Virginia politics, policy and entertainment from the Greater Richmond-Washington Metro Area perspective.

It’s Beginning To Look A Lot Like Christmas For Krystal Ball

(Editor’s Note: I have removed the photographs that were originally published here and replaced them with the numerous investigative reports that we have written regarding Ms. Ball’s personal and campaign finances.  If you are looking for said photos, they are now available on Gawker.com — Riley)

SPECIAL INVESTIGATIVE REPORT: Krystal Ball’s (Fire)Fishy Finances Exposed

As of June 30, 1st Cong. Dist. candidate Krystal Ball had loaned her campaign over $227,000 with $150,000 coming on that date alone.  We previously raised the question of where she got the money to do this and began looking at her financial disclosure report filed with the Clerk of the House of Representatives on Sept. 17, 2009.  (Ball was to have filed a new disclosure report this past May, but has requested an extension until the middle of August.)  This form led us down several more paths that painted a very tangled picture of her finances, her business dealings and those of her husband, Jonathan Dariyanani.

First off, let us say that we found nothing irregular among the following holdings in her stock portfolio:

  • Bank of America – valued between $1,001 to $15,000
  • Newell Rubbermaid – valued between $1,001 to $15,000
  • Sprint – valued between $1,001 to $15,000
  • Starbucks – valued between $1,001 to $15,000

That clears the deck for the complex and tangled financial portrait of over-the-counter penny stocks that we are about to take you into that has all the makings of a Hollywood drama (if they hadn’t already made a film called “Boiler Room.”)

First, the players (and their bios culled from their various business websites):

Krystal Ball – Congressional candidate

  • Chief Financial Officer (CFO) of Zoma Ventures, LLC
  • CFO of EdIndia Solutions
  • CFO of Genesis Venture Fund India I, LP
  • Shareholder of Firefish, Inc.
  • Shareholder of Papa Bello Pizza
  • Shareholder of Crowdgather, Inc.

Ms. Ball’s experience implementing accounting software systems for the US Federal Court system, as a consultant for CGI (NYSE:GIB) a multibillion dollar IT and business process services company, gives her a deep understanding of the client side issues involved in the adoption and integration of software based accounting systems. Her work included creating and implementing training programs as well as designing enhancements to existing software.

Jonathan Dariyanani – Krystal Ball’s husband

  • Managing Member / President of Zoma Law Group, LLC
  • Managing Member / President of Zoma Ventures, LLC
  • Founder / CEO of EdIndia Solutions
  • Corporate Counsel / Co-Manager of Genesis Venture Fund India I, LP
  • Secretary / Director of Firefish, Inc.
  • Corporate Director of Crowdgather, Inc.
  • Legal Counsel to Vanguard Management Corp.
  • Corporate Counsel to Aero Financial
  • Secretary / Owner of Instant Wirefree, Inc.
  • Secretary of RRI India, Inc.
  • Secretary of Promed Education, Inc.
  • Secretary of Bancroft Uranium, Inc.
  • Registrant of Wine Purveyors International, Inc.

Attorney Dariyanani began his legal career at Wilson Sonsini Goodrich and Rosati, which represents Google, Pixar, Apple, and HP. His corporate law practice focuses on advising high growth technology companies. This passion has led him to found eight separate start-ups, including the language learning company Firebook, which sold to LeapFrog Enterprises. His non-profit, Shakti Learning, providing education to girls in remote Indian villages, has given him tremendous experience and insight into the Indian market, particularly in the education sector. Through involvement with the World Economic Forum he has been actively participating in the global conversation on transforming education in the developing world.

What it doesn’t say here is that Firebook was “acquired at an early stage” (read into that what you will) by LeapFrog and within 5 months the trademark was abandoned by LeapFrog.

The USPTO has given the FIREBOOK trademark serial number of 78240342. The current federal status of this trademark filing is ABANDONED – NO STATEMENT OF USE FILED.

(I guess Firebook just couldn’t compete with Muzzy.)

James Price – Jonathan Dariyanani’s business associate

  • Founder / CEO / President / Principal Financial Officer / Principal Accounting Officer / Fund manager of Genesis Venture Fund India I, LP
  • President / CEO / Chairman of the Board of Papa Bello Pizza
  • Director / Shareholder of Firefish, Inc.
  • Chairman and CEO of Vanguard Management Corp.
  • Chairman of the Board / CEO / President of Aero Financial
  • Owner of Instant Wirefree, Inc.
  • CEO / CFO / Principal Accounting Officer / Director of Wine Purveyors International, Inc.

James (Jim) Martin Price founded Aero Financial Inc. in 1992 and serves as its Chairman, Chief Executive Officer and President of Aero Financial Inc. Mr. Price has been Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Director of Wine Purveyors International Inc. since January 2003. In 2005, Mr. Price founded Genesis Venture Fund Managers and serves as its Chief Executive Officer, President, Principal Financial Officer, Principal Accounting Officer and Director. In 2003, Mr. Price founded Benacquista Galleries, Inc. Mr. Price serves as President and Chief Executive Officer of Benacquista Fine Art and Benacquista Publishing. Mr. Price served as Chief Executive Officer, President, Principal Financial Officer, Principal Accounting Officer and Chairman of the Board at Benacquista Galleries, Inc. Mr. Price has 20 years of experience in numerous facets of the financial services industry, wherein he has developed an expertise in finding small, under funded companies and building them up through investment banking and financial public relations. From December 1997 to February 2002, Mr. Price was the Chief Executive Officer of Columbia Financial Group, Inc., where he was responsible for developing an employee benefit plan and training program for Columbia’s employees and also developed and maintained corporate policies and procedures. From February of 1995 to December of 1997, he was a stockbroker employed by Global Financial in Bel Air. Over a 10 year span as a broker and office Principal, Mr. Price worked at JW Gant, Cohig and Associates, AG Edwards and Sons, and Global Financial. While in the brokerage industry, he developed an affinity for finding small, under funded companies and building them through investment banking and financial public relations. Mr. Price is a veteran of the U.S Army, serving from September of 1982 until September of 1985. Upon his honorable discharge he moved to Maryland and began his career as a successful stock broker. From September 1980 until June 1982, Mr. Price attended Eastern Washington University in Cheney, Washington, where he took general studies courses with an interest in Art History.

Aero Financial is described as follows:

Aero Financial, Inc., a corporation owned and controlled by James Price, which is not a broker dealer or an affiliate of a broker-dealer. Mr. Price has sole voting and dispositive control over shares held by Aero Financial, Inc.

Harshawardan (a.k.a. Harsh) Shetty – Another of Jonathan Dariyanani’s business associates

  • Founder / CEO / President / Treasurer / Director of Firefish, Inc.
  • Owner of Instant Wirefree, Inc.

Now it gets interesting.  Let’s start with Ms. Ball and her husband.

Zoma Law Group, LLC / Zoma Ventures, LLC

The hub of their business dealings appear to be based out of his Zoma Law Group, LLC and Zoma Ventures, LLC.  On her financial disclosure report, Ball stated that in 2008 she received $70,000 in income from Zoma Ventures and another $25,000 in 2009 through Aug. 31 of that year.  Various documents list the following addresses for Zoma Law:

4720 Center Blvd. Suite 317
New York, NY 11109

1703 Franklin Street
Fredericksburg, VA 22401

1329 Clay Street, Suite 300
San Francisco, CA 94109

101 Hiller Street
Belmont, CA 94002

An East Liverpool, Ohio address was also listed for the following political contribution:

Jonathan Dariyanani (Zoma Ventures LLC/Venture Capitalis), (Zip code: 43920) $2300 to HILLARY CLINTON FOR PRESIDENT on 02/23/08

If you go to the website for this firm, it only lists the New York City address for it.  The office is located in the borough of Queens in a high rise apartment building.  That building lists the following “Real estate at this address:”

$3,375/mo, 2 bed, 2 bath

$2,130/mo, 0 bed

$3,395/mo, 2 bed, 2 bath

$4,500/mo, 2 bed, 1 bath

Then there is the question of who or what is “Zoma”?

Well, under the New York (where the firm lists its practice) Lawyer’s Code of Professional Responsibility it states:

EC 2-11

The name under which a lawyer practices may be a factor in the selection process. The use of a trade name or an assumed name could mislead non-lawyers concerning the identity, responsibility, and status of those practicing thereunder. For many years some law firms have used a firm name retaining one or more names of deceased or retired partners and such practice is not improper if the firm is a bona fide successor of a firm in which the deceased or retired person was a member, if the use of the name is authorized by law or by contract, and if the public is not misled thereby. However, the name of a partner who withdraws from a firm but continues to practice law should be omitted from the firm name in order to avoid misleading the public.

The firm’s website lists no attorneys other than Mr. Dariyanani who as far as I can tell is only admitted to practice law in the state of California (although the firm’s web site doesn’t even say that.)  So, who or what is “Zoma” and how can it be described as a “Law Group” if there is only one attorney in it?

Well, what about Zoma Ventures, LLC?  After all, Ms. Ball is CFO of that company, so surely there must be greater transparency there, right?

Wrong.

The brief bios for Ms. Ball and Mr. Dariyanani are accompanied by one for the company’s Chief Operating Office (COO) John Campbell:

John Campbell, COO

lorem ipsum lorem ipsum lorem ipsum orem ipsum lorem ipsum lorem ipsumorem ipsum lorem ipsum lorem ipsumorem ipsum lorem ipsum lorem ipsumorem ipsum lorem ipsum lorem ipsumorem ipsum lorem ipsum lorem ipsum

I’m glad they cleared that up. That John Campbell is one impressive guy!

EdIndia Solutions

The address in Queens for Zoma Law Group is also used by EdIndia Solutions, another of the companies for which Ms. Ball is listed as CFO.  Just take a look at the website for this company and you’ll find it to be very telling.

Ms. Ball and Mr. Dariyanani are listed (including the same brief bios found for each of them on the various other websites they have affiliations with) as “Current Management” along with a “Joanna Schneier, Director of Content and Media,” but it is the “Additional Management” who are of greatest interest.

Additional Managment

EdIndia intends to augment its existing management team by adding additional highly qualified professionals who can help the company achieve excellence and scale in the Indian educational market.

Chief Technology Officer
An experienced Indian executive who has managed the software, hardware, technical support, automation, web presence, inventory control and CRM software for a consumer electronics enterprise and who has extensive software production experience, including the development of custom tools in a C++ or similar environment.

Chief Operating Officer
A seasoned manager with extensive experience in the importation, inventory management, assembly, packaging, field delivery and warranty support for a consumer electronics importer/ assembler in India. This person should also function in a quality assurance role in cooperation with the Chief Technology Officer.

Vice-President of Marketing
This exceptional individual was a high-level manager at one of India’s largest fast-moving consumer goods (FMCG) companies. They have extensive experience with advertising campaigns, direct marketing campaigns, all forms of media, web marketing and demographic analysis and have been involved in the launch of several new lines/brands under conditions resembling the pressure and velocity of a start-up enterprise.

That’s right.  Very detailed descriptions of individuals who apparently don’t even have names!  (Re-read these descriptions and you will see that the first two are thinly-veiled job opening listings with a few “should”s thrown in here and there, but the VP of Marketing references very specific things that the individual supposedly had done.)  It looks as if the Zoma Ventures COO John Campbell would make a good match here — one has a name in search of a bio and the other has a bio in search of a name.

Genesis Venture Fund India I, LP

This brings us to Genesis Venture Fund India I, LP, the third and final (as far as we have been able to uncover so far) company for which Ms. Ball acts as CFO.  Recall that her husband also serves as the fund’s Corporate Counsel and Co-Manager.  This company also marks the first time that she is directly connected at such a high level with James Price, who is listed as the Fund Manager.  His name will pop up again later in two of Ms. Ball’s stock holdings, Firefish and Papa Bello Pizza.

So, what are the portfolio companies in this fund?

Meet the portfolio companies of Genesis Venture Fund. Throughout 2008, we built upon our momentum in India, locating two emerging growth and one startup companies we believe have above-average return opportunities and clear exit possibilities.

Firefish
Continuing Education Solutions

EnglishBook
Mobile Education Service Provider

Springfield
Private School Provider

E-Convergence
Satellite Distance Service Provider

In fact, this fund is the second largest owner of stock in Firefish, a company that Ms. Ball lists investments in ranging between $100,001 and $250,000.  Mr. Price is also a shareholder and director of Firefish.  Here is where, pardon the pun, things get fishy.

Genesis Venture Fund announced in a press release that it has entered into a strategic business development agreement with Vanguard Management Corp.

Under the deal, Vanguard agrees to provide the above consulting services for a term of 24 months.  Genesis will be issued 125,000 common shares of Vanguard as part of the transaction in exchange for 15% of the limited partnership interests in Genesis that will be issued to Vanguard.  Genesis will also pay Vanguard up to $250,000 in cash milestone payments based on the performance of consulting services by Vanguard for Genesis under the Agreement.

What is interesting is that Mr. Price is both the fund manager of Genesis Venture Fund India I, LP and the Chairman and CEO of Vanguard Management Corp. so essentially he entered into this agreement with himself.  That won’t be the only time that we see that here among Ms. Ball’s business dealings and investments.

Krystal Ball’s Penny Stock Investments

Firefish, Inc.

Ball lists on her financial disclosure form that she owns stock in Firefish valued between $100,001 and $250,000.  That is pretty hard to believe given the prospectus that Firefish put out for their initial offering.

We will sell the Shares at $1.00. This price was determined by us arbitrarily.

There is no public market for our Common Stock. We cannot give any assurance that the Shares will have a market value, or that they can be resold at the offered price if and when an active secondary market might develop, or that a public market for our Shares may be sustained even if developed. The absence of a public market for our stock will make it difficult to sell your Shares.

We intend to apply to the FINRA over-the-counter bulletin board, through a market maker that is a licensed broker dealer, to allow the trading of the Shares upon our becoming a reporting entity under the Securities Exchange Act of 1934. If the Shares becomes so traded and a market for the stock develops, the actual price of stock will be determined by prevailing market prices at the time of sale or by private transactions negotiated.

At this point, it appears that this stock has yet to be publicly traded.

Firefish has a history of filing incomplete information with the Securities and Exchange Commission andrecently notified the SEC that they would be filing late.

Most interesting, though, is that the SEC has been looking into Firefish and its tangled relationship with Genesis Venture Fund India I, LP (of which Ball is CFO), James Price and Ball’s husband, Jonathan Dariyanani.

Genesis Venture Fund India I, LP is the second largest investor in Firefish.  Ball’s husband also serves as the secretary and a director of Firefish on filings while Price is listed as both a director and a shareholder.  Harshawardan (A.K.A. Harsh) Shetty, the company’s Founder, CEO, President, Treasurer, Director is the company’s largest shareholder.

Papa Bello Pizza

Ball lists on her financial disclosure form that she owns stock in Papa Bello Pizza valued between $50,001 and $100,000.  This stock is currently trading at 32 cents per share.

According to its profile on the Bloomberg Businessweek website, “As of September 4, 2009, Papa Bello Enterprises, Inc. operates as a subsidiary of Aero Financial, Inc.”  As you may recall, Aero Financial counts James Price as its Chairman of the Board and Jonathan Dariyanani as its Corporate Counsel.  Also of note is apress release Vanguard Management Corp was retained as strategic consultant by Papa Bello Enterprises.  Why is that of interest?

Jim Price, Chairman and CEO of Vanguard Management Corp states, “Papa Bello Enterprises has greatly evolved itself over the past two years.  The company has gone from a single concept company to a multi concept, multi location company with much greater potential for expansion.  We will work tirelessly to help Papa Bello expand its footprint in the United States and explore additional options internationally.”

(Dariyanani is also Vanguard’s legal counsel.)

Oh, by the way, the President & CEO / Chairman of the Board of Papa Bello?  James Price.  So, basically, Price acquired his own company as a subsidiary of another of his own companies and then retained yet another of his own companies to serve as its strategic consultant.  And these all merited press releases.  Can you see where this is going?

The company has apparently reported no earnings.  Maybe that’s because it seems that no one, including their own website, can locate where they have restaurants.

Crowdgather, Inc.

Ball lists on her financial disclosure form that she owns stock in Crowdgather valued between $100,001 and $250,000.  The stock is currently trading at $1.05 per share.  And the financials for this company don’t look so hot, either.

Return on Assets: -201.89%

Return on Equity: -371.19%

Return on Investment: -371.19%

Crowdgather is the center of speculation that it is engaging in “pumping” of its stock through press releases,spam emails and various other “paid advertising” third-party stock promoters.

Wine Purveyors International, Inc.

Ms. Ball does not list any stock in Wine Purveyors International, Inc. nor a position with this company.  However, her husband serves as its corporate registrant and counsel and James Price is listed as its CEO / CFO / Principal Accounting Officer / Director.  While each of them are also connected to several other companies (the uranium company that Dariyanani is affiliated with in particular raised red warning flags for Virtucon’s resident former stock broker Jay Hughes), it is Wine Purveyors International that gives us a glimpse into some other individuals whom Dariyanani and Price have associated themselves with.

On the original SB-2 filing with the SEC for Wine Purveyors, the names Dan Starczewski, Joe Overcash, and Frank Morelli appear.  Why is that important?

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21416 / February 18, 2010

SEC Charges Greenstone Holdings, Inc., the Company’s Chief Executive Officer, Two Attorneys, and Four Stock Promoters with Pump and Dump

On February 18, 2010, the Securities and Exchange Commission filed a civil action in the United States District Court for the Southern District of New York charging issuer Greenstone Holdings, Inc., the company’s Chief Executive Officer, Hisao Sal Miwa, the company’s outside counsel, John B. Frohling, attorney Thomas F. Pierson, and four stock promoters, Daniel D. Starczewski, Joe V. Overcash, Jr., Frank J. Morelli, III, and James S. Painter, III with engaging in an illegal, and in some cases fraudulent, scheme to sell hundreds of millions of Greenstone shares to the public. At the same time, Greenstone and Miwa fraudulently “pumped” the market for Greenstone stock by issuing a series of false and misleading press releases and hiring third-party stock promoters to circulate many of these statements on the internet and via email. On June 18, 2008, as part of its Anti-Spam Initiative, the SEC suspended trading in Greenstone’s securities.

. . .

In addition, according to the SEC’s complaint, Greenstone and Miwa intentionally prepared and disseminated to the public a long series of materially false and misleading press releases announcing fictitious Greenstone business transactions and otherwise creating the false appearance of a thriving company. Acting with Miwa’s knowledge and consent, Starczewski, Overcash, and Painter also hired a multitude of stock promoters to tout Greenstone (and its stock price) through widely-distributed internet campaigns. Often these materials repeated the false and misleading claims set out in the company’s press releases, while failing to disclose that Greenstone had paid for the campaigns with its illegal stock issuances.

Interesting to say the least.

Here is some background on what is called a “boiler room” and how “pump and dump” works:

A boiler room usually has an undisclosed relationship with the company being promoted or undisclosed profit from the sale of the house stock they are promoting. When a small company is looking for financing, it looks to an investment bank to raise capital. Usually this is a legal procedure but most boiler rooms perform this function for companies that don’t exist. After the managers of the boiler room invest money through the phony company or shell, they can either (A): Underwrite aninitial public offering (IPO) or (B): back the phony company into a “shell” company that has gone out of business and no longer trades, usually on the OTC Bulletin Board or the Pink Sheets that carry many small and thinly traded stocks.

The managers of the boiler room usually have close ties to the same owners of the company whose stock is being promoted. After the salesforce of the boiler room sells their clients on the idea of the IPO, they are not allowed to sell the shares that the customer invested. This is because there is no real “market” for the shares, so any shares sold before buyers are attracted would create a large loss in the price of the stock, due to it being thinly traded with no public support. Once the insider investors are in place, a boiler room promotes (via telephone calls to brokerage clients or spam email) these thinly traded stocks where there is no actual market. The brokers of the boiler room actually “create” a market by attracting buyers, whose demand for the stock drives up the price; This gives the owners of the company enough volume to sell their shares at a profit, a form of pump and dump operation where the original investors profit at the expense of the investors taken in by the boiler room operation.

So, among the many questions that this all raises are:

  • What is the true value of Krystal Ball’s penny stock portfolio and did she accurately report it to the Clerk of the House on her financial disclosure form?
  • Are Firefish, Papa Bello and/or Crowdgather involved in any “pump and dump” activity or are they legitimate small start-up companies who only unfortunately resemble Greenstone?
  • If the former, to what extent, if any, is Ball involved in such possible activity (she is the CFO of the second largest investor in Firefish) or is she the victim of a possible stock scam?
  • Given Ball’s total investments in Bank of America, Newell Rubbermaid, Sprint and Starbucks range between $4K and $60K, yet she has loaned her campaign over $227,000, is she funding her campaign by selling some of her Firefish, Papa Bello and/or Crowdgather stock?  (Whenever she gets around to filing her next financial disclosure form, we should have a better idea as to this.)
  • If Ball’s penny stock investments are being driven by pumps, is she then participating in well-timed dumps to raise money to fund her congressional campaign?

If Ms. Ball would like to answer any of these questions or if  Mr. Dariyanani, Mr. Price or Mr. Shetty would like to correct any of the public records from which we have drawn this information regarding Ms. Ball’s investments, we would gladly allow them the opportunity to do so here.

Click here for a chart detailing these various financial relationships.

Krystal Ball: One Year Later

Cross-posted to The Real Krystal Ball.

August 2009:

“If I can show that a 27 year old woman from a family with a sub $100,000 net worth, who is not a millionaire, not a scion of a political family, not a self-funder, can run for Federal office and win, I think we will see a tidal wave of people who use this model and example to run for Congress themselves…using the power of the Internet and the power of their ideas. No incumbent without ideas will be able to hide behind their office and PAC funding anymore.  And that could change our country forever. “

– Krystal Ball

August 2010:

Ball “exercised stock options in K-12 Inc., a company for which she’d done software design work.

. . .

Ball’s most recent financial disclosure, which the campaign provided to the [Virginia] Gazette although it will not be made public for another 30 days, shows those options as currently worth between $1 million and $5 million.

So, her family no longer has “a sub $100,000 net worth,” she is now a millionaire, and she has loaned her campaign over $227,000 so far.  Seems like the statement from last year is no longer operative.  Furthermore, she no longer is promoting her background as a CPA as she did early on, but instead now labels herself as an “educational software designer.”

But hey, what do you expect from an opportunist like Ball who today is courting the Tea Party groups in the district, but has during this campaign endorsed the even more liberal “public option” for health care than what President Obama signed into law.

I’ve been a vocal supporter of the public option from the beginning. And I would have absolutely voted for the health care bill that passed the House. I think that the public option is a critical part of reform because it is one of the most serious efforts that we have in the House bill to actually cut costs and increase competition.

– Krystal Ball Feb. 20, 2010 in Stafford, VA

Ball is also a proponent of cap and trade climate change legislation and opposes construction of new nuclear power plants.

Despite her pleas that cap and trade and the public option are things that “a responsible Republican should support,” somehow I have a hard time seeing any tea party members agreeing with her on these extreme left-wing positions.

This campaign is proving to be pretty entertaining from a Republican perspective.  From her Obama campaign-inspired logo and support for radical left-wing environmental and health care policies that she vocally embraced early on in her campaign, it is clear that she thought she could ride an Obama wave.  Instead, she is now scrambling to get supporters from the right who may not think that Congressman Rob Wittman is conservative enough.

Let’s not forget some of the other revelations about her personal finances that the Virginia Gazette turned up or elaborated on from our initial story on the matter:

Some of those companies, like  Firefish Inc., Crowdgather Inc. and Papa Bello Pizza Inc., seem to exist more on paper and in cyberspace than in reality.

For example, Firefish’s website admits that it’s $1 share price is purely arbitrary and it’s unclear if it has ever been publicly traded. Ball lists a holding in Firefish worth $100,000-$250,000.

Papa Bello’s is a pizza restaurant company without any restaurants, and the phone number on its website connects to a private residence. Ball lists holdings in that company worth $50,000-$100,000.

Apparently, Ball’s campaign acknowledged for this article that Papa Bello’s has no restaurants, but has explained that the value of stock for such companies is “performance based.”  (Pretty hard to perform if you don’t have any restaurants.)  What happened to the dozen or so locations that were listed on an older version of that website?  What about the statements made in press releases for the company that Papa Bello’s had a presence in some Wal-Mart stores?  What about the claims made on those same press releases that Papa Bello’s is one of the fastest growing pizza chains in the U.S.?  Maybe they’re counting on that future Sri Lanka location they mentioned in another press release…

So, has Ball sold any of her penny stocks at an inflated premium to help fund her campaign (such as the $150K she recently loaned it)?  According to Ball’s husband:

“She has not sold any of her penny stocks. In fact, she has invested more in those companies.”

Then she is an even bigger fool than any of us previously thought.

Krystal Ball’s Latest Financial Disclosure Form Raises More Questions Than It Answers

Cross-posted to The Real Krystal Ball

Well, here it is.  Krystal Ball’s latest personal financial disclosure form.  Compare it to her previous one.  Let’s see how many more questions this raises, shall we?

While last year she was still pulling down six-figures in “software design consulting fees” from K12, Inc. according to her previous form (right there that shows her comment about being a sub $100K net worth family to be a lie), she doesn’t list any on this year’s form.  That’s really too bad since these forms also ask for any such income from the previous year as well.  On her 2009 form, she indicated $132,500 in payments from K12, Inc. through Aug. 31, 2009.  Her 2010 form doesn’t list that under the “Preceding Year” column, so we have no idea if she received anything additional from K12, Inc. between Sept. 1 and Dec. 31, 2009, and, if so, how much she received.  This is such a glaring omission it is no wonder she is no longer promoting herself to voters as a CPA.

Ball also indicated on her 2009 disclosure form that through Aug. 31 she had received $25,000 from her husband’s Zoma Ventures, LLC for which she serves as its CFO.  In 2008, she indicated she received a total of $70,000 from Zoma.  However, on her 2010 disclosure form, she states that her total income from Zoma in 2009 was $204,000 in “consulting fees.”  That means in the final 4 months of 2009, Ball was paid $179,000.  That’s $44,750 per month. So far this year, Ball indicates she has been paid $135,332 in “consulting fees” by Zoma.  That’s very impressive given what we’ve learned about the various companies that Zoma and Ball’s husband, Jonathan Dariyanani who heads up Zoma, are involved with since according to the Virginia Gazette:

Some of those companies, like  Firefish Inc., Crowdgather Inc. and Papa Bello Pizza Inc., seem to exist more on paper and in cyberspace than in reality.

For example, Firefish’s website admits that it’s $1 share price is purely arbitrary and it’s unclear if it has ever been publicly traded. Ball lists a holding in Firefish worth $100,000-$250,000.

Papa Bello’s is a pizza restaurant company without any restaurants, and the phone number on its website connects to a private residence. Ball lists holdings in that company worth $50,000-$100,000.

Where exactly is Zoma getting this money to pay her? And exactly what sort of “consulting” is she doing to earn such a high salary while also running an active campaign for the U.S. Congress?  This financial disclosure report only raises additional questions, particularly since it appears that this money is the money that she is now loaning to her campaign.

As the Virginia Gazette article stated, Ball has apparently liquidated her Bank of America, Newell Rubbermaid, Sprint and Starbucks stocks (total value between $4,000 and $60,000.)  Her Bank of America bank account has also dropped from the $50,001 to $100,000 range to the $15,001 to $50,000 range.  So, even if she got the maximum of $60,000 for her stock in those companies and withdrew a maximum of $85,000 from her bank account taking it down from $100,000 (if she even had that much to begin with) to $15,001, she still would not have had enough to loan herself $150,000 in one shot as she did on June 30, 2010.

Ball continues to list stock in Firefish valued between $100,001 and $250,000 and Crowdgather stock valued between $100,001 and $250,000 as she did on her previous form.  She now lists between $100,001 and $250,000 in Papa Bello stock, up from $50,001 to $100,000 on her last report.

Missing now from Ball’s portfolio are RRI India, Inc. stock listed on her previous form valued between $50,001 to $100,000 and the Genesis Venture Fund stock that also appeared on her 2009 disclosure form valued between $100,001 and $250,000 (recall that Ball was listed as the CFO of this fund.)  She is apparently no longer a consultant for Ed India, Inc., either.

Two new stocks pop up in Ball’s portfolio.  She now claims between $1M and $5M in K12, Inc. stock.  This is reportedly the result of exercising stock options she received as part of her compensation package for “software design consulting fees.”  Still, exercising stock options costs money and there are tax implications to exercising these options.  Where did all that money come from?  It doesn’t appear that she would have had the available liquid funds to exercise such options.  There is no indication on her last disclosure form that she already owned any K12, Inc. stock that she could have exchanged with the company to acquire the option.  Perhaps she borrowed the money from a stockbroker to exercise the options and then sold enough to cover the cost, tax and brokerage fees.  Becoming an overnight millionaire makes one wonder, though.

The other stock new to Ball’s portfolio is valued between $1,001 and $15,000 and is some sort of education stock.  The first word in the company name is obscured on the form, but it ends with “Knowledge Now, Inc.” and is apparently located in Tulsa, OK.  A Google search turned up nothing on any such company relating to education in Tulsa.

Ball’s liabilities remain largely the same with the exception that her outstanding student loans are now between $15,001 and $50,000, down from between $50,001 and $100,000.

The Ball campaign promised that this personal financial disclosure form would answer everyone’s questions.  In fact, all it does is raise more questions about the source of her funds both personal and political.

Krystal Ball’s Magical Mystery Millions

Someone please tell Krystal Ball’s campaign to stop digging the hole that they are in.  We’re getting ready to invoke the mercy rule it is getting so bad.  (Okay, we won’t do that, but this is definitely becoming cringe-worthy.)

So now they are on their FOURTH explanation of where and how Ball received the $1 million to $5 million in K12, Inc. stock that showed up on her latest financial disclosure form.

Let’s recap the first three explanations.

According to Ball’s husband, attorney Jonathan Dariyanani, that change came about because she exercised stock options in K-12 Inc., a company for which she’d done software design work.

[Ball campaign manager Danny Barefoot] said Ball received the stock in March 2010 as a settlement in a business dispute with the company.

The stock option in question wasn’t reported in 2009 because Ball didn’t own it until March 2010, campaign manager Danny Barefoot said.

Now, here’s the latest twist.

The campaign manager for Krystal Ball’s congressional campaign says her $1 million to $5 million in stock of an educational software company came from a settlement with a third party–not with the company itself.

So, Danny Barefoot alone has now provided three different explanations — it was a stock option, it was a settlement in a business dispute with K12, and it was a settlement with a third party.

So, if Ball didn’t get this $1 million to $5 million in K12, Inc. stock from the company where did it come from?

Barefoot said he could not name the third party because of a confidentiality clause in the settlement.

As the Church Lady used to say, “How conveeeeeenient…..”

“Hmmmm…  Could the source of this stock be…”

Krystal Ball, candidate for Congress, becomes an overnight millionaire, misleads us as to the source of those funds and now when caught red-handed conveniently can’t disclose who gave her millions of dollars.

What does K12 have to say about all this?

K12 had issued a release yesterday saying the company never gave stock or stock options to Ball, her husband or their companies.

. . .

K12 also said that while the company had a contract with Zoma Ventures, a company owned by Ball and her husband, it never paid Ball directly for any services. On her 2009 report, Ball had listed K12 as paying her for contracting work.

So, if K12 never paid her directly for any services, where did the $132,500 in 2009 and the $160,000 in 2008 that Ball claimed came from K12 for consulting work really come from?  Undoubtedly, they’ll backtrack and try to say that the money was paid by K12 to Zoma Ventures and then paid to her (but she already lists some income from Zoma on her report, so why break this out separately?)  The bottom-line is can we really believe a word that comes out of Ms. Ball’s mouth anymore?

We previously stated that while the K12 stock / instant millionaire story was interesting, but not the biggest story about her personal finances (that being the several penny stock corporations of questionable status that she and her husband are entangled with), the revelation that these millions of dollars that Ball has suddenly come into are from an unknown source raises the stakes considerably.  How do the voters know that Ms. Ball is not bought and paid for by whoever gave her this money?  (***cough*** George Soros? ***cough***) Why would a third-party give her K12 stock unless it was an attempt to conceal the true source of the funds?

The more “explanations” we get from Ms. Ball and her campaign, the less we seem to actually know.

23 Responses to “It’s Beginning To Look A Lot Like Christmas For Krystal Ball”

  1. Cant Resist

    Do you think Krystal has ….. blown the election? Maybe I should go to one of those house parties. Sexist, her husband is the one with the leash.

  2. J. Moses Browning

    All that’s missing is video of her alighting from her helicopter outside corporate headquarters, looking the camera in the eye, and saying, “Lorem ipsum dolor sit amet.”

  3. James

    The plot thickens. How many Dems out there are thinking that Scott Robinson looks a LOT better now.

    Can someone explain why she is still in this race?

  4. Ken Reynolds

    As soon as Ms. O’Donnell and Ms. Angle and Mr. Garbage-mouth of buffalo, and and whats-his-name in ky explain why they are still in the race.

  5. Dave

    I retired last year after 35 years as a Federal investigator of white collar crime.

    What you have in this article is the typical “work up” on business relationships that attest to money laundering and the principals behind it. Legitimate business does not need to obfuscate their activirties with such intertwining of corporate relationships. The purpose of the multi layering is to frustrate those who must pay for each corporate registry inquiry as well as to pretend administrative deductions and espenses in any IRS filings.
    This article should be the body of a compalint to FINCEN
    into unknown funds of suspected criminal origin.

  6. Jay

    For the love of God, forward this to the authorities. This woman and her posse are spitting on all sorts of sacred things. They need to be smacked down. HARD.

  7. Anonymous

    Is Whitman afraid to debate her? Let’s get on with this and agree to some debates!!

  8. James

    Hey genius, there is a debate on the 13th in Williamsburg between the two. Worst. candidate. ever.

  9. Eric

    Who in the h*ll would name their child “Krystal Ball”?

    Oh, well – had she been a witch, she could have looked into her “Krystal Ball” and predicted that she would have been in this situation.

  10. Ken Reynolds

    Shucks………………she dont look like no witch to me. I’d date her in a minute!!! And vote for her too………you folks need a little excitement down there……….

  11. The WyBlog

    The Great Liberal Double Standard of Krystal Ball…

    Joanne Bamberger, aka PunditMom, whines (with appropriate levels of High Dudgeon) that Ms. Ball is being treated unfairly by Republicans and the media. The thing is though, the only person still pushing this non-scandal is Krystal Ball herself. Why do …

  12. Mark Blumenthal

    I hope someone from the SEC reads this. Today’s date is 11-17-10. Nearly 2 years ago I was contacted by a man named William Powell with Aero Financial, who worked directly for James Price. The purpose of his call was to convince me to by stock in Papa Bello Pizza (PAPA). This was stock which at the time was selling for about $.50/share. Mr. Powell was exuberant about this company and claimed they had a master lease agreement in place with Wallmart whereby Papa Bello Pizza franchises would rapidly begin opening in these stores and now would be the time to buy the stock since is was on the verge of going through the roof. As a result I bought some shares. The stock increase a little, but not hardly through the roof. Then Mr. Powell suggested a stock called Go Healthy. Supposedly, this company made a cholesterol reducing supplement invented by the guy who invented Gatorade. I agreed to also purchase some of this company’s stock. Then Mr. Powell suggested a company called P.I.E.W. However, when my gains turned into losses, I became suspect and declined to buy this stock, even though Mr. Powell claimed how sorry he was about my losses and buying this stock was a sure thing, which would make up for my losses………Then, an interesting thing happened. In January of 2010 Mr. Price called me directly. The purposed of his call was to try to convince me to buy $50000 worth of Papa Bello Pizza at a substantial discount. The stock at the time was selling for about $.50/share and if I bought $50000 worth of this stock, I could own it for $.25/share. The only condition was, I had to keep the stock for 6 months. He then sent me a purchase agreement in PDF format, which I sent to several of my friends who considered such an investment. We declined Mr. Price’s offer, which was a good thing since 6 months later, the stock tanked and is now selling for $.11/share. Whether or not this was a fraudulent scam by Mr. Price is not up to me to decide, since I’m not an attorney. I do however feel the possibility of an attempted fraudulent act by both Mr. Powell and Mr. Price is greatly evident and well worth investigating.

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