Broadband Wireless seeks to file Chapter 11
Monday, November 26th 2001, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ A federal court hearing is scheduled next month for the troubled Broadband Wireless International Corp., whose former president is believed to be hiding in Central America after allegedly bilking investors in a stock scheme
The company's board of directors plans to ask to move from receivership to Chapter 11 reorganization when they appear in the Western District of Oklahoma Federal Court on Dec. 17, the company said Monday in a news release.
Broadband's former president, Donald L. Knight, stole millions of dollars from investors in a stock manipulation scheme, authorities said. They believe he is living in a luxurious villa in Costa Rica.
Knight, of Edmond, disappeared in August 2000 shortly before lawsuits were filed by the U.S. Securities and Exchange Commission and the state Securities Department.
The lawsuits accused Knight and former Broadband President Ivan Webb of releasing untrue Internet postings to artificially drive up the company's stock 10,000 percent _ from pennies to more than $12.
Securities officials accused Knight of creating a ``pump and dump'' scheme in which Knight dumped _ or sold _ millions of shares of his stock and collected $5 million.
In May and June, a judge jerked about 15 million shares of Broadband stock away from shareholders who received stock illegally or as gifts. The canceled stock included about 4 million shares owned by Donald Knight and 50,000 shares owned by his wife, Kimberly.
A federal bench warrant was issued for Knight's arrest when he failed to appear in court on Aug. 31 for a probation revocation hearing. He is on probation on a charge of wire fraud in connection with an earlier scheme. He spent three years in prison on that charge.
The SEC has received e-mails Knight has sent from overseas through someone else, but they cannot legally nab him. Officials say a bench warrant is not significant enough for Costa Rican authorities to extradite Knight or deport him.
The extradition treaty between the U.S. and Costa Rica requires that the offense be a crime in both nations and carry a penalty of more than one year in prison before Costa Rica must surrender a suspect.