Connect-a-Jet Promised a Revolution in Travel, Delivered a Scam
Investors in Connect-a-Jet's scam probably won't be flying one of these anytime soon.
Shine 2010, via Flickr
Connect-a-Jet was going to do for private aircraft what Expedia.com and its competitors did for commercial air travel. No longer would luxury-minded fliers be forced to dispatch their indentured servants to personally charter that flight to the Caymans — which, we're told, is how private jet reservations typically work. Instead, they could simply have said indentured servants log on to Connect-a-Jet to book the flights in real-time.
There was just one hitch: Connect-a-Jet was a top-to-bottom scam.
It didn't start out that way. According to federal prosecutors, Denton County resident Jason Wynn, a penny-stock promoter and used car salesman, set out to create an actual business. Soon, though, he teamed up with Round Rock attorney Martin T. Cantu — the "T." is for "Tricky," the nickname his grandmother gave him at birth — and all pretense of legitimacy faded. Connect-a-Jet instead became a means of gaming investors on the poorly regulated penny stock market.
The scheme was brazen, if not terribly sophisticated. First, in the spring of 2007, Wynn and Cantu issued 10 million shares of Connect-a-Jet stock to themselves for a penny a share. The stock began trading publicly in August, at which point Wynn and Cantu launched an aggressive sales blitz. Their bread-and-butter was spamming hundreds of thousands of fax machines with fliers containing hyperbolic and/or wholly concocted claims about the company (i.e. that it was real) and its financial prospects, though they also printed thousands of full-color fliers ("Got Money?" one read. "The sky's the limit with this stock!"). Wynn and Cantu then trumpeted their spurious claims about Connect-a-Jet in ad buys on CNBC and in <em>USA Today</em>.
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The aggressive promotional campaign, combined with a shell game of stock transfers between themselves and entities they controlled, was remarkably effective. Connect-a-Jet stock shot up from a penny to as much as $3 per share. By January 2008 Wynn had offloaded millions of shares at a profit of $2.6 million. Cantu made $548,881.
Wynn pleaded guilty in April to a conspiracy to commit securities fraud. Cantu was convicted this week of the same charge and an additional count of just plain securities fraud following a six-day trial. Both men face a maximum five years in prison and $250,000 on the conspiracy charge. Cantu faces an additional 20 years and $250,000 fine for the securities fraud. He is scheduled to be sentenced in September.
Send your story tips to the author, Eric Nicholson.
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