A company whose touch-screen voting machines won state certification
in Missouri last month has been raising money through stock placements that
found their way to unlicensed securities "boiler rooms" in Europe.
AccuPoll Holding Corp.'s filings with the Securities and Exchange Commission
show that the company's financial backers include the children and business
associates of a man who went to prison for fraud in the 1990s.
AccuPoll, a publicly traded company with headquarters in Tustin, Calif., declined
to comment Friday on its finances or the offshore share sales.
"It is our policy not to publicly speculate on transactions allegedly
made by some of our stockholders or some of our stockholders' affiliates, especially
when we are not a party to such alleged transactions," said William E.
Nixon, its president and chief executive.
His comment was a written reply to questions submitted by the Post-Dispatch.
People who bought AccuPoll shares from the foreign brokerages have
lost much of their initial investment.
AccuPoll's SEC filings show that its early investors include two companies
managed by adult children of Sherman Mazur, a one-time real estate magnate in
Mazur, 56, pleaded guilty to seven counts of bankruptcy and tax fraud after
his empire collapsed. He was sentenced to 1993 to six years in prison.
A group of 24 St. Louisans who invested in property he managed won a $3.2 million
civil judgment against him. For more than a decade, they have been unable to
collect the money or identify assets in his name.
AccuPoll is one of at least four publicly traded companies that have listed
Mazur's children as stockholders, Post-Dispatch research shows.
Shares of all four companies have been peddled to foreign investors
by overseas firms that regulators warned were unlicensed telemarketing operations,
known as "boiler rooms." Each stock declined sharply in value, leaving
buyers with little to show for their money.
AccuPoll's affiliations could prove troubling to election officials,
given public concerns about accurate vote tallies and the security of computerized
voting systems, said Bev Harris, founder of Black Box Voting, an advocacy group
in Renton, Wash.
"All it takes is one person who has criminal or ethical problems,"
said Harris, whose organization investigates the reliability of touch-screen
and other computerized voting machines. "That pretty much throws the whole
integrity of the system into question."
AccuPoll says it intends to wrest business from the industry's established
suppliers with a computerized system that prints a paper receipt confirming
each user's choices.
The company also is seeking certification in Illinois and has been cleared
to sell its machines in at least 10 more states.
Although the financing questions don't affect the security of the machines,
they could undermine their acceptance, said G. Terry Madonna, director of the
Center for Politics and Public Affairs at Franklin & Marshall College in
"This is a very touchy subject," he said. "All of it is against
a backdrop of uncertainty and distrust."
AccuPoll's SEC filings also show that the company got financing and consulting
services from businesses managed by a lawyer named Reid Breitman. Those entities
used the same address that Sherman Mazur and his children have used in corporation
Breitman, 38, declined to comment Friday, saying he adopted a policy of not
talking to reporters after another publication unfairly drew an association
between him and a "criminal" who once leased the office he now occupies.
The building, a former art gallery in Santa Monica, Calif., also has been used
by Regis Possino, 57, a disbarred lawyer with separate convictions for drug
dealing and fraud.
Four overseas brokerages have marketed AccuPoll's shares to European investors.
Regulators in Spain and Great Britain issued warnings about two of the firms,
Anderson Fitzpatrick AG and Tana Corum Holdings, saying they were offering investments
without proper licenses.
Focus on technology
The Missouri secretary of state's office, which oversees election issues, was
unaware of AccuPoll's financial backers or the sale of the company's shares
by overseas brokerages, spokeswoman Stacie Temple said.
Missouri's certification process for election equipment focuses exclusively
on the integrity of the machine and its technology, Temple said.
The same is true for Illinois, said Daniel White, executive director of the
Illinois State Board of Elections.
"If we do learn of those things, the board would certainly take a look
at it," he said, referring to questions about companies' financing and
AccuPoll says 10 other states already have approved its systems - Alabama,
Arkansas, Ohio, South Dakota, Utah, Kansas, Kentucky, Louisiana, Pennsylvania
and West Virginia.
The company has signed up just two customers, a pair of small Texas counties,
that are awaiting that state's certification.
The Post-Dispatch has been tracking AccuPoll as part of its continued monitoring
of overseas boiler rooms, which push foreigners to buy stock in small American
companies with limited business histories, revenue and capital.
A series of Post-Dispatch stories last year showed how the operations took
in hundreds of millions of dollars by selling inflated shares in roughly 200
public and private U.S. companies. Those shares invariably plunged in value.
The telemarketing operations are called boiler rooms because they use high-pressure
sales tactics to promote risky or fraudulent investments. They typically operate
from hidden locations, and their brokers often use false names.
In many cases, they sell shares that are restricted from resale on the U.S.
market for one year. Most foreign investors who bought shares of the other three
public companies with Mazur children as stockholders lost nearly all of their
money. Only one of the companies still exists in its original incarnation, and
its shares trade for a fraction of a penny.
A compelling story
AccuPoll was incorporated in 2001, in the aftermath of the bitterly disputed
2000 presidential election. The company says its system, which includes a printed
verification slip, provides better assurances that each ballot is recorded accurately.
AccuPoll is hoping to capitalize on the nationwide modernization of voting
equipment inspired by the Help America Vote Act, which allocated $3.9 billion
in federal money for replacing manual punch-card systems.
AccuPoll became publicly traded in 2002, when it merged with Western International
Pizza Corp., a dormant Salt Lake City business whose shares were still registered
with the SEC.
As part of that transaction, a group of AccuPoll investors split 18.6 million
shares of the combined company's stock, or roughly a fourth of the total changing
hands, SEC filings show.
One of those investors, a limited-liability corporation that got 4.2 million
shares of stock, was managed by Jamie A. Mazur, 27, Sherman Mazur's son. Another
limited-liability corporation, which got 4 million shares, was managed by Jennifer
Mazur, 26, Sherman Mazur's daughter.
In addition, AccuPoll issued 3.8 million shares as a retainer to three consultants
- Jamie Mazur, Breitman and GCH Capital Ltd. The company gave them warrants
to buy 2 million more shares at a discounted price.
Breitman once was managing director of GCH Capital. He also manages Palisades
Holdings LLC, which provided AccuPoll with $1.9 million in loans that were convertible
California corporation filings lists GCH's address as 2224 Main Street in Santa
Monica, Calif. AccuPoll's agreement with Palisades Holdings lists the same address
for that company.
The address also appears in the Nevada corporation filing for a business that
Sherman Mazur incorporated in December.
A Canadian newspaper, the Vancouver Sun, published a set of articles July 25
that identified Sherman Mazur as a behind-the-scenes player at General Commerce
Bank AG, an Austrian firm that pushed shares of obscure U.S. companies.
Before Austrian authorities shut down General Commerce in 2001, regulators
in other nations had added it to their list of operations selling securities
without proper authorization.
California corporation records show that in August 2001, the mailing address
for GCH Capital was in Vienna and matched the address used by General Commerce
Rakesh Saxena, an international fugitive under house arrest in Canada, told
the Vancouver paper that he had enlisted General Commerce to sell shares of
several unlisted companies. He said the firm used boiler rooms in Spain, Germany
and Belgium to market the stock.
The story identified the operators of General Commerce as Sherman Mazur, Possino
and Raoul Berthaumieu, who went to prison in the early 1990s for writing $1.6
million in bad checks on a Los Angeles bank account, depositing them at the
old Centerre Bank of St. Louis (later Boatmen's, now Bank of America) and withdrawing
None of the three men has been charged with any wrongdoing in connection with
Saxena is wanted in Thailand in connection with the collapse of the Bangkok
Bank of Commerce in 1996. Saxena, who is accused of defrauding the bank, was
arrested in Canada and has been fighting extradition for nine years.
Two AccuPoll executives came from other public companies that received financing
and consulting services from the Mazur children, Breitman, Possino or some combination
of those sources.
Chester L. Noblett Jr., AccuPoll's executive vice president for sales and marketing,
previously was chairman and chief executive of eSat Inc., a broadband communications
company. Two of Mazur's children, Emily and Trent, were shareholders. They filed
to sell $960,000 of eSat shares in the spring of 2000 - while they were still
Shares of eSat were marketed to foreign investors by securities boiler rooms
operating out of Asia. The company later went out of business.
Craig A. Hewitt, who until May was AccuPoll's chief financial officer, previously
was chief financial officer of Junum Inc., a credit repair and monitoring firm.
Junum had a financing agreement with Breitman's Palisades Holdings and consulting
agreements with GCH Capital and Jamie Mazur.
Junum gave up on its credit business in 2002 and merged into a company that
develops lottery games for international markets.
AccuPoll is facing long odds for success.
The company reported $1.22 million in revenue for the nine months that ended
March 31, with all of the money coming from a subsidiary that specializes in
installing and servicing computer printers and other hardware.
AccuPoll posted a loss of $7.81 million for the same period. That figure included
nearly $4.6 million in general and administrative spending and $2.6 million
in professional fees.
AccuPoll had a little less than $73,000 in cash on March 31, the date of its
most recent quarterly report. The company warned that it would require "substantial
additional funding for obtaining regulatory approval, commercialization of its
product, and for continued product improvement."
AccuPoll's stock closed at 14.5 cents a share Friday in trading on the over-the-counter
market, down 96 percent from its high of $3.82 in February 2004.
AccuPoll's lack of resources makes it unlikely that the company will dislodge
the industry's leaders, Diebold Corp., Election Systems & Software Inc.
and Sequoia Voting Systems, said Harris, of Black Box Voting.
"There's a lot of money greasing the skids for these purchases,"
she said. "The lobbying dollars are just stunning. That works against the
The number of systems the bigger companies have in service also works against
the upstarts when election boards are considering equipment purchases, Madonna
"If you have a base of operations with sales and satisfied customers,
it's a lot easier than taking a flier on someone new," he said.
The potential market for AccuPoll's products in Missouri is limited. Most local
election boards that are buying electronic voting machines in the state have
been buying optical-scan machines instead of touch-screen machines, because
optical-scan units are less expensive.
But people elsewhere who have used AccuPoll's equipment were impressed.
"I was amazed at how fast they were and how easy they were for our people
to understand," said Jean Milka, chairwoman of the Democratic Committee
of Allegheny County in Pennsylvania.
The group used the machines this spring at AccuPoll's invitation to decide
on party endorsements for the Democratic primary, she said.
The machines - which resemble a computer monitor married with a printer - were
easy to move and easy to set up, Milka said. And the paper receipts inspired
confidence, she said.
"I just thought it was a great system," she said.