In The Mass Psychology of Suckers, Parts 1 and 2, we began exploring the chronology of Sefe, Inc. (SEFE) and the players involved. We will continue with another installment in that series soon, but today let’s take a look at SEFE director “Humble” Harold Sciotto.
Harold joined the board of SEFE last summer, the June 20, 2011 8k filing announcing his arrival discussed his background:
Mr. Sciotto was employed by Sears Roebuck & Company, from June 1964 until his retirement in May 1993, in various sales and management positions. These positions encompassed store sales and department management positions, such as store merchandise manager, district business manager, and store manager of three stores in Arizona. His duties included sales, advertising, personnel management, financial statement preparation and accounting. From 1989 through the present, Mr. Sciotto has also been an independent business consultant to various early-stage business ventures. Mr. Sciotto most recently served as Corporate Secretary and Treasurer of ECOtality, Inc. (NASD: ECTY) from December of 2004 until November of 2010, and as a Director of ECOtality from December of 2004 until October of 2009.
True to his nickname, Humble Harold does not have a big ego. He is certainly not one to hog the spotlight. His resume is understated. He does not mention, not for a minute, that he was far more than just the Corporate Secretary, Treasurer, and Director of ECTY. In fact, in December 2004 he took control of the shell, Alchemy Enterprises, Ltd. that became scandal-plagued ECTY. (We will come back to ECOtality in a moment)
And, Humble Harold never boasts that after working at a Sears store he got involved in the underbelly of the stock world. He became a stock promoter. His firm, Westpac Communications, Inc., of 3812 N. Gallatin St. in Mesa, AZ, owned a world-famous internet tout site, the ironically named Qualitystocks.net.
QualityStocks.net is owned by Westpac Communications, Inc. Neither QS.net nor Westpac Communications is a registered investment adviser or broker/dealer. Neither QS.net nor Westpac Communications makes any recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk. The information on this website is not designed to be used as the basis for an investment decision. You should confirm to your own satisfaction the veracity of any information prior to entering into any investment. The decision to buy or sell any security that may be featured by QS.net is done purely at the reader’s own risk. Under no circumstances will its owners, officers, or employees be held liable for any losses incurred by the use of information contained in this website.
He certainly does not mention the SEC halting at least three Qualitystocks clients (see here). And the 8k is very silent on the fact that ECTY, SEFE, and Spindle (SPDL) shared the same 6821 E. Thomas Rd address in Scottsdale, AZ. Humble Harold never mentions his work for Modavox (MDVX) now known as Augme Tech (AUGT).*
Nowhere in that June 2011 8k is it mentioned that HH‘s Westpac loaned SEFE $100k in February of 2011. nor does it mention that Westpac was the buyer of the $70k convertible debenture issued in March 2011 by SEFE. And you will never hear him brag about just how many shares those two notes eventually were converted into during early 2012, though surely Humble Harold knows that the holding period under Rule 144 for insiders, like Directors, is one year, which is just about when the SEFE stock promotion began!
Humble Harold doesn’t even brag about the shell company he formed with his son Sam Sciotto , Ginseng Forest.**
Sciotto doesn’t talk about his involvement in SGC Holdings (SGCH), a shell company which eventually became pink sheeter Medistem (MEDS). This company was a NevWest Securities deal. Yes, the same NevWest that was expelled from the industry for their shenanigans in the CMKX fraud. Read about FINRA charging NevWest with money laundering here, the SEC going after them here, and a great article from Gary Weiss here.
The original SB-2 filing for SGC Holdings lists several shareholders, Harold Sciotto is one, but two others of note are:
Lynn-Cole Capital Corporation c/o Victoria P. Quiel
Legend Advisory Corporation c/o Mike Quiel
You might recall that Mike Quiel was recently arrested, along with Stephen Kerr, the father of SEFE director Shannon Kerr (catch up on the Kerrs here). We’ll be seeing Lynn-Cole Capital again real soon.
Humble Harold did mention that he left ECTY in November of 2010. He did not mention why. In what is surely a coincidence, in October of 2010, ECTY received some very bad news:
On October 28, 2010, we and our ECOtality North America subsidiary, as well as certain individuals, received subpoenas from the SEC pursuant to a formal Private Order of Investigation, in connection with a fact-finding inquiry as to trading in shares of our common stock from the period between August 1, 2008 and August 31, 2009. The SEC has informed us, and the terms of the subpoenas confirm, that the fact-finding inquiry should not be construed as a determination that violations of law have occurred. At a meeting held on November 1, 2010, our Board of Directors delegated to the Audit Committee the responsibility and authority to respond to the SEC subpoenas. We are cooperating fully with the SEC.
While ECTY, to any knowledgeable observer, was clearly a scam, the Department of Energy, under Secretary Chu and the current administration, are clearly blind. The retards in DC thought that ECTY, just like Ener1 (HEV) and Solyndra, was a darn fine investment and a great place to put people’s tax dollars! From a great article by Scribe:
Ecotality, which manufactures charging stations for electric vehicles, was hit with an SEC subpoena in October 2010, a development first reported by Scribe. It had already received nearly $90 million in Energy Department grants as part of the stimulus package. Even after the SEC investigation started, it received another $26 million.
The company was a poster child of the administration’s effort to get a million plugin hybrid electric vehicles on the road by 2015. President Obama lauded Ecotality specifically in his 2011 State of the Union Address, as did Energy Secretary Steven Chu.
ECTY, and CEO Jonathan Read, are nothing if not politically connected. From another great Scribe piece:
In 2006, when Read was brought on as CEO, he must have looked an appealing candidate for a company looking to land federal subsidies. His son Colin, who Scribe briefly discussed in part one, was the assistant finance director for the 2006 congressional campaign of then-Arizona State Senator Harry Mitchell (D).
Mitchell won in 2006, and eventually sat on the Science and Technology Subcommittee on Technology and Innovation, and the Transportation and Infrastructure Subcommittee on Highways and Transit – both key panels for Ecotality’s purposes.
During Mitchell’s House race, he held a joint fundraiser with Slade Mead, a State Senate colleague and candidate for superintendent, at the home of then-governor Janet Napolitano. The following year, Ecotality elected Mead to its board of directors.
Thanks to these connections, the US government has funneled over 115mm in taxpayer money into ECTY, with little to show for it besides embarrassment, a very angry Congressman (read more about Congressman Andy Harris’ fight against the ECTY scam here), and an SEC investigation (read the subpoena here).
One of the individuals specifically named in the ECTY subpoena is Humble Harold. He may have a small ego, but he might also have big legal bills.
*Former MDVX/AUGT alum David Ide recently left the board of SEFE, before the most recent rash of promotional activity. But do not fret, David Ide still has a job with another company in this ring of scams, Spindle (SPDL), more on that little gem soon.
**Ginseng eventually became Carol Shelby International (CSBI) a terrible stain on American racing legend Carol Shelby, which is yet another story for yet another day.