Plato-quoting, West Point valedictorian, Rhodes scholar, former NATO Supreme allied commander, and one-time Presidential hopeful Gen. Wesley Clark had a carefully laid, three-point plan for life after public service. Here’s how The NY Times described it over a decade ago:
In searching for an aperture into civilian life, he sketched out three fresh careers. First he would enter business and amass $40 million (a figure he plucked out of the air to have a goal) and metamorphose into a modest version of George Soros, the billionaire philanthropist. That done, he would recede into a university and teach leadership. He would also work at compressing his golf handicap (last seen stuck at 18) in preparation for Career No. 3: a teaching golf professional.
As it turns out, the part of that plan that would be most difficult for the average person (making $40 million) is much easier when your political and military career affords you lucrative business opportunities — like becoming the chairman of a notorious penny-stock-pushing, Chinese-fraud-promoting investment bank.
Via ABC (from 2013):
The SEC has brought more than 40 civil cases against Chinese firms, and the former head of the financial watchdog agency told ABC News that investigators were also looking into the conduct of key players in the U.S. who promoted the Chinese firms to potential investors.
One of the firms that pushed most aggressively for investment in Chinese companies was Rodman & Renshaw, a boutique operation based in New York and chaired by Clark, the retired four-star general and war hero who mounted a bid for the Democratic presidential nomination in 2004. Clark became chairman of the investment firm in 2009, just as it was emerging as a central player in the China investment wave...
"Our firm was a leader in bringing small and medium-size Chinese companies to the U.S. capital markets," he said. "No one is more disappointed than the bankers at the firm that some of these companies -- despite receiving consistently clean bills of health from well-respected lawyers and auditors -- apparently concealed improper business practices."
The general did not run day-to-day activities at the firm, instead chairing board meetings and lending his star power during extravagant annual conferences, where investors were invited to hear presentations from dozens of Chinese companies trying to attract financing as they joined American stock exchanges. The conferences were luxurious affairs held at the Waldorf in New York and Le Royal Meridien Hotel in Shanghai. Henry Kissinger spoke at one, former Sen. Chris Dodd, D.-Conn., at another. Diana Ross performed, as did En Vogue.
Rodman & Renshaw shuttered its securities business following the Chinese fraud revelations, but that hasn’t stopped Clark from pitching pennies so to speak. As Bloomberg reports, Clark has lent his name (and fame) to at least 10 OTC companies ranging from a food truck operation aimed at convincing veterans to become traveling grilled cheese salesmen to a hydroponic lettuce outfit run by the trader who inspired Charlie Sheen’s Bud Fox.
Here are the details:
Sixteen years ago, Wesley Clark was the four-star U.S. Army general running the Kosovo war. These days, he’s been pitching food-truck franchises to military veterans and helping a convicted felon raise money to grow hydroponic lettuce...
Since he ran for president in 2004, Clark has joined the boards of at least 18 public companies, 10 of them penny-stock outfits, whose shares trade in the “over the counter” markets, a corner of Wall Street where fraud and manipulation are common.
All but one of the 10 lost value during Clark’s tenure. Three went bankrupt shortly after he left their boards, and the chief executive officer of one pleaded guilty to fraud. Only four of the 30,958 people in Bloomberg’s database of over-the-counter board members have served on more boards than Clark...
Besides serving on boards, Clark has worked as a consultant and an investment banker. His clients include the man behind the lettuce project, Dennis Levine, whose role in a 1980s insider-trading ring helped inspire the Charlie Sheen character in the movie Wall Street…
Levine, Clark’s client in the lettuce venture, pleaded guilty to securities fraud in the 1980s investigation that brought down Ivan Boesky and Michael Milken, the junk-bond king. A dapper dresser who drove a red Ferrari, Levine served two years in prison and was banned from the securities industry for life. In December, Clark helped Levine raise $500,000 from two investors through a small investment bank he runs, Enverra Capital. Securities filings show that was the first step in a planned $5 million fundraising. “We checked him out,” Clark says, “and he seemed honest and legitimate in this business”...
Levine runs VFT Global which, according to its website, “has integrated technologically advanced farming methods with greenhouse crop growing experience to develop innovative CEA production technology.” Only they haven’t. Here’s Bloomberg again:
Levine, 62, acknowledges in an interview that the company has never grown anything.
In the interim period between not growing anything at all and “blanketing the United States” with hydroponic lettuce facilities, Levine decided to become a distributor, but ultimately discovered that suppliers expect to be paid:
One of his growers, in Cleveland, claims in a lawsuit that VFT fell behind on its bills within 11 weeks of signing a contract and now owes about $167,000.
Levine’s explanation: bad lettuce.
Levine says the lettuce was of low quality or never delivered.
And as for the food trucks…
Clark says his role in the grilled cheese venture is to find military veterans to staff the trucks or buy franchises. He was brought in and promised fees of more than $200,000 a year by a group of penny-stock promoters who’d taken over a couple of orange-colored trucks in Los Angeles that had developed a following for their mac-and-rib-and-cheese sandwiches…
The company raised $5 million in private sales of securities, and its stock started trading in January, giving it a market value of $108 million—about $10 million for each truck in operation. The stock has declined almost 70 percent since then. The company’s executives have paid themselves more than $1.7 million, which doesn’t include Clark’s fees…
Here is how The Grilled Cheese Truck (to which we introduced readers in February) describes the business opportunity available to veterans:
Thank-you for Your Interest in Our Veteran Program!
The Grilled Cheese Truck started Melting the streets of Los Angeles in 2009. We have since been named the #1 food truck in Los Angeles several times and have appeared on numerous television shows and interviews. Our Melts have been listed as some of the best sandwiches in the country. After being embraced by the local cheese loving crowds as well as the media, we saw that our concept needed to be expanded so the rest of the world can taste our cheesy Melts.
The Grilled Cheese Truck Inc. has committed the first 100 trucks to be run by qualified Veterans. We feel that the skill set developed by a veteran’s military training lends itself incredibly well to operating one of our Trucks.
Owning a business is not for everyone. For us at The Grilled Cheese Truck, it takes a sense of commitment to the product as well as maintaining our high standards of incredible customer service.
Operating a food truck requires hard work, long hours and the ability to think under pressure while being able to smile at our guests. Managing a staff of 5 or more crewmembers while overseeing the truck’s operations is a responsibility that takes a lot of time and effort.
If you feel you’re ready to be a business owner and are intrigued by a possible future with The Grilled Cheese Truck, please print out this form and email it back to us.
We look forward to hearing from you and thank you for serving our country!
How would the five veterans who have so far participated rate their experience with the company you ask?
“We all felt very used and abused. We quit because of all the lies and bullshit.”
Here is a look at Clark's sterling track record:
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As for Clark, he doesn't buy the idea that his name and face are being used to lure unsuspecting investors and project a false air of legitimacy.
Clark: "Nobody’s going to invest in a company just because General Clark is a director."
Perhaps he meant to say "nobody smart" because while being a war hero is probably helpful when you're trying to turn veterans into grilled cheese purveyors, having a reputation as a penny stock pusher is a contrarian indicator for hedge funds:
“His appearance on a board is a huge red flag,” says Joe Spiegel, whose fund, Dalek Capital Management, made money shorting the stock of one of Clark’s ventures. “These companies use people’s names to get legitimacy”...