American Technologies Group:
What Are They Up To?

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Last updated May 9, 2000. Analyst report: Stevens Monte. Hot: The Oregon Files.
Hot links: Silicon Investor ATEG board. Raging Bull ATEG board. Latest (#8) UK Shares ATEG board, and #7, #6, #5, #4, #3, #2, #1

A note about acronyms: American Technologies Group (OTC: ATEG) commonly goes by "ATG". But their stock symbol is "ATEG" because only companies listed on the NYSE or AMEX can have three-letter symbols. ATG is not even listed on NASDAQ; it is a bulletin board stock. And another, unrelated company already has the "ATG" symbol. So many folks refer to ATG as ATEG, and their domain name is ateg.com.

Contents:

• Cast of Characters
• The IE Crystals Scam
• The TradeNet/ATG Laundry Ball Scam
• The Coming Health Products Scam
• "The Force" or "The Farce"? - The Engine Sausage Scam
• The BASER Scam
• Loose Ends
• News and Public Discussion
• ATG's Reaction to Public Scrutiny
• Contributions, Credits, and Legal Disclaimer

Cast of Characters

• John Collins, former CEO and Chairman of the Board of ATG. Engineered the disastrous deal with the cult-controlled TradeNet Marketing, Inc. Left the board in December 1997, but remains in close contact with the company. In June 1998, ATG announced plans to sell their ATG Media division to Collins for $500,000.
• Lawrence J. Brady, current CEO of ATG. Does some consulting on the side. Also rumored to be on the board of INTR (now INTRE); not confirmed yet. Larry's son Mark was COO of Integral Health, Inc., a business partner of ATG, though he left around October, 1998.
• Dr. Shui-Yin Lo, Director of R&D. Discoverer of "IE crystals" and "nanotricity". (This link now points to a bio page and includes patent information.)
• Harold Rapp, Chief Operating Officer of ATG. Sent this threatening letter to Mark Dallara after Mark started asking embarassing questions of the advisory board about IE crystals and consumer fraud.
• The ATG advisory board. This list was formerly posted on the ATG web site, but was pulled after Mark Dallara started contacting board members. Now it's a secret advisory board.

The IE Crystals Scam

• A few words about the physics of ice. (The most recent text on ice physics I could find in the library was written in 1974. This entry should be revised to reflect more recent data pointed out by Mark Thorson.)
• Two papers Shui-Yin Lo published in Modern Physics Letters B, 10(19):909-919 and 921-930. Anomalous State of Ice introduces IE crystals and discusses their synthesis. Physical Properties of Water with IE Structures describes various measurements made on water supposedly containing these crystals.
• Professor Stephen Lower's excellent page, AquaQuackery: "Clustered" and structure-altered water nostrums and nonsense, shows that ATG is not the only outfit making bogus claims about "special" forms of water water.
• Affidavit of Andrew Blackwood, Vice President of Structure Probe, Inc., hired by the Oregon Attorney General's office to investigate IE crystals. Dr. Blackwood writes: "We find using the laboratory techniques of transmission electron microscopy and ultraviolet spectroscopy that we obtain similar results for water claimed to contain IE structures as for West Chester, Pennsylvania tap water."
• The Oregon Files, from the office of the Oregon Attorney General, include a set of memos with a detailed explanation of why ATG's claims contradict accepted scientific theory and their experiments are worthless due to lack of proper controls.
• Dr. Lo issued a reply to the Engelking affidavit contained in the Oregon Files.

• British physicist Dr. Ji-Chen Li received funding from ATG to conduct some tests on IE water. He presented the results, largely negative, at ATG's symposium in Los Angeles in 1997. Dr. Li now dismisses ATG's claims about IE crystals. In July 1998, ATG pressured Li into removing a link on his research group's UMIST Ice Physics home page that pointed to this web site. Read the whole story here, in The UMIST Affair.
• An analysis of Dr. Lo's claims by Steven Bittenson, who holds a Ph.D. in chemical physics. ``Lo's initial argument is interesting, but there are significant issues with his follow-through and support of his conclusions.''
• Second Law of Thermodynamics.
• It is possible that IE crystals are similar to polywater, i.e., a case of self-delusion on the part of the investigator combined with sloppy experimental techniques. Note that polywater was originally called "anomalous water". IE crystals are described as an "anomalous state of ice".
  • Polywater and the Role of Skepticism. Excerpt from a report on responsible conduct in science, published by the National Academy Press in 1995.
  • "Case Studies in Pathological Science: How the Loss of Objectivity Led to False Conclusions in Studies of Polywater, Infinite Dilution and Cold Fusion," by Denis L. Rousseau, American Scientist 80(January-February 1992):54-63.
    "Rousseau, whose investigations of polywater were a major factor in its demise, simplifies Irving Langmuir's criteria of "pathological science" into three conditions, which he illustrates with examples from the polywater controversy, Benveniste's pro-homeopathy dilution experiments, and the cold fusion controversy." (Edward Lipson, from a web page on Pseudoscience and Paranormal Phenomena).
• Why it's a scam. ATG and Dr. Lo's actions don't match what real scientists do when they make a significant discovery. But they very closely match the behavior of con artists working a good high-tech scam.
• Try our new recipe for IE crystals (humorous). Here's a peer review critique, and also a testimonial.

The TradeNet/ATG Laundry Ball Scam

• The Church of Scientology, which TIME Magazine called The Thriving Cult of Greed and Power and a "hugely profitable global racket", figured prominently in TradeNet's background. Three current and several former ATG employees are also members of this cult, though none remain in top management positions, and ATG was never under the influence of the cult the way TradeNet was.
• ATG's CEO John Collins denounces TradeNet's Laundry Solution as a scam, in a May, 1997 interview with the Statesman Journal. But is ATG's replacement, the SuperGlobe, any better? Not according to the Oregon attorney general's office.
• Press release from the Oregon Department of Justice, Financial Fraud Section, denouncing the TradeNet laundry ball products as frauds. Reports that ATG paid $20,000 into a settlement fund. TradeNet and TOP Marketing together paid $190,000 and agreed to never market products based on unproven scientific claims again in Oregon. This specifically includes similar laundry products and The Force, an automotive product from ATG also based on IE crystals..
• Text of the Assurance of Voluntary Compliance signed by ATG to settle the fraud charges in Oregon. And here's the Assurance of Voluntary Compliance signed by TradeNet.
• ATG's ties to TradeNet and Scientology:
  

  "This, is not a First Dynamic thing. This, is Third Dynamic.When I sat across the table from John Collins and he laid it on the line, he said, 'Bill, I'm pissed at you. You know why I'm pissed at you? Because that - the 100,000 people out there know you're Scientologists. You guys are fucking up." - Bill Cooper, TradeNet board meeting, 8/18/97

  Tradenet board meeting transcript discussing investigations by attorneys general in several states for consumer fraud. Search for references to "John Collins", who at the time was CEO of ATG.
  

  "Lynn, do not make statements that David or any other staff have been permitted to publicly speak in a disparaging manner. I expected more from you. I was not aware of the communications until after they occurred. I also believe David when he says he was applying the ethics gradient with other Church members. David has been instructed to cease such communications and has stated clearly that he is unwilling to continue to flow power to any of the three owners." - John Collins, Letter to Lynn Irons, 8/14/97

  Letter from John Collins, then CEO of ATG, to Lynn Irons of the Church of Scientology, about TradeNet. Mentions "out-ethics" situations, which is Scientology jargon. ``David'' is David Gann.
  
• Suppressive Person Declare of TradeNet founder Erwin Annau, excommunicating him from the cult of Scientology for causing a scandal.
• TradeNet marketing hype about Dr. Shui-Yin Lo and IE crystals.
• More hype, from a TradeNet distributor quoting Dr. Lo. See the original web site here.
• Tulsa's Better Business Bureau doesn't think much of the TradeNet laundry ball either. The Oklahoma prosecutor eventually issued an injunction against Tradenet, along with the FTC and ten other states.
• Visit the Showcase of Fraudulent Laundry Products. See laundry balls, disks, rings, CDs, and globes: 23 in all. Every one is based on some sort of pseudoscientific mumbo jumbo: "structured water", "liquid magnets", and our favorite, "IE crystals".
• Does ATG have its own laundry product? Check out these ATG laundry links at larecherche.fr and netwatchers.com.

The Coming Health Products Scam: This Could Be Big!

• Integral Health, Inc.
  • Integral Health Inc. was formed through a reverse merger between The Montreux Group, Inc., Montreux Investment Circle LLC, and a publicly-traded corporate shell known as Alpaca, Inc. (OTC BB:LONG). Alpaca's March 1997 annual report (SEC Form 10-K) states: "The Company has had no operational history and has yet to engage in business of any kind." It existed to be merged with some other venture, thereby taking the venture public while avoiding any approval process.
  • David R. Yeaman: Alpaca had previously been directed by David R. Yeaman. On April 16, 1997, Mr. Yeaman was convicted of multiple counts of conspiracy, wire fraud, and securities fraud. "The scheme involved the creation of public companies by reverse merger from public shells..." He resigned on April 22.
  • But is Yeaman really gone? From the May 7, 1997 Form 8-K filing: "While Mr. Yeaman has resigned from his affiliation with the Company ... it is contemplated that he will provide assistance as may be necessary for an orderly transition of their affairs. In addition, Mr. Yeaman may continue to be deemed an affiliate of the Company by virtue of his familial and historical relationships with the Company, its shareholders, officers and directors."
  • Self-styled financial guru Wade Cook doesn't want to be associated with ``convicted felon'' David Yeaman.
  • In December 1997, a press release from Integral Health, Inc. (OTC BB:LONG), announced John Collins as a new director. Collins had just resigned as ATG's CEO. At the same time, IHI announced its joint venture with ATG to market "IE crystals" in personal care and household products, including a line of products at IHI's "Longevity MetaCenters" (properties developed by the Montreux Group). Note: despite what IHI said in its press release, Collins never assumed his directorship role.
  • IHI's Form NT 10-K filed on March 27, 1998, explaining why their required annual report has not been filed, was signed by Mark Brady, Chief Operating Officer. This is the son of ATG's CEO, Lawrence Brady. ``The analysis and accounting is currently in progress but due to the unavailability of necessary records has not yet been completed.'' By October, 1998, Mark Brady had left the company.
• 21st Century
  From the company web site: "The origin of 21st Century Global Network, LLC is a story of such nobly inspired vision and unprecedented collaboration that most who first hear the account find the entire concept beyond the scope of credibility." Yeah, right.
  • 21st Century Global Trust, LLC, is the third party in the joint venture of 21st Century Global Network, with IHI and ATG.
  • The president of 21st Century Global Network is Mark Yarnell, "The Greatest Networker in the World" (Upline Magazine, 1997, as quoted on his personal web site on AOL). Yarnell is hyping the joint venture like mad to potential downline members. You can hear Yarnell's revised sales pitch, including the hype about IE being a discovery of equal importance to penicillin, at 1-800-655-9094. The web site for his downline is www.powersystems.net/21/. (Update 4/3/2001: 21st Century is dead. Here is Yarnell's newest sales pitch.)
  • You can hear Yarnell's sales pitch, including the hype about IE being a discovery of equal importance to penicillin, at 1-800-655-9094.
  • Yarnell was formerly a multi-level marketing distributor with Nu Skin, a publicly listed company (NYSE:NUS). Why did he leave Nu Skin? We don't know. But the Pennsylvania Attorney General recently sued a Nu Skin distributor for pyramiding activity, and forced Nu Skin to offer refunds to customers and tighten controls on its distributors.
  • Considering becoming a 21st Century distributor? Read our Mark Yarnell FAQ. And see him whine about our web site.
  • [Nu skin] sells body-care products and dietary supplements... In 1993, the company and three of its distributors agreed to pay a total of $1,225,000 to settle FTC charges that they made unsubstantiated claims for [three Nu Skin products]. In 1997, the company agreed to pay $1.5 million to settle charges that it had made unsubstantiated claims for five more of its products. The products ... were falsely claimed to reduce fat, increase metabolism, and preserve or build muscle. -- from the QuackWatch entry on MLM scams.]

• Press releases from the Athena mailing list discuss the link between homeopathy and IE crystals. The mailing list is maintained at www.medicinegarden.com.
• Readers blasted Mother Jones magazine for running a gullible, poorly-researched article by Mark Castleman about ATG's IE crystals and homeopathy. Also see this crummy article at WIRED News.
• Homeopathy: The Ultimate Fake, by Stephen Barrett, M.D., creator of the award-winning QuackWatch web site.
• Position Paper on Homeopathy, by the National Council Against Health Fraud.

"The Force" or "The Farce"? - The Engine Sausage Scam

• The Financial Fraud/Consumer Protection division of the Oregon Department of Justice took a rather different stance on The Force and the product claims being used to sell it:
  

  " ATG developed and RESPONDENTS also market in Oregon another product, which they call 'The Force' ('FORCE'). ATG also developed, and RESPONDENTS have distributed in Oregon, marketing materials representing that FORCE improves gasoline mileage and automotive engine performance by virtue of its 'active ingredient,' which RESPONDENTS identify as 'IE' or 'IE crystals.' FORCE constitutes goods as defined in ORS 646.605(7)... Based on scientific analysis and test results obtained from qualified independent laboratory, the Department finds that each RESPONDENT knew or should have known that in truth and in fact, the product claims described in paragraph 9, 10, 11 and 12 ('the product claims') are false; that the publications and test results contained in the booklets described in paragraph 10 ('the booklet') do not substantiate them; and that 'IE crystals' or 'structures' do not constitute or create a detergent substitute, enhance detergent action or improve gas mileage or automotive engine performance."

  - From the text of the Assurance of Voluntary Compliance signed by TradeNet Marketing, which agreed to stop selling The Force in Oregon.
  
• The AVC that resulted from the laundry ball investigation required TradeNet to pay a penalty of $165,000 and to stop marketing laundry balls, The Force, and anything else with IE crystals, in the state of Oregon. ATG's AVC, on the other hand, merely included a $20,000 smack on the wrists. But the Oregon DoJ is not finished with ATG - according to representatives from the Consumer Protection division, they still have an open file on ATG and The Force.
• The California Air Resources Board says The Force doesn't work. And ATG may be violating the terms of the board's executive order.
• Advertising for The Force and an associated car care kit now appears on the web site of Comtrad Industries, a mail-order marketer of gadgets and high tech novelties. Like the TradeNet advertising that preceded it, this ad is full of wild claims about IE crystals.
• Media coverage of The Force: Senior World, American Investor, and the Financial Times. Syndicated columnist Bob Sikorsky, who is quoted in the articles, endorses The Force. Here's an ATG press release about Sikorsky that was picked up by The Auto Channel. But it should be noted that Sikorsky's book, Drive It Forever, is published by ATG Media, a subsidiary of ATG that is being sold to former ATG CEO John Collins.
• J. C. Whitney, famous purveyor of mail-order automotive junk, includes The Force in their catalog. It's not on their web site, but the magnetic fuel saver is just as bogus.
• The Society of Automotive Engineers doesn't think much of Bob Sikorsky. "Mr. Sikorsky has been hawking magic elixirs and 'mechanic-in-a-can' formulas for many, many years."
• King World Direct, a national direct-marketing firm, has entered into a joint marketing venture with ATG to distribute The Force.
• Empire National Company, a distributor for The Force, makes no mention of IE crystals, but does mention ATG. Empire is in Grants Pass, Oregon. And here's another distributor's page from Portal Market, in San Francisco.
• ATG's distributors claim there are patents on The Force. But all we could find was US Patent 5,312,566, "Air Intake System Device", awarded May 17, 1994, which would put it around the time of the Clean Air Pac, ATG's earlier combustion enhancer product. The patent covers only the delivery system, not the actual catalyst used. Specifically, the patent describes "a discardable device for placement within the air intake system of any combustion engine, said device being comprised of a package having a flexible outer covering; and a catalyst contained by said covering, said covering enabling said catalyst to pass therethrough at a controlled rate, wherein the passing of said catalyst through said covering into said air intake system during operation of said engine improves combustion efficiency."

The BASER Scam

• SEC filing: ATG's 1996 Form 10K, describing the BASER technology.
• Dr. Wolfgang Ketterle, a researcher at MIT, explains why the BASER description is misleading. Here's a web page on a real atom laser developed by his group at MIT; this one actually works.
• Bose-Einstein Condensation Home Page at Georgia Southern University. Find out who are the real scientists working in this field. Lots of links on this page, but none to ATG.
• Mona Charen column on the BASER, from 9/17/97. Mindlessly repeats ATG press releases as if they were fact; lists a bunch of scientists who have nothing to do with the BASER (e.g., Mary Lidstrom is a microbiologist.) Cites an article in Final Frontier Magazine as her source, but doesn't disclose that this is actually an ATG publication. Very shoddy work, Mona.
• The Light Party endorses ATG. Wacko new age political party based in San Francisco lauds ATG as a pro-environment company after encountering a press release on the BASER, "under development with Cal Tech University" [sic]. (This party also champions cold fusion.)

Loose Ends

1. Where are the IE crystal patents? ATG has been claiming since early 1998 to have ``secured the patents'' on IE crystals, but we found no such patents in the IBM patents database until February 16, 1999. So far, only that one patent has been awarded.
2. Who is Frances T. Phalen? ATG's S-8 filing with the SEC, 4/7/98 contains a consulting agreement signed with Mr. Phalen. Check out the SEC Investigation of Mr. Phalen for financial fraud committed in 1993-1994, while he was CFO of Aura Systems, Inc.
3. What is SOL-3? The name of this company came up in our investigation of ATG.

News and Public Discussion

• Silicon Investor discussion board devoted to ATG.
• Learn the 10 signs of a stock scam, from stockdetective.com. Looks like ATG fits #3, #4, #6, #7, and maybe #8. No comment on #5. See also this Business Week article on chop stocks.
• Yahoo news about ATG.
• Check ATG stock price at Yahoo, and vote on ATG's prospects at stockmaster.com.
• Red Hot Stocks profiled ATG on February 13, 1998. Rehash of old press releases, plus brash new claims about potential medical applications of IE crystals, and a lot of other screwy stuff.
• Yahoo on Integral Health, Inc. (OTC:LONG)

• 5/8/98: King World announces joint marketing venture with ATG to promote The Force.
• 9/30/97: ATG Signs Agreement to License Ie Crystals for Industrial Enzyme. Article in Chemical Online News.
• 8/18/97: KTI Corporation announces joint research with ATG on use of IE crystals for suppression of coke in hydrocarbon steam pyrolysis (cracking) furnaces in ethylene plants.
• 2/19/97: ATG Receives Initial Purchase Order For The Force In Korea. Article from www.envirobiz.com.
• ATG's COO threatens me with legal action for emailing their Advisory Board. Usenet news thread in alt.religion.scientology, sci.skeptic, and comp.org.eff.talk started by Mark Dallara. (Click on "View Thread" to see the entire thread.)
• "Ie crystals", "structured water", laundry balls and combustion enhancers. Usenet news thread in sci.chem, sci.engr.chem, sci.physics, and sci.skeptic started by Mark Dallara. (Click on "View Thread" to see the entire thread.)

ATG's Reaction to Public Scrutiny

• ATG labels its critics "terrorists", a favorite insult of the Scientology cult. (Scientology routinely refers to its critics on the Internet as "copyright terrorists".) From the www.ateg.com front door on April 24, 1998: "Our website is not the only one targeted by these Internet terrorists who have created these links. On the advice of our legal counsel and at the request of the authorities who are investigating these extremists, we are posting this notification." After we pointed out how closely their response mirrored Scientology's, ATG replaced "Internet terrorists" with "extremists" on April 29.
• Harold Rapp sent this threatening letter to Mark Dallara.

Contributions, Credits, and Legal Disclaimer

I, Dave Touretzky, built this web site with contributions from Mark Dallara and others. I am solely responsible for its content. My motivation for creating this site is to expose what I believe to be fraudulent activity. Neither I nor Mark Dallara have any financial interest in ATG.

Last modified: Wed Sep 26 23:25:43 EDT 2012