examine Golf Entertainment after noticing discrepancies between the company's press releases and its filings with the Securities and Exchange Commission.
Their reports, published in August 2002, said Golf Entertainment was an inactive golf-course management firm in Alpharetta, Ga., when Mr. Bolt and an associate acquired the publicly traded company's shell.
Golf Entertainment began operating a low-power TV station in Springdale, Ark., with Spanish-language programming. The stated business plan was that the region and nation's increasingly Hispanic population would boost demand for their programming.
But the reports cited the local wireless cable provider as saying only 340 people subscribed to Golf Entertainment's station.
The reports alleged that Golf Entertainment doubled the number of shares of stock available for trading through a sham settlement of a lawsuit with Genesis Trust. The reports alleged that Mr. Dodge, Golf's lawyer, had created the trust as a nonprofit but with an invalid tax identification number.
The reports also told of a payment of 2 million Golf Entertainment shares to a Florida stock promoter; a suspicious spike in the company's share price from 3 cents to 30 cents over three days in January 2002; and unsubstantiated claims of $5 million in funding.
A month later, the Arkansas Securities Department issued a cease-and-desist order against Golf Entertainment, Mr. Bolt, Mr. Dodge, Mr. Robinson and others, ordering an end to the sale of Golf Entertainment shares.
Undeterred, Mr. Bolt said in the company's quarterly SEC filing that Golf Entertainment was the target of stock manipulators working in league with the Arkansas Securities Department.
The SEC filing, which Mr. Bolt signed as principal executive officer, reflected a company struggling to stay afloat. The company reported $3,381 in cash, quarterly revenue of $28,958, and a net loss of $2,450, which rounded down to a 0-cent loss per each of the 22 million shares.
Golf Entertainment also said in its SEC filing that it had filed a federal lawsuit alleging market manipulation and extortion by Mr. Mauck of Dallas, an Arkansas reporter, others who had raised allegations in online forums, and several John Does. The judge dismissed the suit in July 2003.
Mr. Bolt, Mr. Robinson and two associates also sued Northwest Arkansas Business Journal and its parent company, Arkansas Business Publishing Group, for libel, seeking $42 million in damages. The suit, filed by Mr. Dodge, eventually was dropped.
In the midst of the controversy, Mr. Bolt filed with the Arkansas secretary of state to incorporate the names "Northwest Arkansas Business Journal Inc.," "Arkansas Business Journal Inc." and "Arkansas Business Publishing Group Inc." Mr. Dodge then demanded that the publications stop using those names and threatened to sue the papers' Internet service providers if they continued to service those Web sites.
The publications, in response, sued Mr. Bolt and Mr. Dodge for trademark violations. Mr. Bolt countersued. And finally, in late 2004, a federal court granted the publications summary judgment and barred Mr. Bolt and Mr. Dodge from using the names of the journals or their parent.
Mr. Bolt and Mr. Dodge were ordered to pay the publications' legal fees of $92,000. But they have yet to pay, according to the publications. Both men have filed for personal bankruptcy.
In his filing, Mr. Bolt reported assets of $65,553, including a $59,000 home in Rogers, Ark., $100 in fishing equipment, a pacemaker, a worthless coon dog, and 300 million shares of the "companies" he incorporated using the names of the local business journals, valued at $0.
As the Golf Entertainment case unfolded, then-U.S. Sen. Tim Hutchinson sent a letter to SEC Chairman Harvey Pitt, requesting an investigation of the company and citing a similar request from Benton County prosecutor Robert Balfe.
According to a Dow Jones Newswires article, Mr. Balfe said in his letter that "Golf Entertainment is an organization created and operated simply to funnel stock to a fictitious organization."
Mr. Balfe declined comment, saying his office had recused itself from the current case.
Like Mr. Mauck's Web site, the local business journals spent tens of thousands of dollars defending themselves against Mr. Bolt's lawsuits. Jeff Hankins, the publisher of Arkansas Business, said it was disappointing that no criminal charges emerged from the case.
"We always thought that the Golf Entertainment case had merit," he said. "We reported details extensively, and now we'll watch the justice system take its course."
New business
Mr. Bolt, Mr. Robinson and Mr. Dodge moved next into the pharmaceutical business – apparently under the watchful eye of the FBI.
The Web site of ShimodaAtlantic Oncology BioSciences LLC, as the company was originally called, shows photos of test tubes, cells under a microscope, a scientist with a beaker and a cancer cell.
"ShimodaAtlantic is a 29-year old company specializing in the development of niche pharmaceuticals for neoplastic disease processes," the site says. The company claims to be involved in pharmaceutical research and development, clinical trial management, pharmaceutical quality assurance programs and clinical trial candidate screening programs.
But that description doesn't jibe with a Food and Drug Administration inspection report of Shimoda's operation in Rogers, Ark., dated Dec. 5, 2005, a copy of which Mr. Bolt provided to The Dallas Morning News.
In the "initial inspection of a prescription drug relabeler/repackager," the FDA inspector quoted Mr. Bolt as saying the company was not currently conducting any studies but planned to buy some oleander tincture from a company in West Virginia and repackage it.
According to the report, Mr. Bolt identified himself as the firm's compliance manager and said there were only three other employees: Mr. Dodge, the company attorney; Mr. Robinson, "the fundraiser"; and Mr. Hoback, who handled business affairs.
The federal indictment alleges that although Mr. Hoback is Shimoda's CEO, Mr. Bolt founded the company.
Shimoda's marketing efforts seem to have been limited to promoting its oleander-based lung cancer drug, Xenavex, in Internet forums and denigrating a similar treatment, Phoenix Biotech's Anvirzel.
"They'd put up these cartoons about us producing this drug in a bathtub or under unsanitary conditions," said Mr. Addington, whose company is in the sixth year of a sponsored research agreement with M.D. Anderson Cancer Center in Houston.
In an online forum devoted to alternative cancer treatments in March 2005, Tony Isaacs of Garland believes he ran afoul of Mr. Bolt.
After reading entries promoting Xenavex – posted by users with the screen names Boris Batenov and Natashya Fatale, reminiscent of the old Rocky and Bullwinkle cartoons – Mr. Isaacs said, he passed on a rumor that Shimoda wasn't on the up and up. He immediately received a barrage of e-mails threatening lawsuits from people identifying themselves as Gerald Bernstein, Shimoda's in-house counsel, and Paul McLouth, the company's executive manager.
Mr. Isaacs, who previously worked as an investigator tracking deadbeats, suspected the names were fake after he searched electronic databases and found no likely matches in Arkansas. For example, there is no licensed attorney in Arkansas named Gerald Bernstein, according to the Arkansas judiciary Web site.
"I've spent 20 years in private investigation, and they don't exist," he said. "All the names attached to Shimoda are fictitious for the most part."
Paul McLouth is an alias used by one of the Shimoda defendants, according to an FBI affidavit. Mr. Bolt told Dow Jones Newswires last year that Paul McLouth was the name of his late grandfather.
Shimoda listed a planned clinical trial for Xenavex in an online National Institutes of Health database. The trial sought lung cancer patients whose previous treatments had failed but who had at least three months to live. For more information, dying cancer patients could call Paul McLouth.
Mr. Isaacs said that, after the e-mail barrage, two men identifying themselves as a Shimoda official and a U.S. marshal went to his former employer, Statewide Adjusters in Garland, trying to find him.
"The very next week they had two guys show up at the office where I had worked, looking for me," Mr. Isaacs said. "They said, 'These people are looking for you,' and I said, 'Holy cow!' "
Mr. Isaacs, who works for former NFL star Isiah Robertson's North Texas Recovery Center, House of Isaiah, complained to the U.S. Marshals Service, the FBI and other federal agencies and passed on evidence he'd turned up on Mr. Bolt and his alleged activities and aliases. None of the agencies would comment.
Dallas connection
Shimoda's Web site says it is a privately held company and provides an e-mail address for interested investors. "At this time, our policy is to respond only to investment inquiries originating from accredited investment banking firms, commercial banks, and NASD licensed broker-dealers."
In April 2005, as Shimoda was trying to raise money to fund its clinical trial, the company began talking to a man who identified himself as John Firo, a broker from a firm in Addison called Talon Holdings, according to court records.
Mr. Bolt told The News in a phone interview last May that the company checked out Mr. Firo and Talon Holdings on the Web site of the NASD, which regulates brokers and brokerage firms, and found them to be in good standing.
Mr. Firo introduced an investor from Dubai who eventually agreed to buy 20 million shares of Shimoda at 15 cents a share, for a $3 million investment and a 20 percent share in the company, court records show.
The agreement was signed May 9, 2006. The next day, the Shimoda employees were handed a subpoena by a U.S. marshal and told that John Firo and the Dubai investor were actually undercover agents, Mr. Bolt said.
Talon Holdings was an FBI operation, created to gather evidence in the extortion case against Robert Vigil, the former New Mexico state treasurer. (Mr. Vigil was acquitted in September on 23 of 24 counts related to allegations that he extorted money from brokers wanting to do business with the state.)
The undercover deal with Shimoda was done the same day that Robert Bettes, now retired from the Dallas FBI office, testified as to Talon Holdings' true identity during Mr. Vigil's trial in Albuquerque.
Claim of FDA approval
The federal indictment against Mr. Bolt and associates alleges that at the May 9 meeting, Mr. Bolt falsely told the Dubai investor that Xenavex had been approved by the Food and Drug Administration and could legally be marketed as a treatment for congestive heart failure, herpes and eczema.
Neither Xenavex nor oleander appear on the FDA's Web site as approved prescription or over-the-counter drugs. Xenavex does have a National Drug Code number, but an FDA spokeswoman said a manufacturer can register a product without it being approved by regulators.
The indictment also alleges that all four defendants discussed with John Firo the need to conceal from the investor Mr. Firo's $300,000 kickback fee. Concealing such a fee is illegal under securities law.
Mr. Bolt, Mr. Dodge, Mr. Robinson and Mr. Hoback face charges of wire fraud, mail fraud, and conspiracy to commit securities fraud. The charges carry sentences of between five and 20 years.
Their trial is set to begin Monday in federal court in Fayetteville, Ark.
After Mr. Bolt received the subpoena last May, he began calling reporters to complain that Shimoda hadn't done anything wrong.
Mr. Dodge sued Talon Holdings, the undercover agents and the NASD on behalf of Shimoda, alleging fraud and theft of trade secrets.
In its response, the NASD noted that Mr. Dodge may have a conflict of interest since he had both filed the lawsuit and faced charges in the case; that it was the second securities investigation in four years against three of the four men; and that Mr. Bolt had "been convicted of a string of crimes that evidence a fundamental dishonesty running back 30 years."
The NASD said the suit appeared to be a ploy to use the legal discovery process to gather information in the men's criminal defense. "This current litigation is also not the first time these individuals have lashed out at parties involved in exposing their illegal acts – in fact it is entirely consistent with a familiar pattern."
Shimoda withdrew the suit against the NASD and the undercover FBI agents, although it remains active against a man who is believed to be a cooperating witness.
In a filing in that case, Shimoda maintained that Xenavex is a "monograph drug" – available without prescription – and suggested a wide-ranging government conspiracy against the company.
Mr. Robinson said in an interview that the November filing is the basis for the men's defense. He contended that local Republican officials have been out to get them ever since Golf Entertainment's TV station editorialized against Sen. Hutchinson's re-election campaign.
"What's going on up here is a tragedy, and no one seems to have the cojones in this area to do anything about it," Mr. Robinson said.