As the group attempted to meet again with Stanley, they encountered a new problem: Posted outside Stanley's office were two large bodyguards, and word around the office was that they were armed. Wiskowski and Badger walked past the guards and entered the office. Sensing he was close to being ousted, Stanley suddenly was in a mood to bargain, according to people present at the meeting.
"Give me 90 days and I'll turn the company around," he told them. Cam Fraser, another recently hired executive, approached the office door and asked the bodyguards to leave, but they refused. As nonchalantly as he could, Wiskowski feigned a yawn and a stretch, clasping his fingers together and turning his hands so that his two thumbs were clearly pointing downward - the prearranged signal to call the cops.
Within a half hour, squad cars arrived and removed the bodyguards peaceably. Although Stanley steadfastly denies bodyguards were ever on the premises that day, the two men, Lindsey Largess and Anthony Vaughan, would file suit three months later accusing Pixelon of false imprisonment and slander in connection with the incident.
The bodyguards gone, the three Advanced Equities principals remained in Stanley's office trying to coax him into the conference room. Meanwhile, board member Kelley was arriving by cab. The driver, panicked by the cop cars, refused to stop, and Kelley says he jumped out of the car while it was still moving.
By nightfall, the board meeting finally got into gear. In addition to Stanley, five board members - Wiskowski, Curtis, Ward, Kelley and Snyder - were there. People were still trying to track down Moore, the seventh director.
Fenne, ever a master at deception, opened the meeting with a cryptic remark: "I've reached an interesting agreement with the gentlemen from Advanced Equities, but we'll leave that action for last in our meeting," at least four people remember him saying.
His remark spooked the group and Ward now worried that the plan to remove Stanley had been derailed. He silently counted votes, wondering if the needed four members would turn against Stanley. Just a few hours ago, three members - Ward, Wiskowski and Curtis - had vowed to vote in favor; it was unclear how Kelley and Moore would vote. Any splintering of this fragile coalition would surely sink the plan. Stanley's unique ability to defy reality was showing itself again.
"I kept thinking, 'This son of a bitch is going to survive this meeting with his chairmanship intact,'" one board member recalls. "'This 350-pound guy is going to squeeze through the crack!'"
The meeting moved on to other matters. Finally, Wiskowski smacked his palm on the table and made a motion that Stanley be suspended as chairman and CTO for 30 days. "You betrayed me," one meeting participant remembers a clearly stunned-looking Stanley saying. Ward seconded the motion before Wiskowski had a chance to respond. Stanley was now even more shocked. "Now I know who my Judas is," Stanley replied.
A clearly irate Snyder called the move illegal in light of the employment agreement Stanley had executed only a few months earlier. As the sparks continued to fly, Bart Moore finally appeared, dressed in cowboy boots and jeans that were caked in mud. When Wiskowski's measure finally came up for vote only Stanley and Snyder failed to vote in favor. Stanley's reign at Pixelon was over.
Almost immediately, however, it was clear that the drama would not be over. Soon after the board meeting, word circulated in Pixelon's inner circles that someone had found a document on Stanley's computer suggesting he had been harboring a profound secret. Addressed "Hi Guys," the undated letter laid out a detailed plan in the event an unidentified "they" ever discovered his con. "The fact remains that someday they might get lucky ... and I need to be ready to depart the country altogether in that event," he wrote. "If that is God's will for our lives, then so be it." The letter discusses using hair dye and colored contact lenses to create a new identity, and eventually reentering the country as a naturalized citizen. "I would only do this after a face change through plastic surgery," the letter says. Snyder says Stanley wrote the letter but never sent it out. He declines to discuss the letter further, saying it is likely to be the subject of a lawsuit he plans to file against Pixelon.
Despite the rumors that flew about the document, a December severance agreement shows Pixelon agreed to pay Stanley $660,000 over 30 months to purchase 2 million shares of his stock. (Stanley had owned 3 million shares and had options to own another 9 million. He says he has since sold yet more shares but still owns a small amount of Pixelon stock.)
Besides facing the extreme legal exposure of paying off an officer whose integrity there was good reason to doubt, Pixelon's management faced other problems. It was only after Stanley signed his severance agreement preventing Pixelon from making any future legal claims against him that executives learned they had failed to secure the rights to future versions of the Pixelon Player, the software used to play video over a computer. In their haste to execute the agreement, they had failed to notice that the player had been developed for Digital Motion by an outside consultant who still owned rights to the source code.
By February, Pixelon's troubles just seemed to get worse. The CEO brought in to reorganize the company suddenly resigned, creditors began demanding payment for hundreds of thousands of dollars in unpaid bills and jilted partners began taking legal swipes at the faltering company.
More serious still for Pixelon are lingering doubts about the value of Pixelon's intellectual property. Several investors and potential partners who had considered forging deals with Pixelon say their initial inquiries into Pixelon's technology gave them pause. The Pixelon Player, they say, appears to borrow so heavily from Microsoft technologies that its worth is questionable.
Meanwhile, the encoder, or compression technology, attracts slightly higher investor interest. A prospectus and at least two Pixelon executives say the company's current version of its technology has at least as much to do with work done by LocoLabs - a San Jose, Calif.-based company that bills itself as having "magnetically attracted a staff of mad-scientist types," - than it ever did with anyone at Pixelon. (Brad Hoffert, LocoLabs' president, didn't respond to numerous requests for an interview.) The arrangement means that LocoLabs has joint ownership of the technology. Also, the technology is generally regarded as comparable to products already being manufactured by companies such as Ligos and Digital Bitcasting.
That might explain why a $70 million offer in January by New York-based Internet broadcaster On2.com quickly fell by the wayside. Pixelon entertained the suitors, according to two sources familiar with the negotiations, but ultimately refused to let On2 engineers inspect Pixelon's technology. In May Pixelon laid off its remaining employees.
Acting CEO Ward and Pixelon's remaining executives were fired last week. Ward was not available for comment. Peter Foley, executive vice president at Unified Financial Services in New York, was named president. Wiskowski says the new management plans to assess the true worth of the company's assets in an attempt to either sell Pixelon or attract new investors. An initial audit conducted Wednesday indicated Pixelon has proprietary rights to an advanced encryption scheme and technologies for inserting personalized ads that collect user feedback in real time, which might be considered a core asset. One executive still believes Pixelon's assets could be worth as much as $25 million.
Stanley, meanwhile, wasted no time rising from the ashes of his failed company. A week after receiving a down payment of nearly $200,000 from Pixelon, public records indicate he paid nearly $181,000 in cash for a house in Big Bear City, Calif., and put it in the name of a company he had set up called Landragon Development. Through Landragon, he had several other properties in escrow, according to real estate and law-enforcement sources in San Bernardino County. Working with Snyder and several other close friends, Stanley established several other businesses, including Lazaron Ventures, Axitar and Ailos. Snyder, who is president of Lazaron, says the company's initial focus will be on using satellites to access the Internet.
Then, in early April, Stanley got the call he had dreaded for four years. A disgruntled associate from one of Stanley's earlier San Juan Capistrano ventures had spotted a picture of David Kim Stanley, one of Virginia's 12 most-wanted fugitives, and thought it looked a lot like the man called Michael Fenne. A few days later, as San Bernardino sheriff's deputies moved to take custody of Stanley, they found only his empty house, which had clearly been vacated in a hurry. Stanley says he turned himself in after Snyder, who had heard about the imminent capture through the grapevine, convinced him there was no other way to respond.
He now sits in Wise County jail, where he is being held pending a hearing in which a prosecutor will ask that Stanley finally serve the prison sentence he received more than a decade ago.
From coast to coast, over a span of 15 years, wherever Stanley has gone, he has left behind a chorus of associates, acquaintances and former friends who call him the biggest scam artist they've ever met. What is less clear, however, is what drove him to deceive. There seem to be no fast cars, no summer cottages in the Hamptons and no fancy yachts that suggest Stanley ever pocketed any money from his scams.
For now, no one knows for sure if Stanley was simply good at concealing a fortune in ill-gotten gains or if the con artist simply lied and cheated out of sport and revenge. What is clear is that he believes he has done nothing wrong, sees great things in his future and, when he gets out of jail, plans to finish what he started at Pixelon.
"In running for my life, I found my life in technology," says Stanley, who likes to remind people of all he was able to accomplish at Pixelon without so much as a Social Security number. "When I'm operational again, whenever that will be, without the chains and limitations of being underground, I am going to build that network."
