SEC Busts Up ‘Virtual Reality’ Scam

MIAMI (CN) - A so-called "virtual reality" company, 3001 AD, and the men who run it lied repeatedly to swipe more than $20 million from 500 investors, the SEC says in Federal Court. The six defendants claimed they had a helmet system for a virtual reality game, and relationships with Apple and Microsoft, but it was all lies, the SEC says.

The SEC sued 3001 AD principals Jimmy L. Barker, Robert J. Ladrach and Marc S. Rifkin, and its sales agents Ronald B. Bowsky, Jack W. Maddock and Michael J. Weidgans.

An SEC prosecutor in Miami said the company was "creating its own virtual reality for investors," and said the men paid themselves "boiler-room commissions of up to 40 percent of every dollar" they got.

Jimmy L. Barker, 40, of Wellington, Fla., was CEO; four states entered cease-and-desist orders against him for his involvement in the scam, the SEC said.

Ladrach, 45, of Lake Worth, Fla., was president of the company for a while and had cease-and-desist orders against him issued by two states.

Rifkin, 52, of Boynton Beach, Fla., had a cease-and-desist order against him in one state.

Bowsky, 64, of Fort Lauderdale, was never registered with the SEC as a broker or dealer.

Madlock, 51, of Boynton Beach, Fla., was barred from associating with any NASD (now FINRA) dealer in 1994, fined $45,000 and ordered to pay $43,184 in restitution.

And Weidgans, 44, of Cape Coral, Fla., never registered with the SEC in any capacity.

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