Darrell Lainhart And Mattie Lainhart WWW.CLEANTECHNANO.COM Lainharts' Assets Frozen Sherwood Arkansas

Lainharts' Assets Frozen
by Temporary Restraining Order




By Gwen Moritz, Arkansas Business
7/31/2009 2:46:46 PM


The assets of W. Darrell Lainhart of Sherwood, his wife, their companies and two business associates have been frozen by a temporary restraining order issued late Thursday by Pulaski County Circuit Judge Timothy Fox.

The order had been requested Wednesday by A. Heath Abshure, commissioner of the Arkansas Securities Department, after a staff investigation concluded that the Lainharts had engaged in securities fraud dating back to 1993.

Specifically, the Securities Department alleged, Darrell and Irene "Mattie" Lainhart, along with Rex Robertson of Little Rock and James Stead Jr. of Chicago, collected at least $12.8 million - $8 million of which went straight to the Lainharts - by selling shares of unregistered stock in a company called Clean Technology International Corp. CTIC purports to have developed a machine that can dispose of hazardous waste and, as a byproduct of the process, produce valuable carbon nanospheres.

Fox also granted Abshure's request that Lainhart and the other defendants, who are not licensed to sell securities in Arkansas, be restrained from offering or selling any securities in Arkansas or destroying any financial records. The department's request that a receiver be appointed to plow through 16 years worth of history will be considered at a hearing scheduled for Aug. 18.

As Arkansas Business reported in April, many of Lainhart's investors are Arkansans, and many of them firmly believe in the potential of the CTIC technology. The Securities Department's complaint for the restraining order included affidavits from some of the same investors interviewed by Arkansas Business, including Danny Cross of Pensacola, Fla., Little Rock residents David Wardlaw and Tom Strickland, Danny Harris of North Little Rock and Rick Andrews of Cabot.


Shannon Underwood, a staff attorney for the Securities Department, told ArkansasBusiness.com that the investigation of Lainhart, CTIC and related entities had taken nearly a year. According to the department's complaint, the financial information included in the court files had to be "stitched together" from a variety of sources.
"In order for the remedies sought herein to be effective, a more accurate accounting is needed, but can only be provided by a more in depth and wide ranging investigation and analysis, the kind that can only be provided by a receivership," the complaint said.

The department was able to trace some of the millions of dollars that flowed in from investors who believed their money was being used to prepare CTIC for an initial public offering of stock. Among other things, according to Abshure's complaint, Darrell and Mattie Lainhart used investor money to buy real estate, make mortgage payments and collect antique cars.

Cross, the Florida investor who has led a shareholder revolt against the Lainharts, said in his affidavit that Darrell Lainhart gave him a personal tour of his 4,400-acre "Little Switzerland" estate on the border of Garland and Hot Spring counties. Among the sights: 21 pieces of heavy construction and farm equipment, a hunting lodge that would accommodate up to a dozen people, "heated and cooled tower deer stands" and two concrete dams across a stream that were large enough for two vehicles to cross.

While Mattie Lainhart worked for the city of Sherwood until 2002 and receives some pension and Social Security benefits, the Securities Department concluded that Darrell Lainhart "does not appear to have any outside income" other than the sale of CTIC stock.

A man who answered the phone number listed for the Lainharts' Sherwood home said Darrell Lainhart "was going to be unavailable." Lainhart has never responded to requests for an interview with Arkansas Business.

Rex
oklahoma city, Oklahoma
U.S.A.