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Feds say inventor misled investors

October 04, 2000

Feds say inventor misled investors



By ANDREW SCHOTZ / Staff Writer


The owner of a Hagerstown company who said he had planned to use cellular phone technology for car alarms has been accused of defrauding more than 200 investors out of over $400,000.

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The United States Securities & Exchange Commission filed a civil complaint on Tuesday against Carl Robinson and his business, Cellular Video Car Alarms Corporation.

Attorneys general from Maryland and New York joined the SEC's side on Wednesday.

Robinson, 54, said the federal and state governments were mistaken in their prosecution. "They're brutalizing me and brutalizing my company for no good reason," he said.

Robinson said he wants to fight the allegations, but he's not sure how he will. He said he can't afford an attorney because he's in debt and the SEC obtained a temporary restraining order that freezes Cellular Video's assets.

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At issue is a cellular phone connected to a disguised video camera. Combined, they were to make up his security system for vehicles.

The camera, activated by motion, would transmit rapid-fire photos and sound over the phone line to a home computer or other video monitor. Robinson said the police could be called to a car theft while it was in progress.

Alarms with a video terminal display attached would also be available, according to the Cellular Video Web site.

Robinson displayed the equipment at his Robinwood Drive office Wednesday night and explained how it worked. He did not demonstrate it.

The SEC and the attorneys general alleged that Robinson's venture had been fraught with false and misleading statements and projections to investors.

Maryland and New York are among at least six states in which Robinson bought newspaper ads, the civil complaint said. Some ads, as quoted in court papers, said that sales of wireless alarms could reach $44 billion by 2005 and $100 billion by 2008.

"Many of the claims that he makes have no basis in fact," said Robert Blackburn, the associate regional director for the SEC's Northeast bureau in a telephone interview from New York City. "It's just total fantasy."

Robinson also did not register his company before selling shares, prosecutors alleged.

Robinson said he did not think he had to register under Maryland law, but because the state insisted he sent a check last week.

When he announced in September 1999 that he was offering stock in his company, Robinson "did not have a working product or even a prototype," according to the SEC's complaint filed in U.S. District Court in New York.

The SEC said Cellular Video became a Delaware corporation in November 1999.

Robinson said he spent a lot of time and money researching and developing his idea. That included trips to Japan, Finland and other parts of the United States for discussions with major cellular carriers and equipment manufacturers.

Robinson said Wednesday that he doesn't know how much money he has spent.

According to Blackburn, Robinson told the SEC that Cellular Video's stock offering raised about $400,000, of which about $15,000 is left.

Robinson acknowledged that some details have not worked out as envisioned, but he said the system can still be manufactured and sold by the first quarter of 2001. It is scheduled to cost $299 to start.

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