Michael fenne made a name for himself last October when, as head of Pixelon, he orchestrated the most outrageous promotional event ever seen in the Internet Economy. To celebrate the streaming-media company's launch, Fenne shelled out $12 million to stage a star-studded party in Las Vegas. Last week, he was back in the news: Virginia authorities jailed him without bail, ending a four-year manhunt for one of the state's most-wanted fugitives.
David Kim Stanley, who under the name Michael Fenne convinced investors to hand over at least $20 million to fund Pixelon, turned himself in last Wednesday. In 1989, he pleaded guilty in Virginia to 24 counts of defrauding victims, many of them elderly parishioners at his father's church. He also pleaded guilty to 31 similar charges in Tennessee. All told, prosecutors estimate Stanley swindled his victims out of more than $1 million.
Stanley, reportedly branded "the golden-tongued salesman" by the judge who presided over his case, was sentenced to reimburse his victims and to eight years in prison. Virginia special prosecutor Gerald Gray says Stanley didn't come up with all the cash, and had been on the run since 1996 when he failed to appear for a court hearing associated with the fraud conviction. In 1998, Virginia police added him to the state's most-wanted list.
Shortly after Pixelon's bash, Fenne was ousted by investors who were infuriated by the event's extravagance. Among the entertainers hired were The Who, Kiss, the Dixie Chicks and Tony Bennett. [See "Betting on One Big Night," Nov. 15, 1999.]
There were hints that Fenne might be keeping a secret at the launch. The soft-spoken Southerner was curiously bashful. Even as he was wooing reporters for the event, he declined to discuss his background and also refused to be photographed.
Since then, the company has gone through two more CEOs and has dramatically scaled back its plans to offer a wide variety of original content. Robert Feldman, Pixelon's CTO, now gives the company a clean bill of health. "We have a certified audit without a single comment on it," Feldman says. But Feldman would not name the firm or discuss the audit. He added that San Juan Capistrano, Calif.-based Pixelon is in the process of closing a $25 million round in strategic investments and was signing up new customers.
Paul Laberge, VP of corporate development at Alliance Atlantis, a Canadian film and television production firm with $800 million in revenue last year, confirms talking to Pixelon. "We're certainly impressed with their product," he says, while declining to elaborate.Representatives from Pixelon's backer, Chicago brokerage Advanced Equities, were not available by press time to comment on the revelation that it had given $20 million to a convicted felon.
Following his departure from Pixelon, Stanley was living in San Bernardino County, Calif., according to Jimmy Widener, special agent of the Virginia state police. When police arrived at Stanley's residence a week and a half ago, he was already gone. He finally turned himself in through his attorney, Anthony Collins, who says he plans to file a motion withdrawing Stanley's 1989 guilty plea.
Wise County Circuit Court Judge J. Robert Stump ordered Stanley held without bail while he repays defrauded victims. Meanwhile, the Net has not seen the last of this strange case. The judge has taken the unusual step of providing Stanley - who still owns shares of Pixelon and some real estate - with an Internet connection, a phone and a fax machine so he can try to liquidate his assets.
