myself up on the yield curve, so to speak. On different methodologies available to me to raise money.”
The reverse merger was Jeffrey Pokross’s idea. The first time he pitched it, Cary had to ask him to slow down. When Jeffrey was pitching he often dropped into business jargon and cranked up the speed. He’d start jabbering like a chipmunk, presenting ideas as sure bets, big wins, profits guaranteed. This particular sure thing started with a reverse merger and relied heavily on Chinese action films.
Here the pitch could make your head swim. The company was to be called MPSC for Motion Picture Service Company. It would offer one-stop-shopping for making movies. You want to make a movie? You come to MPSC and they hand you a producer, a director, a film editor, a casting agent and everybody but the actors. Jeffrey claimed he was putting together heavyweight investors. MPSC would make a quick killing and he and Cary would walk away like lottery winners. There was nothing to it. They had two guys involved in producing and directing a TV crime show signed up. They even had a guy who’d directed some of the old Lost in Space TV episodes with the robot and “Danger Will Robinson!” and all that. They just needed a few more big-money types willing to commit some money up front so they could all be rich by Wednesday. Something like that.
But to reel in the big checkbooks, they needed Jeffrey Pokross to remain out of sight. They couldn’t offer even a hint of Jeffrey Pokross. That was where Cary came in. He could still claim to be a high-powered broker with a real broker’s license. He could still claim to be a former partner at Bear Stearns, a graduate of Stanford University. When you met him, you might think he was a paragon of legitimacy. Here was a guy, you might think, who knew what he was doing. Here was a guy who could bring in the serious investors who have the good sense to jump on an opportunity when it presents itself. Three million dollars would be great, $3.5 million would be better.
The fact that MPSC had absolutely no assets to speak of was not a problem. Jeffrey Pokross proposed a classic bit of “lead into gold” legerdemain—the reverse merger. Cary—the guy with the broker’s license—was learning from the guy who’d taken a few graduate business courses at Monmouth College, home of the Fighting Scots. He listened and learned.
Jeffrey’s plan went like this: They started with a publicly traded company called Unicom Distributors that owned 250 Chinese martial arts movies and sold its stock in the loosely regulated, highly speculative over-the-counter market. Unicom had a key piece of paper necessary when creating the aura of legitimacy—an audit signed off on by Arthur Andersen, claiming the Chinese action flicks were worth $38 million. Step one complete.
Step two: Unicom “bought” MPSC, a company that existed only in the minds of Jeffrey Pokross and Cary Cimino and possibly the guy who directed the robot who says “Danger Will Robinson!” Now MPSC was a wholly owned subsidiary of the heretofore nonexistent company that was really just Unicom. Now MPSC could claim Unicom’s $38 million in assets as its own and MPSC could borrow against that to build up the company’s appearance before taking the company public and then selling MPSC as a separate entity. Unicom—the money behind the façade—told investors it was going to make a killing in the emerging video market by putting its entire kung fu collection on video.
Step three was where Cary’s girlfriend and her rich parents came in. The family’s purchase of Lowenthal was specifically intended to generate more fees for Cary and Jeffrey and all the others involved in the deal. Lowenthal was to be the financial underwriter that would handle the reverse merger of Unicom and MPSC.
There was only one problem: in 1990, the market for Chinese action movie videos was going nowhere. The only “assets” behind the whole Potemkin
The reverse merger was Jeffrey Pokross’s idea. The first time he pitched it, Cary had to ask him to slow down. When Jeffrey was pitching he often dropped into business jargon and cranked up the speed. He’d start jabbering like a chipmunk, presenting ideas as sure bets, big wins, profits guaranteed. This particular sure thing started with a reverse merger and relied heavily on Chinese action films.
Here the pitch could make your head swim. The company was to be called MPSC for Motion Picture Service Company. It would offer one-stop-shopping for making movies. You want to make a movie? You come to MPSC and they hand you a producer, a director, a film editor, a casting agent and everybody but the actors. Jeffrey claimed he was putting together heavyweight investors. MPSC would make a quick killing and he and Cary would walk away like lottery winners. There was nothing to it. They had two guys involved in producing and directing a TV crime show signed up. They even had a guy who’d directed some of the old Lost in Space TV episodes with the robot and “Danger Will Robinson!” and all that. They just needed a few more big-money types willing to commit some money up front so they could all be rich by Wednesday. Something like that.
But to reel in the big checkbooks, they needed Jeffrey Pokross to remain out of sight. They couldn’t offer even a hint of Jeffrey Pokross. That was where Cary came in. He could still claim to be a high-powered broker with a real broker’s license. He could still claim to be a former partner at Bear Stearns, a graduate of Stanford University. When you met him, you might think he was a paragon of legitimacy. Here was a guy, you might think, who knew what he was doing. Here was a guy who could bring in the serious investors who have the good sense to jump on an opportunity when it presents itself. Three million dollars would be great, $3.5 million would be better.
The fact that MPSC had absolutely no assets to speak of was not a problem. Jeffrey Pokross proposed a classic bit of “lead into gold” legerdemain—the reverse merger. Cary—the guy with the broker’s license—was learning from the guy who’d taken a few graduate business courses at Monmouth College, home of the Fighting Scots. He listened and learned.
Jeffrey’s plan went like this: They started with a publicly traded company called Unicom Distributors that owned 250 Chinese martial arts movies and sold its stock in the loosely regulated, highly speculative over-the-counter market. Unicom had a key piece of paper necessary when creating the aura of legitimacy—an audit signed off on by Arthur Andersen, claiming the Chinese action flicks were worth $38 million. Step one complete.
Step two: Unicom “bought” MPSC, a company that existed only in the minds of Jeffrey Pokross and Cary Cimino and possibly the guy who directed the robot who says “Danger Will Robinson!” Now MPSC was a wholly owned subsidiary of the heretofore nonexistent company that was really just Unicom. Now MPSC could claim Unicom’s $38 million in assets as its own and MPSC could borrow against that to build up the company’s appearance before taking the company public and then selling MPSC as a separate entity. Unicom—the money behind the façade—told investors it was going to make a killing in the emerging video market by putting its entire kung fu collection on video.
Step three was where Cary’s girlfriend and her rich parents came in. The family’s purchase of Lowenthal was specifically intended to generate more fees for Cary and Jeffrey and all the others involved in the deal. Lowenthal was to be the financial underwriter that would handle the reverse merger of Unicom and MPSC.
There was only one problem: in 1990, the market for Chinese action movie videos was going nowhere. The only “assets” behind the whole Potemkin
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