GlobeTel - BUSTED!

Patrick Danner at the Miami Herald has the story on the SEC's accusations of two ex-GlobeTel officials creating fake invoices to generate $119 million in bogus revenue over two years. The two officials are Joseph J. Monterosso and Luis E. Vargas.



SEC Litigation Release No. 20371 / November 26, 2007 , Securities and Exchange Commission v. Joseph J. Monterosso and Luis E. Vargas, Civil Action No. 07-61693: "...The complaint alleges that Monterosso and Vargas created hundreds of false invoices that made it appear that GlobeTel's three wholly-owned subsidiaries, Centerline Communications, LLC ("Centerline"), Volta Communications, LLC ("Volta"), and Lonestar Communications, LLC ("Lonestar") bought and sold telecom "minutes" with other wholesale telecom companies. In reality, there were no transactions under the program that GlobeTel executives described as the "off-net" revenue program. Two of GlobeTel's subsidiaries - Volta and Lonestar - actually did no business. "



Seth Jayson at Motley Fool had been wise on GTE for over a year, see his excellent series of articles --



More Hot Air From GlobeTel, January 6, 2006

GlobeTel's Australian Odyssey, January 23, 2006

GlobeTel Still on Hold, March 13, 2006

The GlobeTel Silent Treatment, April 11, 2006

Just Say "Nyet", May 1, 2006

GlobeTel: Feel the (Cash) Burn, August 16, 2006



History --

GlobeTel Initiates Global Strategy for Sanswire; Establishes Sanswire Europe Through Joint Venture Structure, Business Wire, March 8, 2005, on FindArticles

GlobeTel Enters into Joint Venture to Deploy Stratellites in Europe, the Middle East and Africa, Business Wire, July 12, 2005, on FindArticles

GlobeTel Announces the Appointment of J. Randolph Dumas to the Position of Executive Vice Chairman, Business Wire, November 30, 2005, on FindArticles

GlobeTel Cites Details of Russian Wireless Agreement, Business Wire, January 9, 2006, on FindArticles

GlobeTel Communications Corp. Appoints Dorian Klein as its Newest Independent Director, January 11, 2006

GlobeTel Addresses Christopher Byron's NY Post Statements, May 23, 2006

Business Week's company overview - here





What's interesting is GlobeTel's continuing announcements of the appointments of the managing partners of Rubikon Partners to its management structure. Rubikon Partners is mysteriously listed on the Directory of Fake Banks, which may not be so mysterious, given its claim to "specializing in leveraged buyouts", but it hasn't seen any company transactions in the past 12 months, according to Business Week.



What's also interesting is Randy Dumas' previous investment connections - Dumas West & Co. (a 50:50 partnership with the "Baby Bell" telecommunications company, US West). US West was one of the "Baby Bells" that merged into Qwest Communications in 2000. The Chief Executives were Sol Trujillo and Joseph Nacchio. Trujillo gave up a retention package of $48 M, and went on to become CEO of Graviton, Inc., a firm that is developing wireless sensor technology with espionage applications. Graviton was one of the first investments ever made by In-Q-Tel, the little-known venture-capital arm of the CIA. After Bush's first election, Trujillo was on his transition team, and eventually received a post on the President's Export Council. Trujillo now runs Telstra, Australia's largest telephone company.



Joe Nacchio went on to represent the only telcomm to stand up to pressure from the Bush Administration & the NSA on the phone spying program, and not help the NSA track phone calling patterns, at least 5 months prior to September 11, 2001, see Sara Burnett's and Jeff Smith's October 11, 2007 Rocky Mountain News story. "Nacchio was convicted last spring on 19 counts of insider trading for $52 million of stock sales in April and May 2001, and sentenced to six years in prison. He's free pending appeal. " Also see Onnesha Roychoudhuri's August 9, 2007 article on TruthDig: "Bruce Afran, one of the lawyers leading the class-action suit against AT&T and Verizon for their participation in the government’s data-mining program, has followed the Nacchio case closely. When pressed during an interview, Afran chooses his words carefully: 'We can’t ignore that Nacchio has been the only one to refuse to participate in the program, and that he was then indicted.' Afran explains that, because chief executives are paid in shares or options, they’re always selling shares. 'Whenever you want to take revenge on an uncooperative CEO, all you need to do is charge him with insider trading,' says Afran, referring to a strategy commonly known as 'selective prosecution.' He pauses, sips from his coffee, leans in a bit, and says, 'As a lawyer, I think this is clearly a pretext for punishing him for failing to go along with their [the government’s] program.'"