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Judge says securities laws broken

April 24, 2002|BY ANDREW SCHOTZ

andrews@herald-mail.com

A judge has found that Cellular Video Car Alarms Corp. and its owner, Carl Robinson of Hagerstown, violated federal securities laws.

U.S. District Judge Richard M. Berman in New York ruled that Robinson used inflated claims to fraudulently sell at least $420,000 worth of stock to more than 220 investors.

Robinson indicated in a financial statement in February that he owns 100 million shares of his company stock, but "the stock value is less than $0.0001 ... and the corporation is bankrupt. When the final (U.S. Securities and Exchange Commission) action is complete, it appears that the corporation will be dissolved."

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The company's phone number has been disconnected and its Web site has shut down. Robinson closed his Robinwood Drive office more than a year ago because he couldn't afford the rent.

Cellular Video Car Alarms planned to produce and distribute a state-of-the-art vehicle alarm system based on cellular phone technology.

But the SEC alleged, and Berman agreed, that Robinson misled investors by claiming to be affiliated with communications giants AT&T and Nokia and that he sold stock without a license, among other violations.

In his attempts to sell $10 million in stock, Robinson advertised that the company's sales would reach $100 billion by 2008.

Robinson disputed the SEC's allegation that he didn't have a working product.

Berman asked a U.S. Magistrate Court judge to review the case and recommend possible civil penalties, such as fines.

Robinson has appealed Berman's Feb. 19 decision to the U.S. Court of Appeals for the Second Circuit. His motion for an appointed lawyer is pending.

Robinson told Berman that the SEC's case was "a motion made out of desperation and not to seek justice," a transcript said.

Robinson has settled similar charges in Maryland, where he and his company were found guilty of violating the state's Securities Act.

Robinson paid $1,500 of the $120,000 in fines that the state assessed him and his company. The remainder was waived.

The waiver was granted "on the basis of poverty," said Assistant Attorney General Timothy Cox. "He had no savings and no assets."

On a financial statement, Robinson reported earning about $20,000 total from two trucking jobs in 1999, 2000 and 2001.

Three bank accounts, totaling less than $4,000, were frozen under a court order.

The state of New York has another set of securities charges pending against Robinson and his company.

Robinson did not return three calls for comment Monday and Tuesday.

In the past, he has defended his business and accused the government of trampling his rights.

Before Berman's ruling, Robinson said in court, "This country is my birth right, and as a Negro minority citizen, all of my life has been spent fighting for equal civil rights," according to the transcript. "The SEC's position is racist and Jim Crow."

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