Greg Manning !!!!Noticias desde Australia
Securities and Exchange Commission
100 F Street, N.E. Mail Stop 4010
Washington, D.C. 20549-4010
Tele: (202) 551-4468 [Peterson] Fax: (202) 772-9245 [Peterson]
Here is small part of what the PDF alleges:
18. Despite having discovered stamps with an alleged estimated value of $200 to $300 million to be forgeries in Afinsa's vault, Manning completed the Escala/Afinsa business combination transaction without disclosing the existence of the forgeries to others at Escala.
C. The Afinsa Supply Agreement
19. Escala was under tremendous pressure as the exclusive supplier of stamps to Afinsa. Afinsa's stamp needs were enormous and critical to its continued operation. Because it promised to buy back its stamp portfolios at 100 percent of the initial sale price plus interest, Afinsa required increasing numbers of investors and, in turn, increasing volumes of stamps to sell to them.
For each subsequent year, Afinsa had to increase the volume of stamps it sold in order to make new profits and to cover losses incurred for repurchases and interest. In other words, more new sales each year meant more repurchases in future years which in turn required more new sales. Manning understood the tremendous pressure Afinsa was under to maintain its Ponzi-like investment program.
D. The Brookman Agreement
20. To ensure that it could keep increasing the catalogue value of the stamp portfolios that it marketed to investors, Afinsa wished to control a pre-existing, international stamp catalogue. In an internal Afinsa report, the company stated: "Steps are being taken to control an international catalogue or to create our own in order to be able to fix prices in accordance with our philosophy."
In the words of a principal of Afinsa: "If we allow a third party to put out the prices, we are really in his hands, which cannot be admissible given the nature of our business."
21. Afinsa's discussions about controlling its own catalogue were occurring in the early stages of the Escala/Afinsa business combination negotiations - and included Manning.
Recognizing Afinsa's interest, Manning proposed that Afinsa consider entering into an arrangement with Barrett & Worthen, the current owner of the Brookman Catalogue - a stamp catalogue that Manning had owned before he sold it to a close family friend in 1983.
Manning told Mmsa: "I believe that a deal could be set up with [the current owners] staying on to run the entire operation .... We would have complete editorial control over the prices in the catalogue, but we can still use the current editors for the bulk of the work."
22. On behalf of Afinsa, Manning actively engaged in the negotiations with Barrett & Worthen focusing on editorial control of the Brookman Catalogue. On June 16,2003, Afinsa and Barrett & Worthen signed an agreement (the "Brookman Agreement") that Afinsa would pay $650,000 in annual payments of $65,000 for ten years.to Barrett & Worthen and would gain "full and final editorial review and control of the content and form of each edition of the Brookman Catalogue published during the term of [the] agreement"
"And that this "control and review shall include, but not be limited to, the final review of all pricing, the preparation and revision of all descriptions and the deletion and/or addition of material, in each case as [Afinsa], in its sole discretion, may determine ...."
The Brookman Agreement provided for confidentiality and non-disclosure of its contents. Manning negotiated the Brookman agreement, and it was drafted in-house at Escala. Crawford learned of the agreement while it was being drafted in-house.
23. Neither Manning nor Crawford told Escala's Audit Committee about the Brookman Agreement. Escala did not disclose the agreement publicly or mention it in any of its quarterly or annual reports that it filed with the SEC.
To the contrary, Escala remained silent on the matter and Afinsa sought to portray the Brookman Catalogue as an independent entity. In October 2003, an Afinsa representative thanked Manning for negotiating the Brookman deal and reminded him that "our name must not appear" in any Brookman Catalogue.
etc .... and this little gem. Some of the massive $$ figures in this evidence brief are astounding.
1. The Rapidly Rising Catalogue Values of the ABN Specimens
56. Manning determined the values for the ABN specimens which were to appear in a proposed future edition of the Brookman catalogue that ultimately was never published. Escala prepared spreadsheets containing these values.
In the months before Escala's first shipment of ABN Specimens to Afinsa in February 2004, Manning had estimated supplying approximately €60 million (as of February 1,2004 €60 million equaled approximately $74.8 million) catalogue value but had told Afinsa that a Brookman Catalogue draft could be finished in January with a catalogue value of approximately €30 to 40 million (as of February 1,2004 €30 to 40 million equaled approximately $37.4 to $49.8 million).
Manning also told Afinsa that "the new Brookman] catalogue will absolutely follow our suggestions about prices." As with the UN Archive, the catalogue values continued to rise.
57. With respect to Escala's first sale of ABN specimens to Afinsa, Manning used a catalogue that the two brothers had prepared as a starting point for setting the catalogue values. But Manning dramatically increased the prices of each item.
Thus an item listed in the Morowitz catalogue for $6 was listed in Escala's spreadsheet for €130 (as of February 1,2004 €130 equaled approximately $162).
58. In December 2004, after selling Afinsa ABN specimens worth a purported $266 million in catalogue value, Manning responded to an Audit Committee request and calculated the total catalogue value of ABN specimens that Escala had remaining in inventory. The amount was a staggering $512,348,355.
All told, the total alleged catalogue value set by Manning for the ABN specimens held by Escala, and purchased for approximately $850,000, approached $778 million.
etc, etc.
Essential reading, it really is.