Tag Archives: scam

Ductor 1.1: Business as usual
(=no business)

Since my last piece about Ductor Corporation (registered also as Ductor Oy, Ductor Ab, Ductor AG, Ductor Ltd and other names) the company made several strange moves. Known in the finnish business press as an enterprise “to invest in, if you want to lose your money with near certainty“, it informed about a new investment round of 2 million Euro.

While that it is hardly new for an enterprise which took in “stupid money” investments of over 30 million Euro to develop a crackpot’s idea into a working product (offended by my wording? read Vol. 1), this time the first public announcement came after the round closed. But they nevertheless tried to make it look like a “successful public round”.

When I wrote about Ductor in July 2020, the round wasn’t there on Springvest’s website. This was also witnessed by the usual investor blogs, which told about the rounds before and after (Medixine and Multitaction), but not Ductor’s. Furthermore, the company claims the round had been active for 5 days only. Normally, these rounds last several weeks.

We can update our information to 2020 with the numbers Ductor released now.
Investments to date: 32,6 million (30,6M+2M); 2/3 from small shareholders.

Ductor is again predicting enormous revenue for the ongoing fiscal year and beyond, but this time, a new red banner appeared which warns explicitly that these numbers are as much phantasy as they are phantastic. This banner hasn’t been there before my July blog posting, where I criticized this practice.

This may well be a coincidence, as well as this whole mysterious “retrospective” investment round. But there is yet another coincidence, that appeared after I blogged about this enterprise.

Ductor Corp. has “updated” their 2019 balance twice since then. One of the updates – and that is quite unusual – contained an English translation of the auditor’s report.

This doesn’t counter a single character of my criticism, as it says straight that the balance is prepared under Finland’s accounting law, which is different from the rules in the countries where Ductor has moved its risks.

Adding to the bizarre story, this statement was audited and signed by Ernst & Young (now EY), which has been since under fire for providing the world with the worst (but most entertaining) auditing scandal in Europe’s modern history. The affirmation of correctness underwritten by an auditor, who can be duped by faked screenshots of bank accounts to sign off multi-billion frauds, counts … virtually nothing.

 

HumanCharger-Valkee leaving the stage

Finnish media reported last week, that Valkee Ltd. is now registered on the public list of insolvent debitors (protestilista). The maker of the HumanCharger scam devices, which has received stupid money investments of more than 10 million Euro and is chaired by the “famous” Timo Ahopelto, is now unable to pay bills as low as €1000.

The press reports show, that despite being otherwise a small and rather unimportant company, Valkee is still of interest because of the vast media attention it received in the past. This development was furthered, predicted and documented by this blog for years.

The snail media, having re-published my stories repeatedly without revealing the source, missed a certain detail. Valkee Ltd has also been forced out of their long-term headquarters in Oulu. Their website still speaks about “R&D and production facilities [which] are located adjacent to the company’s headquarters in Oulu, Finland”. In fact, Valkee could no longer pay the rent in Elektroniikkatie 3-5. The new address is in Lummintie 11 in Oulunsalo.

There is not much space for production and R&D, adjacent to a massage therapist.

The company is so desperate, it sells the devices now for $87 (previously $219). In Europe these are out of stock, no cash to manufacture any more. This is how the story ends.

Ductor, Vol. 1: Let There Be Gas

In the last weeks, there has been considerable interest in my blog post from May 2016, where I wrote about strange investments by LifeLine Ventures, managed by controversial investor Timo Ahopelto.

Of these, Valkee is the most notorious here in Finland. Its product, the earlight device which is now called HumanCharger, has become a popular synonym for “scam”. Valkee is technically bankrupt since 2017, has lost it’s last international investors, and was just a few days ago again noted in the press for being listed in the public register of insolvent debtors. Led by Ahopelto for more than 10 years, it is expected to leave the stage soon, but not before adding another 200 indiegogo crowdfunders to the number of 100.000 defrauded customers, who wasted around €200 each for a quack treatment.

uBiome, another declared favorite of Ahopelto and LifeLineVentures’ flagship investment, made devastating headlines in the US. After the FBI raided their headquarters, it turned out the founders – which Ahopelto held in especially high regard – had lied about nearly anything; one even about her age. uBiome filed for bankruptcy shortly thereafter, and their assets were auctioned – netting in about 1% from their earlier valuation of $600M.

The story of the third company I listed back then, Ductor Oy, is at least as bizarre as these earlier cases. However, it went mainly unnoticed so far. I try to line out its history, business and financing practices in the first part, followed later by another piece about their “revolutionary product”. Opinions, threats and the usual insults shall be put in the comments section or directed at earlightswindle@gmail.com.

>corrections after publication marked & at the end of the text<

May I have your full attention now, it is absolutely worth it. All details below, as unbelievable they might feel, are taken from the company’s own material and statements of the people involved. All is linked directly to sources. If there’s any speculation from my side, it’s noted in the text. Here we go.

 

Founded by “Jesus”

Ductor was founded in 2009 on orders from God. This can be directly inferred from the circumstances described on the Facebook page of Veikko Latvala. Ductor’s co-founder calls himself a “healer and seer”, who can cure “migraine, back pain and cancers”.

 

2008 and 2009 saw the publication of two books dictated by God into Veikko’s pen. God dictated even the colour of the book cover, according to Latvala. (The full translation is available here as PDF.) In the end, Ductor’s co-founder even hints he might be a reincarnation of Jesus, because a “Holy Man” is sent to earth every 2000 years.

While God was still dictating the second book (to becompleted in spring 2009), the farmer Latvala founded Ductor together with Ari Ketola. Ketola has changed his name to Ari Mokko in 2020. The company entered the finnish trade register in February 2009 (no. 2009/613158).

 

Latvala was Ductor’s chairman from 2009 until 2012, when he handed the position over to the CEO Ari Ketola, a faithful follower of the prophet. Latvala then assumed the role of Ductor’s director until June 2019. Ductor’s investor material from 2017 (PDF) says, that Latvala was responsible for R&D and product strategy.

According to archived versions of Ductor’s website, Veikko Latvala is an “inventor” and “the original founder of the Ductor idea”. He resigned from the board last year (Latvala turns 80 in 2020) but remains the second-largest shareholder.

The third director has been Timo Ahopelto since 2012, the year LifeLine Ventures started to invest in Ductor. Neither Ketola, Latvala nor Ahopelto have an appropriate scientific or somehow professional background. Latvala was a farmer, Ahopelto helds a Master in industrial management, and the CEO Ketola has only had vocational training as a “merkonomi“, the finnish basic requirement for salesmen. The finnish press picked up these strange directors’ background once in 2016.

 

A sticky vision

The company was probably financed during its early years mainly by Ketola, who had made a small fortune by introducing the ESPRIT clothing brand onto the finnish market.

Ductor today tells about its beginnings (source: Ductor material 2019, p.20), that Latvala and Ketola “analyzed” the problems of the world’s food production and wanted to find biological methods to ensure the planet would cope with population growth. Ketola than organized a “challenge” to scientists at the University of Helsinki, prompting them to find a method which employs microorganisms to produce ammonia – while removing nitrogen from agricultural waste.

I cannot really imagine a situation, where an outsider – especially a textile salesman fulfilling a vision of a farmer-prophet – contacts a leading university’s scientists, “hey we need some fitting science for this idea we had”. Accordingly, the first patents filed for Ductor list only Latvala and Ketola as “inventors”. Only later applications then have names of actual researchers, too.

The prophet’s idea, without a working process, however, was enough to ensure excessive funding in 2012 by TEKES (now part of BusinessFinland) and, as noted before, by Ahopelto’s LifeLine Ventures. This was probably made possible by the first patent application for the “Ductor technology”, filed by Latvala and Ketola in June 2012.

Ductor was awarded instantly a staggering 1,145 million Euro by TEKES, and received an undisclosed sum from LifeLine Ventures. During the following years, public funding granted would rise to a total of 3,7 Million.

1,4 million were granted in 2014 and 2016, when Ahopelto was on the board of TEKES. Here’s the same problematic pattern we’ve seen before with Valkee and other companies.

Despite their involvement with Ductor, its founders made appearances as prophet and apostle – that’s my interpretation of Ketola’s statements. Veikko Latvala was repeatedly cited in the yellow press for his prophecies, in which he predicted, for instance, the end of Finland’s governing coalition in 2014, and the end of the European Union for 2017.

To be fair, he’s widely regarded as a crackpot, although some still adhere to Latvala’s teachings: There is a whole website with his forecasts,of a disciple[*] which published the final message on May 31 2020. It commented on the Coronavirus pandemic and said “you will hear from me again”.

 

Cash flows

Ductor’s main business in terms of generating cash flow have been ever repeated investment rounds. Until June 2019, it’s been over 21 million through direct issuing of shares, crowdfunding, convertible bonds, and other instruments.

 

Several rounds were organized by kansalaisrahoitus.fi (now turned into Springvest). The last offerings I’m aware of have been convertible bonds, partially through a finnish variant of “crowdfunding” in February 2019 ((planned 2,25 million Euro) and June 2019 (3,6 million).

 

Promises and Lies

All investor prospectus material issued for the public rounds reiterates these points:

  • the multi-billion market for Ductor’s biogas solutions
  • the multi-million revenue predicted for the coming fiscal year
  • the technological progress and the growing customer base.

The latter will be X-rayed in my second post. The billion euro potential is something that many startups include in their investor attraction marketing. The exorbitant revenue predictions for the next fiscal year are a Ductor specialty, given that Ductor has made no revenue at all to date.

As an example, here is Ductor’s forecast as of December 2017 from the 2017 prospectus. Projected revenue in orange, the real result until 2019 is marked in dark blue.

In early 2019, the revenue for the already completed fiscal year 2018 was said to be €1,3 million, and for the ongoing 2019 a 75 million jackpot was expected.

 

In the balance for 2018, which was published in July 2019, the 1,3 million had shrunk to €14.000. The prognosis for 2019 was quite volatile through the fiscal year, it was given as 40,8 million in June (down from the 75 million in February).

 

The published balance for 2019 showed €726.000 instead – another 40 million evaporated in half a year. A closer look even reveals, that of this meager result only €17.700 were from sales to other entities than their own group.

To repeat the joke from above: Actual revenue is marked in neon pink.

 

In my understanding, forecasts for the ongoing fiscal year should be somewhat more reliable. Here, investors are recruited with a promise for the upcoming months. This is clearly something else as the extraordinary prognoses for the years to come.

While this may still be somehow in a grey zone, Ductor has also lied directly in more than one prospectus. It’s about the formula which is in all material: In the last 5 years, none of the board members or other leading management

has held a leading position, such as a member of the administrative, management or supervisory body, or has been a member of the management body as such in a company that has filed for bankruptcy, liquidation or reorganization

Timo Ahopelto was chairman of at least one company that filed for bankruptcy in 2018. Optomeditech Oy folded in November of that year, with Ahopelto being chairman since 2013, according to the finnish trade register (no. 2018/531107).

I did not check systematically if there are more cases, since the worst (like uBiome) are not on LifeLine Ventures investments page. Such false information can lead to legal action and liability claims.

Ductor had hinted at a possible IPO in 2020, but this did not go further. It would have led to more scrutiny, which inevitably had uncovered such weak points. Instead, Ketola/Mokko has told that a “partial exit” is planned for this year. Hard luck for the new owner.

 

Where’s the money?

Finnish companies are allowed to include all kind of acronyms into their name, also such that resemble those of foreign business entities. A firm could those be called a PLC, Ltd, LLC, Inc., GmbH, AG, or whatever, without being incorporated in the respective countries as such. This is helpful, when a company needs to assume or deny identity to conceal creative accounting or unclear transactions.

Ductor has pulled such a trick by registering in Finland concurrently as “Ductor AG”, like the german and swiss Aktiengesellschaft. According to the swiss trade register (SHAB), it founded a company with the same name in Zug am See in 2018. Since then, it’s called a “swiss-finnish company”. In Ductor’s balances since then, there are assets of several million Euro allocated to Ductor AG and the german subsidiary Ductor GmbH, and other such companies in the rest of the world.

The AG has not filed a balance yet, but the GmbH has done it up to 2018. The german branch has had a debt of 1,4 million Euro, of which 437.000 were not covered by other assets. In other words, Ductor’s balance is in fact not “balanced” as required, when we assume that the GmbH’s debt is to Ductor in Finland, as the finnish papers suggest.

It’s not clear what else is behind this construct, and it’s nearly impossible to get a complete picture from outside of the company. An auditor would need access to internal documents from all continents, which seems unrealistic.

With all that money, it may be possible to make progress and even develop revolutionary methods and products as envisioned by Latvala and Ketola ten years ago. The real outcome of this mayhem, however, will be the subject of my second Ductor post.

In my opinion, one thing can be taken for granted already: Even if Ductor would make profit in a distant future, the finnish tax payer and the crowdfunder-investors won’t get their share. Ductor is prepared.

 

[*correction 8.8.2020: the website in question is influenced by his teachings, but the maintaining person says the prophecies are her own; Latvala made her see these]

Whistleblower: BEMER is an intentional scam, ruled by fear

This blog is constantly receiving tip-offs. Usually these come from people who want to reach a broader audience and, often for good reasons, hesitate to reveal their identity.

The following document was apparently created by a former CXO of BEMER Group. When I received it this autumn, I had concerns that it could be fabricated. There is the writing style – it’s a rant by someone who didn’t leave in peace. There are also minor inaccuracies where the Finnish BEMER in Fibromyalgia-trial is described.

However, using additional information and after consulting with 3rd parties, I was able to confirm the identity of the author and to verify large parts of the content. The document was converted into PDF to withhold metadata. This removed the name of the author and a former co-worker. It is otherwise unredacted.

An insider account from the heart of the BEMER scam
(Download PDF)

Main takeaways:
  • BEMER Group is fully aware that there’s no scientific base for health claims
  • People who point to the lack of efficacy & evidence are fired.
Furthermore:
  • Dr. Klopp knew that his “Institute for Microcirculation” has no credibility
  • Practically all written on this blog about BEMER was confirmed or topped.

 

In other words, BEMER is an intentional scam. Evidenced by >10 CEO changes in a few years, it is ruled by fear, and even the Gleim family suffers from the patriarch’s hand.

Konkurssi raukeaa – Ei se mitään, SpaceNation jatkaa USA:ssa

Avaruuskonkurssiyhtiöstä Space Nation aka Cohu Experience Oy tuli viime kuussa kaksi ilmoitusta. Ensin Privanet kertoi, että konkurssi raukeaa, koska varoja ei riitä edes konkurssimenettelyyn. Tämä ei ole yllätys, yhtiöllä ei koskaan ollut substanssia. Vain heikko bisnesidea ja medianäkyvyyttä.

 

Sitten yhtiö ilmoitti, että sen toiminta jatkaa Yhdysvalloissa. Space Nation olisi rekisteröity uutena firmana. Siitä kertoi sen johtohahmo, islantilainen PR-mies Hjörtur Smárason, joka nimellä PolarExpress myös laittanut Wikipediaan firmaa kehuvan artikkelin.

Outo seikka: “Uusi firma” käyttää entisen suomalaisyhtiön nettisivua, niin kuin se kuuluisi sille. Itse asiassa tämä pitäisi olla osa konkurssipesää, ja on todennäköisesti entisen yhtiön ainoa omaisuus, jolla on vielä jonkinlaista arvoa. Se on edelleen rekisteröity Helsinkiin, Cohu/Space Nationin kotiosoitteeseen.

Yritin löytää “uusi Space Nation” USA:n osavaltioiden kaupparekistereistä, jopa SEC:n listoilta. Tuloksetta. Ei ole varmuutta siis, puhuuko tämä mainosmies totta. Toisesta asiasta olen varma: Heidän astronauttivalepuvuissa ihan jokainen näyttää idiotilta hassulta.

UK Health Department slams magnesium sellers for trademark infringement

To my surprise, I received a call from the UK Department of Health and Social Care last week. They wished to thank me for notifying the department about the “NHS” trademark infringement by Nordic Health Sprays aka Pohjoismaiden Terveyssuihkeet Oy. I had nearly forgotten that I copied a text and, as required, my phone number into a government contact formular some weeks ago.

The NHS logo must be used in support of its “core principles and values”. The UK National Health System is a very trusted brand, which stands for (examples) “quality of care, …safety, confidentiality, professional and managerial integrity, accountability” and so on.

Selling questionable supplements and magnesium sprays does obviously conflict with these values. The finnish company received a cease-and-desist order, and acted immediately to avoid compensation claims. It has not filed balances since 2016; a 5-digit claim could pose a real threat.

Its website misused several brands. Before…

…and after.

 

The original manufacturer of the magnesium products distributed by Nordic Health Sprays, BetterYou Ltd from the UK, also had to remove the NHS logo. Visitors would get the impression, that the NHS somehow stands behind the “Backed by Science” line.

 

 

Other institutional logos are still there, to milk some confidence for the flimsy magnesium health claims. Supplements and other OTC “health products” are typically marketed with such illegal or unethical methods.

I would never try to take them on systematically, because it’s a complete waste of time. One busted lie is soon replaced by another. That was just a demonstration and the result of a 5 minutes effort.

HumanCharger-Valkee’s balance 2019: Guess what?

Finnish Valkee Ltd, maker of the questionable HumanCharger earlight device, has just filed its 2018-2019 balance. It’s the same as every year: Overwhelming loss and now again a sharp drop in revenue.

And as every year, earlightswindle.com makes it available.

Valkee balance 2/2019 (valkee2019.pdf)

Turnover has fallen by 34%, thus eliminating last years somewhat surprising rise. It’s now 637.000€, i.e. even less than in 2016/17. The effect of the US launch seems to level out. Good news for them: Loss is down to 594.000 Euro. But this means, that still every Euro turnover results in one Euro loss – as last year.

HR costs are down from 411.000 to 268.000€, and with (only) 226.000€ paid out, the question is who’s still employed by this company – besides its CEO and some salespersons.

Valkee is struggling to survive, as it did since 2007 – and now it became clear, how the project is “scaling”. It will exist as long as its investors are willing to pay. The plug may be pulled sooner or later.

That’s an enduring embarassment also for Interbrand, which really messed up by calling HumanCharger a “breakthrough brand” in 2017. The only thing that will break here will be the investors’ patience.

Over & out, as I leave this rather boring news piece to the snail media, Kauppalehti, HelsinginSanomat or whatever, for those laties who have not cancelled subscriptions yet.

Update 13.7.2019: Kauppalehti did as expected and translated this into finnish as “news”. Always welcome on my blog.

Transdermal Magnesium, Fake Studies, and a Family Business

When I wrote in 2017 about Finland’s leading pharmacy chain intentionally selling magnesium spray snake oil to its customers, I wasn’t aware of the scale of the transdermal magnesium scam.  There are hundreds of manufacturers and sellers, and there are dozens of such products on sale in finnish pharmacies.

One company caught my eye: Nordic Health, which maintains websites for all nordic countries. It has “Magnesium Sleep lotion for mothers and babies“, “Magnesium butter“, and 17 (!) other transdermal magnesium products. The tagline: “Scientifically proven“.

 

According to Nordic Health, its magnesium is effectively absorbed through the skin. If true, that would be strikingly different from all other transdermal magnesium preparations. The company presents studies to bolster its claims (click to open).

 

  • #1 looks like an incomplete citation of a real, published scientific study.
  • #2-#6 are sponsored, unpublished statements about different products (Magnesium, vitamins) allegedly done by an university. Obviously it’s nothing about these specific Nordic Health formulations.
  • #7 and #8 are unrelated studies about inflammatory bowel disease (!) in eastern Europe.
  • #9-#12 are mainly unidentifiable, unpublished sponsored statements.
    I managed to find #11 online; it’s an uncontrolled questionnare test (“did you sleep better with this product?”)

 

To make it short: This is no scientific proof, this is not even science. And it’s accompanied with logos of universities and the NHS. I bet Nordic Health hasn’t any right to use the NHS’s mark to pump up sales.

Nordic Health Sprays tells it’s a finnish family business. …but what kind of family?

NordicHealthSprays Family Business

 

But wait, there was a real study at the beginning, right? The incorrect citation was

  • Watkins, K., Josling PD. 2010. A Pilot Study to determine the impact of Transdermal Magnesium treatment on serum levels and whole body CaMg Ratios. European Journal For Nutraceutical Research.

 

Fake Journal, Fake Study – Good Product?

This study is widely quoted and reproduced on webshops which sell transdermal magnesium. Get it, for example, from the “Magnesium Health Institute” (PDF). It is even cited in papers in (allegedly peer-reviewed) scientific journals. Although it’s not found as an original paper in any citation database.

It is not in PubMed/MedLine, and no-one seems to know the “European Journal for Nutraceutical Research“. I’ve done a lot of research into predatory journals (soon to be published), but this one baffled me. The journal is not in the NLM catalog, meaning it has not even existed at any point in time. There’s no trace whatsoever currently on the net. Nonetheless, it’s widely used and cited by shady and half-shady businesses – like extempore, the customer magazine of the finnish pharmacists’ association.

 

Finally, I identified the “journal” through the always-appreciated internet archive. The “European Journal for Nutraceutical Research” has been a sub-blog on the defunct phytomedcentral.org website. It had less than five entries and was accompanied by other fakes, like Plant Taxonomy Journal, Plant Anti Cancer Journal, Veterinary Plant Medicine Journal, and Pharmaceutical Plant Research Journal. These were all used to push questionable supplements or “herbal remedies” by junk studies disguised as scientific journal articles.

It’s in a way a copycat of Andrea Rossi‘s method to publish his cold fusion junk papers in his “Journal of Nuclear Physics“, which is in fact only his blog.

What if I’d call my gloom blog Journal of Scientific Innovation?
(All these names are already used by scammers.)

If it wouldn’t be so symptomatic, it would be funny. The source is long gone, but the misinformation lives on. I won’t go into details of the study, the strange titles of the authors and the obscure “Herbal Research Center” where it was done.

And this is the best existing evidence for transdermal magnesium?

It is, according to this review of transdermal magnesium, which was also published through a controversial publisher. Generally, at the moment only sub-standard stuff like this exists.

 

***

ps. the address, where “Nordic Health Sprays” (Pohjoismaiden Terveyssuihkeet Oy) claims to reside, is a family home on sale:

 

Dr. Klopp dies, and BEMER confirms his “institute” had been virtual

Dr. Rainer Klopp, inventor of the BEMER method, has died. On Monday, May 6th, a sudden peak in blog visitor numbers indicated something has happened, and soon there were the first obituaries on Facebook and elsewhere.

One of these can be read on IMIN-org.eu, the website of the “International Microvascular Net”. Despite its name and self-description, it has nothing to do with microcirculation or vascular research or other scientific activities. It’s a BEMER International front-end, led by outsider physicians, fake doctors, homeopaths and crackpots (more on this on request, probably it’s self-evident to readers).

The obituary has a fine detail. It tells about Klopp’s “only recently completed Institute for Microcirculation“.

That’s clear and no misunderstanding. They, if anyone, know the truth. And that I was correct with my findings about the phantom institute. Hostile comments do not change the facts.

***

ps. Dr. Klopp is gone, but his genius lives on!

– Now in BEMERwater. I can assure everyone, it is as effective as BEMER therapy.

Social Media: “HumanCharger” is comedy gold

The Sunday Times (UK) just had an absolutely awful piece on “biohackers”, and it seems that readers have a clear favourite which one is the most ridiculous “biohack” of all.

HumanCharger is trending on Twitter at this moment, and it’s not quite the way the scammers dream of.

Some years ago, one of Finland’s leading newspapers asked its readers, which is the worst product failure ever in this country. The HumanCharger won that poll unanimously. The public reaction seems now to be the same whatever whenever.

But once upon a time, things were different, when I started the earlightswindle.com-website. It is fairly outdated, but gives a good picture of the situation then, when the media hyped the Valkee device – now renamed “HumanCharger – and there were few critical voices as mine. I’m sort of proud still, for having steered the mainstream here./-ed.