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Professional stock trader Phil Gurian discussed the recent controversy surrounding him and his alleged ties with the mafia and with aviation security company HiEnergy Technologies Inc. of Irvine, Calif., in an exclusive two-hour interview with WorldNetDaily.
For a long time, little has been known or written about the brilliant and soft-spoken Gurian, save a landmark 1997 Business Week article identifying him as the reputed right-hand man of the under-boss of the DeCavalcante crime family.
Now, a controversy sparked by last week’s Dow Jones newswire article by Carol Remond threatens the reputation of HiEnergy and persons associated with the company – including its consultant, Isaac Yeffet, former head of the Israeli Secret Service.
The recent Dow Jones article connected persons involved with HiEnergy’s reverse merger with SLW Enterprises to Boca Raton resident Gurian. In “HiEnergy and a man named Gurian,” reporter Remond showed that the controlling stockholder of SLW Enterprises, a shell company, was one Rheal Cote, whose address was the same as that of Jeanine Gurian, Phil Gurian’s mother. In addition, Remond reported that one-time market-maker Metro Trading Inc. was staffed with alumni from Sovereign Equity Management Company, allegedly controlled by Gurian and DeCavalcante capo Phil Abramo, and named in court documents as having engaged in securities fraud and extortion.
After HiEnergy stock dropped, the company released a statement: “We have become aware of rumors regarding certain stockholders and their relationship to a person who has previously been involved in stock manipulation schemes.” The statement noted that an independent investigative team found “no evidence of wrongdoing on the part of the current executive management team, or following the reverse merger with SLW.”
However, the report added, “there is insufficient evidence to fully conclude that there was no wrongdoing by SLW Enterprises prior to the April 2002 reverse merger.”
When the Dow Jones article was published, former HiEnergy CEO Barry Alter was serving as a director of the company. Alter was the one who was officially responsible for taking HiEnergy public.
Yesterday, Alter told WND, “Right now today, I don’t have a title with HiEnergy anymore. I was the president and CEO for a while before Tom Pascoe stepped in and I stayed on as a director and a consultant. And I’ve recently resigned as a director and a consultant.” Alter confirmed the change in title came after the Dow Jones article, “but those were my intentions anyway,” he said.
The Dow Jones article raises serious questions. Who is Phil Gurian, and is he a mafia man? Are there connections between Gurian and HiEnergy Technologies? If so, what are those connections? Are they discoverable? Is there mob money behind HiEnergy, and if so, do investors really care? Investors and experts are also wondering whether a Gurian connection would imply HiEnergy’s neutron-beam explosive detection system is vaporware, or if real, is it being exaggerated when presented as currently commercially viable? Or did Rheal Cote, who is the French boyfriend of Gurian’s mother, Jeanine Gurian, simply profit handsomely from a reverse-merger?
The day Remond’s article came out, Gurian contacted WND via “lifetime friend” and HiEnergy investor Hal Schoenfeld. Schoenfeld requested a meeting between WND, himself and Gurian that night at Gurian’s Boca Raton home. WND instead met with Schoenfeld and Gurian at O’Hara’s nightclub in Hollywood the following night from 9:30 to 11:45.
It is the only interview Gurian has ever given the press.
‘Phil has a PR problem’
Schoenfeld had told WND prior to the interview, “Phil has a PR problem.” WND questioned Schoenfeld prior to the interview, during which time Schoenfeld admitted that years ago he had been called in by the FBI, who several years ago was questioning all of Gurian’s friends. He added, in a rambling conversation, “He’s never threatened me. He would never threaten a life-long friend,” and added, “I’ve always done very well with Phil,” alluding to stock deals the two had been involved in.
Schoenfeld invited WND to investigate the matter, saying, ironically, “I realize your article may turn out to be worse than Remond’s.”
Gurian told WND he simply had become involved in the sales of “Reg” S securities. He said that he erred in that he knew the companies whose stock he was purchasing were engaged in fraud. Gurian said at the time he rationalized that since he wasn’t engaged in fraud, it was OK. He acknowledged that his prior activities were wrong, but complained that he was not engaged currently in any wrongdoing, and for that reason thought the Dow Jones article unfair. Gurian added that he was involved in a number of good works, which he kept private.
Arrested in Switzerland after an arrest warrant was issued in the U.S., Gurian now awaits sentencing. During the interview, he voiced concerns that the Remond article may influence a judge and affect his sentencing.
He also flatly denied that he had anything to do with HiEnergy Technologies. Former HiEnergy CEO Barry Alter was a friend of his, he said, and that was the sole connection.
Alter confirmed to WND that the two were friends. “Oh God, I met him many, many years ago down in Florida. We played golf together,” he said.
Gurian also said that he had never seen HiEnergy’s technology, and had no personal knowledge of it.
Gurian’s statements contradicted those of Schoenfeld, who had previously told WND that Gurian was involved with HiEnergy’s transformation into a public company and had helped raise money for the company. At that time, Shoenfeld had described Gurian to WND as a “very successful guy who manages the assets of others and his own assets. He’s a professional stock trader. He does very well.”
The National Association of Securities Dealers permanently barred Gurian from the securities business in March 1995.
WND asked Gurian, in Schoenfeld’s presence, about the seeming discrepancy in comments. Gurian responded by saying he had given contacts to Alter, but did not want to say that previously, because “it would kill me.” In a taped interview with WND, HiEnergy’s former CEO confirmed that Gurian had passed on investor contacts to him. “They were just people who we both knew … who I contacted to see if they wanted to invest in the company. That’s all.” Alter declined to name any of the investors, saying the information was “private.” Alter said, “I raised them [HiEnergy Technologies] a bunch of money.”
During the interview, Gurian indicated that all the preliminary research into HiEnergy, prior to the reverse merger with SLW Enterprises, was done by Greg Gilbert, currently a director for HiEnergy. Gilbert is also CEO and president of Hamilton-Biophile Companies, formed by merging Hamilton-Clarke and the remains of Mehl/Biophile following the removal of all Mehl management.
Mehl/Biophile’s founder, Thomas Louis Mehl Sr., has been described as a “fixture in the world of hair removal scams.” One website gives a timeline of his “sordid career in hair removal.”
Gilbert’s hair-removal website informs readers that highly skilled employees of related Hamilton-Clarke division work on “highly secret” projects.
Hamilton-Clarke, a division of Hamilton-Biophile, has diabetes clinics in Florida.
Gurian also had previously told WND that he “had” a couple of diabetes clinics in Florida. WND asked him if these were related to HiEnergy’s Gilbert.
“The Diabetes clinics do not have anything to do with Hamilton Clarke,” Gurian said. “That is a separate company that I am helping fund.”
When asked whether he was involved with the mob, Gurian laughed and denied that he had anything to do with the mafia.
WND also posed a question market watchers were asking: Could money-laundering be going on at HiEnergy? A wide-eyed Gurian responded, “Money laundering? I don’t know anything about that. How would you do that?”
Sealed indictment alleges mafia conspiracy
WorldNetDaily has obtained the sealed 21-count grand jury indictment, filed in the Middle Court in Florida in 1999, which accuses Phil Gurian, DeCavalcante mafia capo Phil Abramo, Louis Consalvo (a/k/a LOUIE “EGGS”), Glen T. Vittor and Barry Gesser of conspiracy, racketeering, securities fraud, extortion, mail and wire fraud – and money laundering.
The sealed indictment also includes details of the murder of Bahamian national Joy Cartwright.
In addition, the indictment alleges that Bahamian attorney Obie Pindling, son of former Prime Minister Sir Lynden Pindling (deceased) opened up accounts for the mafia and was a signatory on at least one of their brokerage accounts.
The sealed indictment also makes repeated reference to a company known as “Alter Sales Inc.” – from which the defendants received millions of shares.
An inside source told WND that Alter Sales Inc. was controlled by one “Barry Alter.” The source, who spoke on condition of anonymity, indicated that Alter Sales was initially controlled by Barry’s brother Herb. Upon Herb’s death, Barry took control around 1992-1993.
The indictment accuses Gurian et al of causing Alter Sales Inc. (along with two other companies) to issue false and fraudulent press releases regarding present and future business and financial soundness in order to “pump” the stock prices.
WND asked former HiEnergy CEO Barry Alter whether he was the control man behind Alter Sales Inc. “I’ve never been involved with Alter Sales Inc. … I never was … I’ve never even heard of Alter Sales.” Alter added, “Apparently the guy who was involved in that company was Herb Alter. A fellow named Herb Alter started the company and that’s why they named it Alter Sales. Herb Alter apparently was … is Alter Sales.”
Barry Alter told WND that he does not have a brother, that he never took over the company, adding, “That’s not even remotely true.” He added that he had heard Alter Sales was a company Phil Gurian had “problems” with back in 1995. He called it a rumor, adding, “I’m sure it must be that Carol Remond [of Dow Jones newswire] running around trying to write more stories about me.” Remond was not the source.
A different SEC litigation involving Alter Sales Inc. describes it as “a Florida distributor of
automotive parts and accessories,” and identifies Marc Osheroff as the CEO. Those SEC documents also refer to a “Martin Clainey.” Clainey was an alias used by Phil Gurian, a fact not revealed in that particular litigation. It is not known whether other fictitious names appear in the SEC document.
Many documents in the Grand Jury case remain sealed.
The sealed indictment alleges the five men orchestrated an elaborate “pump-and-dump” scheme through brokerage houses controlled by Abramo and Gurian, resulting in the defendants reaping profits in the tens of millions of dollars.
The men solicited corporations who were in financial difficulty for the purpose of distributing stock to the public, including “Regulation S” and Initial Public Offering (IPO) distributions. “Regulation S” was a regulation promulgated by the Securities and Exchange Commission wherein restricted stock could be sold to foreign nationals with the provision that the stock certificates would be taken offshore and not sold for the required 40-day “safe harbor” period.
To that end, the defendants caused Bahamian companies to be formed for the purpose of obtaining discounted stock from the companies. The stock would then be sold at market value through Sovereign Equity Management Company – who manipulated the stock via a “pump-and-dump” scheme.
Sovereign Equity Management Corporation had its principal place of business at 5200 Town Center Circle, Boca Raton, and Falcon Trading Group was at the same location. Both were involved in stock brokerage services including the retail sale of securities to the public. Falcon was a hedge fund trading in its own account involving the purchase and sale of securities as well as “short selling” of securities. Glen Vittor is named as the sole stockholder and CEO of Sovereign and Falcon.
The indictment alleges that Gurian (a/k/a Martin Clainey), although barred for life from the securities industry by the NASD, had a hidden interest and exercised control over the trading decisions of both Sovereign and Falcon.
It also alleges that Phil Abramo, (a/k/a/ Lou Metzer) was a “capo” or “captain” of the DeCavalcante crime family of Cosa Nostra, and exercised similar control over the operations of the Sovereign branches located in Manhattan.
Louis Consalvo (a/k/a LOUIE “EGGS”) is described as the brother-in-law of defendant Philip Abramo, and a “made” member of the DeCavalcante family. “Made” members are also called “soldiers,” “wiseguys” and “goodfellas.” He is described as having relayed messages from Abramo to members of the Manhattan Sovereign management.
Barry Gesser allegedly owned and operated Atlantis Securities, Apollo Equities and Discovery Trading, their principal place of business being in Boca Raton, Fla.
The ‘pump and dump’
Sovereign brokers were instructed by the defendants to “pump up” the price of the stock of these financially troubled corporations with false statements as to the viability of the companies.
Sovereign brokers were provided with unlawful “juice” payments in order to “push” the stock on the investing public. The brokers were instructed not to permit retail customers to sell the stock, thereby keeping the price of the stock artificially high. When the price reached an acceptable level, the defendants “dumped” or sold their discounted stock for profits in the tens of millions of dollars.
Then Sovereign brokers would cease pumping the stock, while the defendants, through Falcon and other entities, then “shorted” the stocks. The term “selling short” means to borrow stock owned by others and in the custody of a brokerage firm and to sell it at the current market price, promising to replace the shares of stock so borrowed at a later date. Short sellers make money by betting a stock will go down, rather than up.
Many of the companies went bankrupt and the stock became worthless. The retail customers of Sovereign, and other brokerage firms that purchased the stock at the urging of Sovereign brokers, lost all or most of their investment. In the meantime, the defendants reaped tens of millions of dollars of profits, which was transferred to offshore corporations in the Bahamas that they controlled.
When the defendants could not find stock to borrow and sell “short” or to “cover” their “short positions,” the indictment alleges they engaged in extortion of other brokers in order to obtain the stock using their stated relationship to the “mafia” and also using threats to commit bodily harm.
Business Week reporter Gary Weiss previously reported that the DeCavalcante gang’s infiltration of Wall Street included the pistol-whipping of Wall Street brokers in order to force them to handle stocks according to the mob’s commands. Frightened brokers refused to go to the police. One allegedly went to another mob for protection, and subsequently received an expensive bottle of wine as an introductory “gift.” The DeCavalcantes’ Wall Street invasion was said to combine a brilliant knowledge of securities fraud and hair-trigger, grisly violence. Schoenfeld told WND on numerous occasions that the Weiss article was “excellent, very well-written.”
Murder, threats, money laundering
The indictment alleges that when money was authorized to be wire transferred by Joy Cartwright, described as a Bahamian nominee of one of the Bahamian corporations controlled by the defendants, she was murdered and the broker who had transferred the money was threatened with death.
On or about March 1995, Abramo and Gurian opened a brokerage account at Pacific International Securities in Vancouver, Canada, for Umbiquity Holdings (a/k/a/ Ubiquity Holdings.) Cartwright and Obie Pindling signed the account-opening documents.
Around February 1996, Jean Claude Hauchecorne, an account executive with Pacific International, received an authorization from Cartwright to wire $1.7 million dollars from the Umbiquity account at PIS, to an account in Hong Kong. The mob said Cartwright was stealing the money from them.
The indictment alleges that Gurian ordered Hauchecorne to return the $1.7 million from Hong Kong. Around May 1996, Abramo, using the name Lou Metzer, asked for a meeting with Hauchecorne in New York at the Drake Hotel.
He was in fact met by Abramo, Gurian and Consalvo who were reportedly armed with “handguns and a baseball bat.” They told the account executive that the $1.7 million transferred to Hong Kong was Abramo’s and “that he could kill Jean Claude Hauchecorne if the money was not returned.” The indictment stated that Gurian and Consalvo “assured Hauchecorne that he would be killed if the money was not returned.”
In June 1996, Joy Cartwright was “murdered in her sleep with two gunshot wounds to the back of her head.”
The hotel death-threat episode with Gurian and Abramo was later recounted in a dramatic Canadian courtroom scene, where Vancouver-based Pacific International was accused of having turned a blind eye to their many mafia and criminal clients who were engaged in widespread money laundering. The “unsavory characters” mentioned included Gurian and Abramo who were identified as “New York Mafia.”
Jean Claude Hauchecorne was banned for life in 1998 for servicing “New York Mafia clients” Phil Abramo and Phil Gurian. The two-year investigation of Pacific conducted by the Royal Canadian Police and the resultant hearings are believed to be the most comprehensive probe conducted into any brokerage in Canada in recent history.
After the Cartwright murder, the alleged killer, Ashley Newbold, fled the island but was recently returned.
Six years after the crime, the murder trial is just now under way in the Bahamas.
On March 3, an offshore source told WND in an e-mail, “the Bahamas police want to prosecute Obie Pindling for his alleged role in the murder of Joy Cartwright and the
politicians will not let them apparently.”
Three days later, Pindling was accused on the witness stand of being the trigger man.
According to the recent testimony, on the night of the murder Obie Pindling and Ashley Newbold were waiting for Cartwright to return home around 3:30 or 4:00 a.m. from her job as manager of the 601 nightclub.
An investigation is ongoing.
The sealed indictment also refers to a Joseph L. Lents from whom the defendants obtained stock. Lents, a resident of Boca Raton, was formerly CEO of Investco Inc., and was accused by the SEC of running a pump and dump in another litigation.
Schoenfeld told WND that he and Gurian were sources for Dow Jones reporter Remond for a previous article outing Investco. Remond followed it up with a negative piece on Gurian, which Schoenfeld called “unfair”: “She used his [Gurian’s] work and experience with some of these dudes to make a story about him.”
The sealed indictment alleges Gurian had previously made a death threat against Lents. In 1999, the indictment alleges Gurian “advised [Lents] that if he told the truth to Special Agents of the FBI [he] would end up like Joy Cartwright.”
As for money alleged to have been stolen during the conspiracy, recent testimony in the Cartwright case raised new mysteries, namely the identity of one Samuel “Ninety” Knowles.
Accused murderer Ashley Newbold testified that one day in the western portion of the island, he and Obie met with a man known as Samuel “Ninety” Knowles who asked Obie what he was going to do about the “money” Joyanne [Joy] had stolen from him. He said Obie told “Ninety” he was going to “deal with Joyanne.”
In January 2002, Gurian pleaded guilty to counts one and two of the indictment, which includes mail fraud, wire fraud and securities fraud. Gurian also agreed to cooperate fully in the investigation and prosecution of other persons in connection with charges in the case. A forfeiture of assets agreement including $7.5 million dollars and Gurian’s Boca Raton home was later struck and amended.
The ‘2 Phils’
The 1997 Business Week article on “The Mob on Wall Street” indicated law enforcement believed Abramo and Gurian were so closely connected that they referred to them as the “two Phils.”
This isn’t the only litigation naming the “two Phils.” Gurian was also named as a co-conspirator in another indictment handed down in the middle court of Florida.
In addition, Gurian was accused of having participated in a manipulative bear raid that caused the collapse of the Hanover Sterling brokerage. The Fiero Brothers of Pembroke Pines, Fla., were also named as key players in the Mafia-linked collapse.
Rounding up the real ‘Sopranos’
A year following the Florida indictment, the U.S. Attorney’s office in New York announced the unsealing of a 12-count indictment filed in Manhattan federal court charging 12 defendants, including virtually the entire ruling hierarchy of the DeCavalcante organized crime family of La Cosa Nostra, with wide-ranging racketeering and other charges relating to five murders, conspiracies to murder eight other individuals, securities fraud, loan sharking, gambling, extortion and obstruction of justice.
Included in the indictment are Phil Abramo and Louis (a/k/a/ LOUIE “EGGS”) Consalvo. Both are named in multiple counts of murder, along with Franky Scarabino (a/k/a/ “Franky the Beast”) and others. The murders included that of Frederick Weiss, editor for the Staten Island Advance, who was murdered to curry favor with John Gotti. Gotti feared Weiss, a former recycling executive, would testify against him in a trial regarding the mob’s control of that business. Abramo wanted DeCavalcante to become a subsidiary of the Gambino family.
Among Abramo’s alleged criminal activities were participation in three homicides, two conspiracies to murder, a conspiracy to commit securities fraud and loan sharking.
Among Consalvo’s alleged criminal activities were participation in a homicide, loan sharking, the operation of an illegal bookmaking business and a conspiracy to commit securities fraud.
In a bizarre twist, the indictment alleged that members of the mob also plotted to kill some of their co-defendants who were going to be named in the case. Barry W. Mawn, an assistant director in charge of the FBI’s New York office, put it this way: “The brutality of the members and associates of the DeCavalcante family on display in this indictment belies the Hollywood notion of organized crime members as colorful rogues who beat the system.”
FBI wiretaps revealed that theDeCavalcante gang thought of themselves as the mob that the hit-HBO series “The Sopranos” was based on.
The scientist and the ex-spook
Meanwhile, in the wake of the Dow Jones piece, HiEnergy affirms that it is entirely on the up and up, and that negative issues raised by the piece are completely irrelevant to the company, its technology, its financial position and its prospects.
Company management all said that the company plan was progressing well and moving forward. In an interview with WorldNetDaily, Yeffet, former head of the Israeli Secret Service, stated that he had personally viewed and tested HiEnergy’s technology. He indicated that he was impressed, that the technology was light years beyond anything currently being used, and that he emphasized the company’s need to decrease the detection speed time in order to attain full commercial viability.
HiEnergy Technologies boast proprietary rights to a neutron-based detection technology that it says can detect remotely and non-invasively such dangerous/illicit substances as explosives, liquid explosives, cocaine, anthrax and other biological and chemical threats. HiEnergy claims the technology then can display the exact chemical formulae of the contents of sealed containers.
The application the company jumped on was screening of baggage at airports and cargo containers. In addition, applications were seen in areas of customs law enforcement and mine detection.
When Yeffet was hired, he proclaimed he was going to create a “revolution” in aviation security. Some market watchers are getting tired of waiting for the “revolution” to happen, though. A cancelled public demonstration in September of last year gave some observers cold feet. HiEnergy Technologies’ PR firm offered to fly a WND reporter out to California to see the technology first-hand in action, but added that they are currently “disassembling” their equipment and moving elsewhere, and don’t know how long the disassembling will take, or where it’s being moved. For that reason, no date could be set to see the technology. In addition, HiEnergy currently has no accelerator for its “SuperSenzor” and is experiencing unexplained delays in obtaining one from a Colorado firm.
Cash-poor HiEnergy ponies up a cool $20,000 a month to retain Yeffet as a consultant and to push HiEnergy in media, government and other circles. Sources told WND they wondered why, when Yeffet was being paid such a high sum, he didn’t mention HiEnergy at any of his university speeches.
WND asked Yeffet whether he does mention HiEnergy at these speeches. He replied, “I just did for the first time,” adding that now he was “comfortable discussing the technology.” Yeffet came on board as a HiEnergy consultant in July of 2002.
An investor told WorldNetDaily that the fact Yeffet was still working with HiEnergy was proof it was a legitimate company. “It’s not like Yeffet’s saying, ‘Shalom,’ I’m out of here. I don’t want to hear any more b—s— about Gurian. Although I guess he could say, ‘For 20 grand a month, sure I’ll be a consultant.'”
Yeffet told WND that HiEnergy would be ready for an impressive public demonstration at the end of March or beginning of April, and that detection times were down to “seconds.”
HiEnergy’s other heavy hitter is physicist Dr. Bogdan Maglich, who formed the company in 1995.
Maglich, HiEnergy’s chairman and chief scientist, is described by the company as having received numerous awards and recognition for his work on subatomic particles, including a White House citation by President John F. Kennedy for his work on the discovery of the omega meson during World War II.
Maglich has also done work on aneutronic fusion (MIGMA), a process described as nuclear power that cannot be used to create a weapon.
HiEnergy’s PR firm provided the names of three individuals it said could vouch for the technology. Those were Dr. Robert Macek, director of the Proton Ring Laboratory at Los Alamos National Laboratory, Dr. Giovanni Fazio, professor of astrophysics at Harvard University, and Kevin Bell of U.S. Customs. WND contacted all three, and also asked HiEnergy to provide copies of the DoD contracts referred to in press releases, as well as independent verification of its testing claims. None of the requested information had been received at the time of publication of this report.