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Local man is fined in fraud case

November 01, 2002|by ANDREW SCHOTZ

andrews@herald-mail.com

A federal judge in New York has ordered a Hagerstown entrepreneur to turn over $420,000 in investors' money and fined him $100,000 in a securities fraud case.

In addition, Carl Robinson is permanently barred from serving as an officer or director of any public company, according to U.S. District Judge Richard M. Berman's Oct. 11 decision.

Robinson mailed an appeal of the ruling on Thursday to the U.S. Court of Appeals for the Second Circuit.

Three years ago, Robinson formed Cellular Video Car Alarms Corp. to tap into cellular phone technology for vehicle alarms.

He said this week that his idea is worth $50 billion to $100 billion in the integrated market of cameras and cell phones, especially if he negotiates to have his software imbedded in new phones.

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Whether Robinson will get that chance is unknown.

On Oct. 11, Berman approved U.S. Magistrate Judge Andrew J. Peck's recommendation to have Robinson pay the $100,000 fine and "disgorge his ill-gotten gains" - an estimated $420,000 from investors - plus interest, dating back to Aug. 1, 2000.

Berman had asked Peck in February to review the case and recommend possible civil penalties.

Peck submitted his recommendations in July, calling Robinson's violations "egregious." Peck suggested that "the likelihood is high" that Robinson "will continue to violate the securities laws."

The U.S. Securities and Exchange Commission has accused Robinson of defrauding more than 220 investors with grandiose claims and a product that didn't work.

The SEC also alleged that Robinson misled investors by claiming to be affiliated with AT&T and Nokia and that he sold stock without a license, along other violations.

Robinson disputes the charges and says he proved his product in court.

Robinson said he thinks his request to have a court-appointed attorney has been unfairly denied.

"There are major constitutional questions involved here how that (district) court violated due process ...," he said. "There are serious problems how I was denied counsel."

Robinson acknowledged that he made technical errors in forming his corporation and taking it public, but he otherwise insisted that the government is blackballing him.

Robinson's appeal accuses the SEC of violating his civil rights by, among other things, introducing a 31-year-old robbery conviction of his.

He alleges in his appeal that the SEC "concocted this nefarious and outlaw (prosecution) ... because of my skin color and past background."

Robert Blackburn, the associate regional director for the SEC's Northeast bureau in New York, said the SEC will try to divide the $420,000 - or whatever Robinson pays - among investors.

However, on several occasions, Robinson has reported having little or no money, Blackburn said.

Robinson said Tuesday he is driving a truck for a living and barely supporting his family.

The state of Maryland has settled related securities fraud charges against Robinson and his company. The state imposed $120,000 in fines, but allowed Robinson to pay just $1,500; the remainder was waived.

The state of New York has another set of securities fraud charges pending.

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