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Using its stock as currency, Lenco Mobile Inc. (Pink Sheets: LNCM.PK) has spent the past few years snapping up cell phone and Internet marketing companies.

Lenco's share price has risen with the acquisitions, hitting a new high of $6.05 on Friday. The company now has a market capitalization of $389 million, and is seeking a listing on the NASDAQ exchange.

But a Sharesleuth investigation has found that at least two of the businesses that Lenco acquired - for 8.5 million shares and other consideration - were connected to Michael Wayne Crow, the subject of two previous Securities and Exchange Commission cases.

In November 2008, a federal judge found that Crow secretly controlled a securities firm called Duncan Capital LLC, unlawfully collecting millions of dollars in commissions while violating broker-dealer registration and reporting provisions. Crow was ordered to disgorge those earnings, with interest, and pay a $250,000 fine.

He had previously settled another SEC case alleging that he engaged in insider trading as chief executive of a public company, and also filed false financial reports.

Although one of Lenco's SEC filings mentions a "Michael Crow,'' the company has not disclosed that he is the same Michael Crow who has been barred from serving as an officer or director of any public company, or from associating with any broker, dealer or investment advisor.

Crow filed for personal bankruptcy in California last month, listing $30,000 in assets and $11.5 million in debts, including $7.25 million owed to the SEC. In that filing, he said that one of the companies that Lenco purchased, for millions of dollars in stock, never had any business operations.

Sharesleuth found that a third business that Lenco acquired is connected to Thomas C. Ronk, a former stockbroker with a history of disciplinary actions by the National Association of Securities Dealers (now FINRA).

Ronk operates several investment web sites, including BuyIns.net, which purport to identify companies whose stocks have been targeted by illegal "naked shorting'' and are poised for price jumps.

He also is partners with former SEC Chairman Harvey L. Pitt in RegSho.com, a site created to help short sellers locate shares to borrow so that they can remain in compliance with market rules.

It's also possible that those gains boosted the profit payouts for the hedge fund's managers. Hedge fund operators typically charge a 2 percent annual management fee, and get 20 percent of any profits their funds generate.

Energy Exploration International Inc. has raised more than $12 million from foreign investors, through sales agents who say -- or imply-- that they're working from the oil and gas company's Dallas headquarters.

But when Sharesleuth paid a surprise visit to EEI, a manager struggled to explain why the offices were virtually empty. It was the middle of the morning, and the entire sales team was missing. So was the company's president, Curtis A. Best. The man responsible for EEI's well operations, Robert H. Hucklebridge, wasn't there either.

That was the very scene we expected, though. A Sharesleuth investigation found that the people selling partnership interests in EEI's drilling ventures were actually calling from telemarketing "boiler rooms'' overseas, and that many were operating under false names.

Among Sharesleuth's other findings:

• EEI was secretly controlled by Mark S. Hutcherson, a former Atlanta-based commodities broker whose firm was shut down by regulators in 2000, and Jack F. Prather, who'd been a principal of that same firm. Both men have since been implicated in other global boiler-room schemes.
• EEI's vice president of sales, known to investors as Richard Wright, is really a convicted felon named Richard Ayoub.
• EEI outsourced its investment marketing in 2006 to a Singapore company called Pace Global Business Services Pte Ltd., which also has ties to Hutcherson and Prather. That deal is not mentioned in any material given to investors.
• EEI investors say the company's representatives told them that its drilling projects were virtually assured of success, and provided them with financial projections and payback schedules that were wildly optimistic.

Through August, EEI and its partners had drilled eight wells using the money from foreign investors. At least six were busts, yielding little or no production, according to reports filed with the Texas Railroad Commission, which oversees oil and gas activity in the state. A group of British investors is now pushing for an accounting of the $2.5 million that EEI raised for one of the projects. They say the well, in Colorado County, Texas, was declared a dry hole and abandoned before all of the tests for oil or gas were performed.

They are demanding to know why EEI made the decision to seal the well, and why money that should have been set aside for completing the well wasn't refunded to them.

Sharesleuth's investigation also found that EEI sold partnerhip interests in three wells that were never drilled. Marketing packets sent to potential investors showed that each was a $1.75 million project. Instead of returning the money to investors, EEI switched them into other projects, without seeking their consent.

In two of those deals, investors were supposed to own 85 percent of the original well. Instead, they wound up with less than 40 percent of a different well that EEI drilled in partnership with other oil and gas companies.

People familiar with EEI told Sharesleuth that it was highly unlikely that the company used all of the money it raised for the undrilled wells to buy the minority stakes in the replacement wells.

EEI did not respond to questions submitted by Sharesleuth.

In December 2001, the Nasdaq stock exchange delisted the shares of Global Capital Partners Inc., citing its ties to people with serious criminal or regulatory histories.

Nasdaq investigators concluded that two convicted felons, Regis Possino and Sherman Mazur, had acquired a substantial, undisclosed interest in the company, which operated brokerages in the United States and Europe. Global Capital's chairman and chief executive, Martin A. Sumichrast, was a direct participant in the financing deal that led to their involvement.

According to Nasdaq's findings, Sumichrast created a separate entity that bought newly issued shares from Global Capital, using money that ultimately came from companies connected to Possino and Mazur. Global Capital (Pink Sheets: GCPL.PK) later bought millions of dollars of stock in obscure public companies tied to Possino or Mazur. Nasdaq said the brokerage also sold a stake in an online subsidiary to a company headed by one of their associates, another financial felon. In addition, investigators said, Global Capital participated in a dubious $27.5 million divestiture that led it to inflate assets and earnings and to file what it called "materially misleading" financial statements for at least three quarters.

No regulatory charges were filed in connection with the deals. Nor were investors ever told the full reason for the delisting. By appearances, Global Capital's shares were removed solely for failure to meet the exchange's minimum share price.

Global Capital gave up its brokerage license in 2002 and faded from view. Since then, Sumichrast has worked as a consultant for other publicly traded companies. He also led an investor group that packaged four U.S. shell companies for reverse mergers with China-based partners. The first of those shells became China Fire & Security Group Inc., which was the subject of a previous Sharesleuth investigation.

A second shell company, International Imaging Systems Inc., was transformed last fall into China Bio Energy Holding Group Co. (OTCBB: CBEH.OB). A third, Forme Capital Inc., combined in March with a Chinese supermarket chain and has changed its name to QKL Stores Inc. (OTCBB: QKLS.OB). The fourth shell, Southern Sauce Co. (SOSA.OB) announced last month that it had completed a reverse merger with a Chinese company that specializes in ceramic valves and other products.

In our report on China Fire, we noted that some of the investors in the shells had previously been connected to stock manipulation schemes. Since then, we have turned up information linking Sumichrast to a succession of white-collar criminals.

Our research also shows that Sumichrast and several of his partners in the shell and reverse-merger deals have a mutual history at other public companies. One of those is in liquidation, and another is facing delisting from the American Stock Exchange. We think that anyone considering investing in China Bio Energy, QKL Stores or the Chinese valve maker should know the backgrounds of the people who have helped create them.

Huiwen Liu is part owner of a natural food store in the Vancouver suburbs. The business has only a few employees and is sandwiched between a sex shop and a clinic for drug addicts.

According to Securities and Exchange Commission filings, Liu also is sole shareholder  of an offshore investment company that got 10.1 percent of China Fire & Security Group Inc. (Nasdaq: CFSG) when it went public through a reverse merger in 2006.

That offshore company, Worldtime Investment Advisors Ltd., notified the SEC on Dec. 4 that it planned to sell 600,000 of its 2.58 million China Fire shares, for estimated proceeds of $9.6 million.

The business address listed for Liu in Worldtime’s initial disclosure form corresponded to her food store. The unlikely scenario of a shop owner in Canada holding more than $30 million of stock in a little-known Chinese manufacturer, through an investment company in the British Virgin Islands, was just one of the reasons that Sharesleuth decided to take a closer look. The quintupling of China Fire & Security’s share price in the 12 months following the reverse merger also got our attention. So did the company’s murky ownership and the mounting casualties among other “hot” Chinese stocks that have gained listings on U.S. exchanges through reverse mergers.

Sharesleuth’s investigation turned up questions about transparency and disclosure at China Fire, which has headquarters in Beijing and makes fire detection and protection systems for steel mills, oil refineries and other industrial customers. For starters, we found that Huiwen Liu is the sister-in-law of China Fire’s chief executive officer, Bin “Brian’’ Lin – a fact not mentioned in any SEC filing.

Xethanol Corp. is trying to unload a former pharmaceutical plant in Georgia that had been the centerpiece of its plan to turn wood chips, paper pulp and other organic waste into ethanol.

The Augusta Chronicle reported last week that Xethanol (AMEX: XNL) told workers who have been tending the property that it was for sale. When Xethanol and a joint venture partner bought the idled plant in August 2006, they said it would be retrofitted to produce 50 million gallons of ethanol a year, and would employ as many as 100 people.

In the wake of the news, the Chronicle’s business editor wrote this column, which we thought our readers might be interested in seeing.

We believe the information that Sharesleuth uncovers about companies like Xethanol is important not only to investors, but to the communities those companies involve in their ventures. They, too, must assess the risks.

Xethanol reported in a Securities and Exchange Commission filing in November that it had sold its mothballed ethanol plant in Hopkinton, Iowa for $500,000. It once billed that plant as its “research and development testbed.’’

The company also disclosed that it had sold 47 acres of undeveloped land in Blairstown, Iowa, the home of its only operating ethanol plant. And Xethanol said that it was talking to a potential buyer for its property in Spring Hope, N.C. The company had said it would convert the former fiberboard plant there into a facility that would produce 35 million gallons of ethanol a year.

Orthopedic Development Corp.’s president said in an affidavit in a federal court case in North Carolina that he had never engaged in business in that state, had not gone there to recruit a sales executive or “otherwise traveled there.’’

But Sharesleuth.com, which posted an investigative report on ODC on June 8, has copies of e-mails that appear to disprove those assertions.

James Doulgeris, who heads ODC, submitted the affidavit last week in connection with a motion to dismiss the case in North Carolina or halt it pending the outcome of a related case in Florida. The suit in North Carolina was brought by Dan Grayson, who was hired in November as vice president of sales for ODC's spine stabilization product and was fired in May.

The e-mails exchanged last summer between Doulgeris and Grayson include messages from Doulgeris that provide details of his travels to North Carolina for business meetings. Those details include flight numbers and times, and the names and locations of the hotels in which he stayed.

The e-mails show that Doulgeris traveled from Tampa to Charlotte last July 6, with marketing materials and instrument samples for Grayson, who at the time ran his own medical device distributorship.

Grayson became a distributor for ODC’s spine-stabilization product, called TruFUSE, the following week.

Orthopedic Development Corp. says its new spinal implant procedure can reduce or eliminate pain for many of the millions who suffer from chronic back problems.

The approach is simple and potentially lucrative. ODC’s system uses small pieces of specially shaped cadaver bone to help stabilize the spine. The Clearwater, Fla.-based company says in its promotional material that its TruFUSE procedure gives patients a middle option between physical therapy and major fusion surgery.

It even says its minimally invasive procedure can be performed on an outpatient basis, saving money and time. But former insiders tell Sharesleuth that ODC has encountered design and performance problems with TruFUSE. They add that documents given to investors in a recent stock placement overstated the number of patients who have been treated using the procedure, and may have overstated the results.

“I believe the company misled investors to raise money to market a product whose function and benefits had not been validated through clinical studies,’’ said Dan Grayson, who was in charge of TruFUSE sales from early November until early May.

Because the TruFUSE procedure relies on human body parts instead of mechanical devices, the Food and Drug Administration does not require clinical trials or regulatory approval. That means the company is responsible for ensuring that the treatment works.

As with any medical device that requires surgery, understanding the risks and monitoring the results is critical to the health and safety of the patients.

Sharesleuth examined some of the documents given to patients and investors and found contradictions in the company’s story. We thought it was important to disseminate this information so that patients considering this operation would have more information available to them, as would people considering making an investment in the company.

(Disclosure: No one at Sharesleuth, including majority member Mark Cuban, has any financial interest or business relationship with ODC or anyone mentioned in this report.)

Two more companies that recently announced technology deals with UTEK Corp. have been identified as vehicles for securities fraud, this time in a federal criminal case in New Jersey.

The case involves a stock manipulation scheme that began in the 1990s and cost investors more than $15 million. Eight defendants have pleaded guilty and a ninth was found guilty by a jury.

A plea agreement signed by one of the defendants says that prosecutors would not initiate further charges regarding his admitted participation in securities and wire frauds involving the shares of some 30 additional companies.

The companies include Avalon Oil and Gas Inc., which last month completed its third technology transfer with UTEK, and ChampionLyte Holdings Inc., now called Cargo Connection Logistics Holdings Inc. It did a technology deal with UTEK in December.

The court filing did not allege any wrongdoing by Avalon (OTCBB: AOGN) or Cargo Connection (OTCBB: CRGO).

But Sharesleuth.com found the document in the course of its own investigation into Avalon, Cargo Connection and other companies with ties to a common network of executives, directors, consultants and promoters.

A closer look at that network revealed at least three people who did prison time in connection with previous fraud schemes and three others who either settled civil fraud charges with the Securities and Exchange Commission or were found guilty by a jury.

The network also included several more people who previously were suspended or barred by the National Association of Securities Dealers for violating brokerage industry rules.

Companies linked to the network have done numerous deals with Cornell Capital Partners LP, one of the top hedge funds providing PIPE (Private Investment in Public Equity) financing to penny stock companies.

The top company in UTEK Corp.’s securities portfolio has encountered a series of setbacks in its attempt to commercialize a powder-coating technology for kitchen cabinets, bathroom vanities and other wood products.

Trio Industries Group Inc. (Pink Sheets: TRIG) has been evicted from its offices in Dallas. Its phone and fax numbers have been disconnected and it no longer has control of the 650,000-square-foot building that it hoped to convert to a wood products plant.

UTEK (AMEX: UTK) is a Florida-based company that licenses technology from government and university labs and transfers it to other companies, usually in exchange for stock in the recipients.

UTEK has done five such deals with Trio and has received 7.79 million shares of Trio stock. UTEK valued that stake at $11.6 million on Sept. 30, making the shares the biggest single holding in a stock portfolio it valued at $55.7 million.

Sharesleuth.com published an investigative report on UTEK in October that raised questions about UTEK’s business model, the true worth of its securities portfolio, and some of the companies whose shares make up that portfolio.