By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
By Deirdra Funcheon
By Kyle Swenson
"I want to turn the company around," he says. He's been with GlobeTel only since October, well after the worst of last year's debacles. And he knows he has a lot of mending to do, particularly in reassuring shareholders who aren't happy.
"I think it's just sad," he says of investors, some of whom are suing the company over its losses. "They had an expectation that wasn't met. We owe it to people to do the best that we can." And he points out that the company has had some recent successes: A wireless contract in Mexico seems to be a step in the right direction.
Khoury won't speak ill of his predecessors. He is the medicine brought in to heal the patient and doesn't want to assign blame. "I wouldn't judge anybody. What I can tell you is what I have today and what I'm working toward... I was asked to come in and fix the company."
And he's got plenty of mending to do if he's going to take GlobeTel up, up, and away.
Before blimps and telecom and high-tech dreams, a company named Terra West Homes was birthed in Nevada in 1979 to build houses in the desert. Later, it peddled shock absorbers, then in the late 1990s sold pharmaceutical and medical supplies, including syphilis detection kits, in places like West Africa. By the end of the century, renamed American Diversified Group Inc. (ADGI), the company had moved to Hickory Hill, North Carolina, and was in the computer business.
But in 2000, ADGI began another transformation, purchasing a couple of small telecom businesses: Miami-based Global Transmedia Communications and NCI Telecom of Missouri. The new, telecom version of ADGI worked out of Miami before moving to the 'burbs.
And in 2002, the company began earning its reputation for, well, inflated rhetoric and gasbagging.
That year, a stock analyst named Paul Taboada at the brokerage house Hornblower & Weeks began releasing sunny statements about ADGI's plans and prospects. It was exactly the kind of thing some investors look for positive news from a reputable trading house about a little-known company about to explode.
But what Taboada didn't mention was that Hornblower & Weeks was also an ADGI client. The company had paid the brokerage firm $30,000 for consulting work, as well as 10 million shares of ADGI stock it valued at $200,000.
Taboada's glowing reports had also failed to mention that ADGI had lost more than $1 million in 2001, had accumulated a debt of more than $20 million, and was hanging on mainly through loans provided by its own executives.
The National Association of Securities Dealers later found that Taboada's reports were such a breach of its practices, it fined him $25,000 and suspended his license for six months.
But the analyst did all right in the end. After the run-in with regulators, he took a new job as a consultant with GlobeTel, ADGI's newest incarnation.
Meanwhile, in Atlanta, a man named Michael Molen was making news for his wild ideas about blimps. In 2002, Molen told the Toronto Star that the "stratellites" of his company, Sanswire, would be working in the stratosphere in "early 2004" at a cost of $36 million. Molen's spiel attracted small investors who wanted in on his scheme.
By early 2004, Molen wasn't any closer to launching blimps, but at that point, he did hire a designer: California garage inventor Vern Koenig, who is something of an enigma. Although he says he has a college degree in naval architecture, Koenig refuses to say where he earned it. He also claims that GlobeTel's competition, Lockheed Martin, which is developing its own set of blimps for homeland security applications, is a front for the CIA. In addition, Koenig recalls that he once sold a model of the Hindenburg to the Ripley's Believe It or Not! museum in Los Angeles for $20,000.
Somehow, in his busy schedule, Koenig stumbled across information about Molen and his stratellite concept on the Internet early in 2004. Koenig made a phone call, "and the next minute, I'm signing an agreement with Mike Molen," he says. "Essentially, that's how I got involved."
Molen wanted progress from Koenig, fast. In August 2004, Molen had promised to fly something for a group of interested investors, including GlobeTel's then-CEO, Timothy Huff.
"They wanted an airship from me to take up a 25-pound payload," Koenig says. But Molen hadn't sent him the money he needed for an August demonstration. "[Molen] calls me up one day and says 'How's the airship coming?' and I told him it's not.
"Apparently, Molen borrowed $10,000 from GlobeTel to buy an ultralight airplane. I got half the airplane built, and I threw it into a rented truck and drove from Redlands, California, to Atlanta. I finished the airplane in Atlanta, and the test was near the airport."
The plan for the test, since stratellites didn't exist yet, was to attach communications gear to the ultralight airplane for a short flight to demonstrate that a craft aloft in the atmosphere could beam down signals the way a satellite in space does. But there was a hitch.
"I told him I can't fly an unlicensed aircraft in commercial airspace. And he said, 'If you fly up there, how much would the penalty be?'"