October 24, 2014

Profile: Skip Clements

Sour Grapefruits

Ten years ago, Skip Clements saw himself as the king of citrus marketing. A scam dethroned him, and today he’s consumed with a quest for redemption and retribution.

Mike Vogel | 2/1/2008


Cans of frozen orange juice concentrate
carried an image of Clements.

In May 2000, Clements made his first shipment to China — five containers of orange juice and oranges. In August, the company’s president said baseball great Willie Mays had agreed to be a spokesman for a U.S. rollout of the juice. In September 2000, shares in the newly named Clements Golden Phoenix Enterprises began trading. The stock immediately went up $2.25 a share to $7 as locals looked to catch Clements’ star.

Clements and those locals, however, didn’t know that the shell Mintmire provided wasn’t legitimate. It was a “box job,” a company with figurehead investors and someone behind the scenes in secret control of the public float of the stock and therefore able to profit by manipulating how many shares are sold and when. It gets its name because all the shares and control literally can be carried around in a box.

Mintmire, federal investigators came to believe, was experienced with box jobs. According to testimony at a later trial, Mintmire assembled figurehead investors in somewhere between five and 21 companies through his son, Mark, who lived in Atlanta. It worked like this: Mark Mintmire gave cash to friends and acquaintances at The Highlander, an Atlanta bar. Each Mintmire pal got about $900. Each would then write a check for $800 — keeping $100 for his trouble — to buy shares in the company Mintmire was creating.

While the friends appeared to be actual shareholders, in the process of buying the shares they would sign documents surrendering their power over the stock to whoever was the bearer of the certificate. One man, Kevin Bell, wouldn’t learn he was principal, president and promoter of the shell company Clements merged with until years later — news he got from government investigators. From them, Bell also learned he approved the Clements merger. On paper, for a time, Bell had substantial gains on “his” stock — without ever knowing it.

To get the stock market to allow the company to be traded, Donald Mintmire provided assurances to National Association of Securities Dealers market regulators that the original investors were “sophisticated investors.” In reality, Bell was an electrician who, contrary to just one of the representations that Mintmire made to regulators, had a personal bankruptcy in his past.

In short, as then-federal prosecutor Mark Johnson later argued to a jury, Mintmire lied and created an artificially large number of shareholders to get a company stock listed. In the first week that Clements Golden Phoenix traded amid great excitement in Stuart, Mintmire surreptitiously cashed out of stock, netting more than $500,000, investigators later found. With his son, he netted a total of $250,000 on another company, they discovered.

Clements Citrus Bag
Clements talked of being the Colonel Sanders of citrus in China.

Judging from a later search warrant affidavit, Clements Golden Phoenix graduated from “box job” to pump and dump. The company put out press releases to goose the stock price, according to evidence investigators gathered. As the price rose, the only ones to benefit were some of the original “investors.”

Meanwhile, insiders like Clements and the people who spent $3 and $5 per share — a total of $2 million — to buy into a private placement before the company went public couldn’t sell because their shares were restricted.

Perhaps they wouldn’t have wanted to — the company’s prospects looked good, with Clements talking up $3 million in commitments from Chinese buyers and a new brainstorm, exporting cranberry juice. With his picture on the OJ can, he talked of being the Colonel Sanders of citrus in China. And Florida Trend (this writer, in fact) cited Clements as an authority on the market [“The Last Great Canker War?” February 2001].

Those who bothered to look at the actual financial statements the company filed with the SEC would have had reason to pause. True, they were full of pronouncements about plans to build a packinghouse. But the company was bleeding cash, mostly for marketing and trips to China.

The reality of its breakthrough? Clements Golden had only a permit to sell in China and two agreements with food brokers to represent them there for a piece of sales — there were no guarantees in the contract that anybody in China would buy anything. Indeed, in its brief run, Clements Golden chalked up only $337,302 in sales, according to its SEC filings — and Clements now says he doesn’t know how it could have brought in that much. He says the company was never paid for what it shipped to China.

Tags: Politics & Law, Treasure Coast, Agriculture, Government/Politics & Law

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