Here’s an article that Mr Keene dug up about Stephen Pierce’s BAOL venture.
You can read more about Stephen Pierce and BAOL on Salty’s site.
Stephen Pierce Previous Business Problems
I did some research and found this article from the Washington Times Newspaper.
November 28, 1997, Friday
Denise Gooden didn’t expect to get rich when she invested $7,000 in Black America Online Inc. in the spring of 1996. “I felt it was two young African Americans that were trying to do something,” said the 32-year-old travel agent from Michigan. By the end of the year, the only return Ms. Gooden and others had from their investment was a bitter lesson. The Internet service was out of business. Its two founders were gone, and so was at least $56,000 of investors’ money.
Short-lived Black America Online now is being investigated for securities violations by Maryland state regulators and has been accused of embezzlement by its largest investor. Even the company’s publicist intends to sue for unpaid work. The company that billed itself as the “Internet gateway for African Americans nationwide and Afrocentric peoples across the globe” was up and running for less than six months. The business plan circulated by Black America Online reads like a golden opportunity. The company projected it would have 2,500 subscribers within six months. For those 12 months, BAOL would rake in more than $3.8 million in revenue, with a profit margin of at least 70 percent, according to the projections. Just as impressive are the descriptions of BAOL’s top executive Stephen “Roc” Pierce, 27. The business plan calls Stephen Pierce a “self-styled aggressive marketing guru” who was “rapidly becoming one of the nation’s most successful debt negotiators and marketing consultants.”
Joe Madison, a D.C. radio talk show host with WWRC-AM, said the Pierces signed him to a contract to be a spokesman for the company.”He said they had a lot of investors.” When Stephen Pierce showed up at Mr. Madison’s home he arrived in a chauffeured limousine. The two sat at a computer and watched BAOL’s chat room filled up with subscribers. “I was impressed,” Mr. Madison said. “Everything he said seemed to be in place.”
The Pierces inspired similar confidence in others who invested in BAOL. One of them, Denver clothing designer Brendalinell Carhee, fronted the company $50,000 in cash and equipment and even helped arrange a corporate credit account with American Express. On New Year’s Eve, Ms. Carhee received a letter from American Express demanding that she repay $18,000 that had been charged on BAOL’s corporate credit account. The charges, she said, included televisions, stereos and clothes. “I just about lost it,” she said. “There was not one thing on there related to the running of Black America Online.” “It was all talk,” said Ms. Carhee, who has filed a civil suit against Pierce in Montgomery County. “Their paper trail shows they tried to start a business with other people’s money, then just skipped and ran.” When Ms. Carhee and other investors and business associates started trying to find the Pierces, they said, their phone calls went unanswered.
Later in the year, Stephen Pierce called Ms. Gooden and asked for more money, she said. He said he needed cash for a business trip to New York City. I said, “I don’t do personal loans,’” she said.
In an interview with the Sun Reporter, BAOL claimed it had more than 4,000 subscribers. But documents filed by the Maryland securities commissioner show that it never had more than 200 subscribers. At the same time, the Pierces were still making grandiose claims saying the company “generates about $80,000 a month in revenue (and) is near its break-even point.”
According to documents filed by the Maryland securities commissioner, investigators believe there may be grounds to charge Stephen Pierce with fraud and the sale of unregistered securities.
Mr. Madison agrees. “It all turned out to be, as far as I’m concerned, a big con game,” the talk show host said. “The stink of being hustled was clear.”
Efforts to reach Stephen Pierce over the course of several weeks were unsuccessful.