Trump campaign chief lends name to penny stock tied to felon - InfoNews

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Trump campaign chief lends name to penny stock tied to felon

February 27, 2018 - 9:18 PM

WASHINGTON - The political strategist and online guru who was named President Donald Trump's 2020 campaign manager Tuesday has a close financial relationship with a penny-stock firm with a questionable history that includes longstanding ties to a convicted fraudster, according to an Associated Press investigation.

Brad Parscale, who played a key role in Trump's 2016 election victory, signed a $10 million deal in August to sell his digital marketing company to CloudCommerce Inc. As part of the deal, Parscale currently serves as a member of California-based company's management team.

The company touts itself as "a global provider of cloud-driven e-commerce and mobile commerce solutions." Records reviewed by the AP raise questions about its current finances and its rocky past.

CloudCommerce's operations have not turned a profit in nearly a decade. The company's most recent quarterly earnings showed it has spent more than $19 million in investor money since its creation nearly two decades ago and has only $107,000 in cash on hand.

In 2006, a top executive at the company, which was operating under a different name at the time, was caught in an FBI bribery sting and later pleaded guilty to securities fraud. Documents reviewed by the AP indicate he remained involved in CloudCommerce's major corporate decisions in recent years.

Parscale did not answer written questions from the AP about the sale of his company to CloudCommerce and his role in the company.

The owner of an obscure web development firm before the 2016 presidential race, Parscale parlayed commercial website work for Trump family businesses into a role as the public face of Trump's highly successful digital campaign.

A press release announcing Parscale's hiring as Trump's new campaign manager included Eric Trump calling him "an amazing talent" who has the Trump family's "complete trust."

When Parscale's CloudCommerce deal was originally announced last August, the price of the company's shares surged.

"I've got Fortune 500 companies calling," CloudCommerce chief executive Andrew Van Noy said in a recent interview before the AP raised questions about the company's history. Van Noy said the company hopes to do more work for the Trump Organization, though "any conversation with the family happens at the Brad level. I work with him daily."

CloudCommerce's financial filings with the Securities and Exchange Commission give varying descriptions of Van Noy's business career before he joined the company in the spring of 2011. They say he ran a "boutique real estate private equity firm" through the end of 2008 and oversaw more than $300 million of transactions during a roughly six-month stint at Morgan Stanley at the beginning of 2010.

But in a bankruptcy filing Van Noy made in Utah in August 2010, Van Noy said he was unemployed — and had earned less than $9,000 in each of the past three years.

After the AP asked Van Noy to reconcile the conflicting filings, he hung up and then emailed a request for written questions, which he did not answer.

Created in 1999, CloudCommerce has repeatedly changed its name and lines of business. One constant throughout has been Jonathan Lei, the former chief executive of several CloudCommerce predecessors. In 2006 he and a fellow executive pleaded guilty in a stock manipulation scheme. Lei had attempted to pay a $1 million bribe to FBI agents posing as hedge fund managers, but he avoided prison time by co-operating with prosecutors.

Emails obtained by the AP show Lei participated in major management decisions in 2015, and public records show that he transferred an 11.4 per cent stake in the company to a relative.

Neither Lei nor his relative returned calls seeking comment.

News from © The Associated Press, 2018
The Associated Press

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