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PDFBased on public records and news stories gathered by TheStreetSweeper, supplemented with a 63-page personal background report, the CEO and the ex-con look very much the same. The names and birth dates match. The names of multiple relatives come up as matches, too. Other key identifying traits – including addresses, business ties and even partial social security numbers – correspond as well.
McGuire’s original corporate bio, published in regulatory filings, hints at further parallels. That bio begins when McGuire graduated from community college in 1974 and, following a long and unexplained hole, picks up in detail when he invented his first cleaning technology (armed with a mere associate’s degree) more than 15 years later. The mysterious gap in between corresponds with the very period when the convicted McGuire operated a drug business, news reports show, and twice served time in jail.
Those drug busts involved far more than a little weed. The first stemmed from cocaine distribution, and the second ranked as a high-profile case – involving drug smuggling, money laundering and racketeering – that generated widespread newspaper coverage and even spawned a “Frontline” documentary.
The latter case also featured a business that, like Ecosphere, recruited former professional football players in an effort to fuel its success. That business – a once-popular restaurant known as Crackers – became a favorite hangout for Miami Dolphins fans, past news reports show, before running into tax problems and later filing for Chapter 7 bankruptcy following its leader’s second drug arrest.
With McGuire at the helm, Ecosphere is now relying on its own football stars – Drew Bledsoe and Troy Aikman – to generate publicity and drum up business for the company. Just as Crackers scored valuable media coverage because of support from celebrity athletes more than 20 years ago, Ecosphere is now basking in the spotlight with the help of big-name athletes who’ve been promoting the company’s water-treatment technology as a solution to BP’s (NYSE: BP) massive oil spill in the Gulf Coast.
Investors wholeheartedly embraced ESPH at first, sending the stock to a near-record high of $1.75 a share two weeks ago, due in part to the company’s high-profile backers and the media attention they generated. The stock took a big hit a few days later, however, after TheStreetSweeper raised questions about ESPH’s track record and the company’s ties to a stock-promotion firm.
Since then, TheStreetSweeper has uncovered even more reason for alarm. It has spent the past week gathering and cross-referencing documents packed with overwhelming evidence that ESPH relies on a repeat criminal offender – aided primarily by members of his own family – to run its operations.
If true, experts say, ESPH should have at least disclosed these issues to investors who could not be expected to nail down such elusive information on their own. (ESPH failed to answer questions for this story.)
“Disclosure is not a matter of hide-and-seek,” emphasized Peter J. Henning, a Wayne State University law professor who previously worked as both a regulator and a prosecutor focused on white-collar crime. “Would a reasonable investor consider this important?
“Tell people,” he stated simply, “and let them decide.”
Drugs and Bribes
Assuming that ESPH’s leader and the convicted felon are one and the same – a theory that’s easier to prove than disprove based on available evidence – that disclosure might read something like this: The CEO of Ecosphere was convicted of felonies in two drug-related cases, one of which later resulted in clemency, more than 20 years ago. The company does not consider this matter to be material to its current operations.
That disclosure might be enough to deter investors who would normally refrain from sinking their hard-earned money into companies led by criminals. However, it would still lack the telling details – and the powerful impact – of the entire story.
TheStreetSweeper has therefore decided to provide a much fuller account of those convictions, fleshed out by past news stories and other supporting documents, for investors to read.
The story officially begins in mid-1978, court documents show, when officers nailed McGuire for distributing cocaine during an undercover sting. He was convicted of three felonies and, according to The Miami News (a publication connected to The Palm Beach Post), served 19 months in prison for those crimes.
McGuire was apparently free by early 1982, because he filed incorporation papers for a company known as Adobe Construction in February of that year. Roughly 10 months later, The Miami Herald revealed, McGuire saw a friend – Patrick Bilton – busted for allegedly trying to smuggle 400 pounds of marijuana into the country and agreed to help him arrange for a light sentence. Together, the Herald noted, the pair then turned to a powerful Florida politician for aid.
McGuire allegedly delivered bribe money from Bilton to Elton Gissendanner, the Herald reported, a well-connected Florida official who was serving as director of the state’s Department of Natural Resources at the time. With Gissendanner’s assistance, the Herald said, Bilton arranged to become a Marine Patrol informant and received probation – rather than an actual prison sentence – for his crimes.
However, the Herald said, Bilton wound up tricking Marine Patrol officers instead of helping them by leading them to a cocaine shipment that he had personally arranged. Officers found a wrecked Hatteras boat with about two kilograms of cocaine sprinkled on the deck, the Herald said, and assumed that the remaining drugs had simply sunk.
“They wrecked the Hatteras on the reef and had a second boat following it,” a federal prosecutor stated in the article. Officers “thought the rest of the cocaine was at the bottom of the water. They were taken in.”
Shortly after Bilton staged that wreck and secured probation as his reward, news reports show, McGuire won some valuable help from Gissendanner as well. Acting upon a recommendation from Gissendanner, those reports state, outgoing Florida Gov. Bob Graham approved a clemency request from McGuire that restored certain rights that he would have otherwise lost as a result of his first drug conviction.
Like Bilton, the Miami New Times would later report, McGuire won that favor based upon fabricated claims that he helped the police by serving as a government informant.
On its official website, the Florida Parole Commission lists Dennis Edward McGuire – with a birth date of Sept. 12, 1950 – as the recipient of that clemency award. Based upon documents reviewed by TheStreetSweeper, the chief of ESPH has that name and birth date as well.
For example, government records show, 21 people who obtained driver’s licenses in the state of Florida registered under the name of Dennis McGuire. Of those, 17 have conflicting middle names or middle initials that would rule them out as the head of ESPH. Of the remaining four, three are too young to be the CEO.
That leaves one: Dennis Edward McGuire, born on Sept. 12, 1950, and listing a P.O. Box in Stuart, Fla. – home to ESPH -- as his address. Jacqueline K. McGuire, identified in ESPH filings as the CEO’s wife and the company’s senior vice president of administration, lists that P.O. Box as her address in that same database as well.
Crackers and Convictions
That long-ago clemency award promised to open an important door for McGuire.
Without it, various newspapers observed, McGuire could not serve as an officer for any business holding a liquor license. Since Crackers restaurant – owned by McGuire’s Adobe Construction – would later become a popular “watering hole” that generated almost half of its sales from alcoholic beverages, news reports show, that license proved quite valuable.
Initially, past news stories indicate, McGuire encountered resistance despite his clemency award. At first, The Miami News reported, the state’s Alcoholic Beverages and Tobacco (ABT) division urged rejection of McGuire’s application with the following note: “Impairment of qualifications, convicted felon.” By installing McGuire’s father (Thomas) as its sole officer, the newspaper noted, Crackers managed to overcome that obstacle.
Crackers officially opened in February of 1984, Restaurant Business magazine reported, and quickly became a hit. The restaurant scored some big-time publicity when it hosted the official “Super Bowl Countdown” special ahead of Miami’s big matchup with San Francisco in 1985, the magazine stated, and soon inked a deal to expand its concept into a national restaurant chain. By early 1986, news reports indicate, two former Miami Dolphins – Larry Csonka and Jim Kiick – had already signed up to open Crackers restaurants of their own.
The Crackers success story proved to be short-lived, however. The Internal Revenue Service seized control of the restaurant for unpaid taxes by the end of 1986, past news reports show, with its leader nailed in a second – much larger – drug bust the following year.
This time, media reports reveal, McGuire and Bilton went down together as key players in a major drug-smuggling and money-laundering operation that stretched from the U.S. to Europe and beyond. McGuire pleaded guilty to racketeering and tax fraud in 1987, the Sun Sentinel reported, and received an eight-year prison sentence for his crimes. Bilton pleaded guilty to racketeering and marijuana importation, the newspaper noted, and wound up with an even longer jail term.
The case later caught the attention of PBS, which aired a “Frontline” documentary featuring former Bilton attorney Michael Levine in a starring role. Levine helped launder drug money for Bilton and fellow client Scott Errico, “Frontline” reported, the second of whom wound up charged with violent drug-related crimes.
“I was about to make a trip to London,” Levine told “Frontline” from his prison cell in 1989. “And all of a sudden, in the paper, The Miami Herald had a picture of Scott Errico and said he had murdered somebody – which I didn’t know that, you know, until that time.
“All of a sudden, it wasn’t a game any more,” he added. “All of a sudden, the person that was in the paper was my client I was assisting prior to that time … These are real people and real lives.”
Errico was convicted in 1991 of murdering two fellow drug smugglers, the Sun Sentinel later reported, and receivedconsecutive life sentences for those crimes.
Favors and Rewards
According to records compiled by the Federal Bureau of Prisons, McGuire apparently completed his own jail term in January of that same year.
McGuire’s original ESPH bio, totally blank from 1974 until the early 1990s, finally begins detailing his work experience – when he was already 40 – around that same time. He invented a new technique for removing paint from ships in the early 1990s, the bio states, and launched a company called Amclean to market that service in 1992.
McGuire then spent the next eight years securing patents and adding relatives – including wife Jacqueline and brother-in-law Michael Donn – to the company’s tiny executive team. Those three relatives now hold every executive post, save one, at ESPH itself. (According to corporate filings, three other relatives work at ESPH as well.) CFO Adrian Goldfarb, the former partner of a stock promoter with a checkered regulatory past, fills the other.
At one point, ESPH did recruit an accomplished outsider – investment banker Patrick Haskell – when pursuing crucial funding for the company. Haskell assumed the post of co-CEO in mid-2008, shortly after Bledsoe’s investment firm announced plans to sink $50 million into the company, and took over as sole CEO later that same year. But Haskell suddenly resigned as CEO last August, about a week after Bledsoe came through with a scaled-back commitment of $10 million (most of it dependant upon future accomplishments), and left McGuire once again in charge of the company.
ESPH rewarded Haskell well for his temporary service. Since Haskell helped ESPH raise $3.42 million in capital (an amount roughly equal to the cash Bledsoe invested), regulatory filings show, the company granted him 450,000 shares of stock as a “finder’s fee.” ESPH also granted Haskell 1.5 million stock options, priced at 49 cents a share, when he resigned as CEO of the company. Clearly grateful, ESPH gave Haskell another 50,000 stock options -- with an even lower strike price -- five months after he gave up his executive post.
ESPH has aggressively capitalized on Bledsoe’s connection to the company since that time. Together with Aikman, another retired football player and ESPH investor, Bledsoe has scored widespread media exposure for the company as it seeks a lucrative contract with BP in the wake of the Gulf oil spill.
Meanwhile, as the CEO of ESPH, McGuire himself has remained largely invisible throughout that big publicity campaign. He appeared in a local TV newscast (wearing ESPH’s stock symbol on his sleeve) more than a month ago, but has otherwise seemed curiously absent from the scene.
Of course, if he’s a convicted felon as the evidence suggests, then McGuire could have good reason to hide.
“It is a strange feeling, all of a sudden, to be thrust into the limelight for something illegal and finding yourself recognized by this illegal act,” Levine stated in that “Frontline” documentary so many years ago. “Forget about what you have done prior to that date.
“It doesn’t matter at that point. It is just that illegal act, from then on, that will be with you the rest of your life – no matter what.”
To contact Melissa Davis, the author of this story, please send an email to editor@thestreetsweeper.org.
