Another Tucker?- Founder World Transport Authority Arrested
NEW YORK, Feb 21, 2003; Gail Appleson wrting for Reuters reported that the founder of World Transport Authority Inc.,a company that sells licenses to build a low-cost utility vehicle, was arrested on Friday for allegedly causing the company to lie about its expected sales.
Douglas Norman, 61, a Canadian citizen who lives in El Cajon, California, was indicted for allegedly scheming to boost the company's share price in 2000 and 2001 and then selling his holdings for more than $1.6 million. The indictment was unsealed on Friday in Manhattan federal court.
Norman, who was arrested at his home, is charged with one count of securities fraud. If convicted, he could face a maximum prison sentence of 10 years and a $1 million fine.
Also on Friday, the U.S. Securities and Exchange Commission (News - Websites) filed a related civil suit against Norman accusing him of a carrying out a "campaign of deception." The suit seeks a court order forcing him to repay the illegal profits and barring him from acting as an officer or director of any publicly traded company. It also seeks unspecified penalties.
Neither Norman nor a spokesman for the company could immediately be reached for comment.
World Transport Authority, located in El Cajon, California, sells licenses for the manufacture of the low-cost WorldStar utility vehicle.
Federal authorities said Norman is the self-described founder of the company and the controlling stockholder. Both the civil and criminal cases said he is the vice president of international sales, and a company employee confirmed that he still holds that title.
WTA's Web site states that the WorldStar vehicle costs less than $7,000, has fewer than 500 moving parts and runs on three types of fuels. It says the company "provides the capability for emerging nations throughout the world to be automobile and truck producing countries."
Authorities said WTA's core business is promoting the sale of the vehicle and a system to make it. They said the company's literature claims that a "micro-factory" to make the cars can be built in about 90 days.
To carry out its business, the company sells "master licenses" that gives the licensee an exclusive marketing territory, typically covering one or two countries or a geographic region.
The indictment alleged that Norman schemed to inflate WTA's stock price by authorizing the company to issue a series of false press releases and by paying a consultant to post misleading statements on Internet message boards about the company's activities and expected WorldStar and license sales.
Norman knew that WTA faced substantial obstacles in making money from WorldStar sales as the vehicle was not ready for production at the time of the releases and postings, the indictment charged.
The WorldStar vehicle also had not received government approval for production or sale in the countries where production was to occur, according to the charges.
The indictment charged that the false statements convinced numerous investors to buy WTA common stock and that some of them bought their shares directly from Norman. He then sold large amounts of the stock, reaping more than $1 million in illegal profits, it said.