By New Times Staff
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Ray Stern
By New Times Staff
By Stephen Lemons
By Chris Parker
Jason Ayers sat in the VIP lounge of New York City's premier techno club, marveling at his luck.
On any other Friday night, Ayers would be working in his cramped, rented bedroom in Tempe, or maybe minding his budget at a nightclub.
But 48 hours ago, he got on a plane to New York. And now everything he wanted was free.
A luxury room with butler service at the St. Regis Hotel? Free.
Limousine rides to nightclubs? Free.
Tablets of high-quality Ecstasy? Free, if he so desired.
In the Twilo lounge, as a famous trance DJ spun nearby, Ayers smiled and glanced down at his hand. He was holding a top-shelf drink, also free.
It was as if he had some sort of Midas touch -- where suddenly everything he wanted, everything he held, was granted to him by a benevolent guardian.
The guardian was Ayers' new employer, Safari Media. And as best as Ayers could figure, his sole responsibility to Safari that weekend in return for all this generosity was to ride around in a limo with some DJs.
Safari Media was a Tucson-based multimedia company. In the last year, Safari had established a major presence in the Valley's underground dance scene (more like purchased a presence, Ayers' friends sniffed). After Ayers did some impressive lighting effects for one of its parties, Safari hired Ayers full-time to work for its Tempe music division.
At first, Ayers was a bit wary. The 27-year-old had slaved for a multimedia start-up before and wasn't eager to go back to sleeping under a desk and eating fast-food dinners over a computer keyboard.
But Safari Media, well . . . Safari Media was something else entirely.
Safari had a music division office on Baseline Road in Tempe, but Ayers never went there. Instead, he worked from home with the computer hardware the company gave him. A free computer, he was told, was pretty much standard for Safari employees. So were executive-level salaries, cell phones, shopping sprees and American Express cards. Ayers had seen co-workers pull out their corporate Amexes at grocery stores, hair stylists and department stores.
For the New York trip, Safari had flown about 20 employees to produce a show at the Sound Factory nightclub. The show, held the night before, had been a disaster. There was virtually zero promotion. The supposed headliner, famed German DJ Oliver Lieb, never got on the plane. By all employee accounts, only a few hundred clubgoers showed up for an event that cost Safari tens of thousands.
Such an embarrassing turnout and financial loss would have devastated many event promoters. But Safari's owners, a seemingly omnisexual, party-centric couple named Mark and Maryanne "Mare" Chisholm, seemed unconcerned. The very next night, the Safari party moved on to Twilo, where everybody was raving it up as if their show had been a success.
On the limo ride to Twilo, Ayers had a chance to talk with two co-workers. One was a girl from investor relations, one a girl from multimedia sales. Both were rolling on Ecstasy and gabbing away with dilated-pupil sincerity. The employee from multimedia sales gushed that she was so happy for Ayers' department, the music division. It was so great Safari was making money somehow. Safari had so little real capability for e-commerce design, she confided, that sometimes she felt like a referral service for other multimedia companies.
That was news to Ayers. And once he got to Twilo's VIP lounge, he told his friend and music division co-worker Ryan Jeffs. Together they shook their heads and laughed -- Safari kept getting curiouser and curiouser.
Even as a newcomer, Ayers knew Safari's music division wasn't even close to profitable. Most Safari shows were so lavishly overproduced, he says, "they were doomed to lose money even before we opened the doors."
So Ayers and Jeffs nodded their heads to the trance beats, thinking.
The girl hadraised an interesting question.
And the same question later blew apart Safari Media & Music with a multimillion-dollar lawsuit by the Arizona attorney general and the Arizona Corporation Commission.
The question was this: If the music division wasn't making money, and the multimedia division wasn't making money . . . then where was all this money coming from?
Chisholm residence -- Tucson -- July 22
From the street, the Chisholm home seems perfectly -- almost deliberately -- dull. It's set in a pricey but unremarkable suburban neighborhood in east Tucson. It has a modest gravel yard and a Ford Explorer in the driveway.
As the Chisholms return home from dinner and approach the house, even a ferocious thunderstorm doesn't disturb the illusion of normalcy. The sky flashes like a strobe light, imported planned-community trees topple left and right, and, still, their home seems a drab domestic harbor from a literal dark and stormy night.
Inside the house, however, is another story.
A muscled, tattooed bodyguard opens the Chisholms' front door to reveal a phantasmagoric wonderland. Primary colors splash the hallways. Painted clouds float on ceilings. Various examples of modern art mix with abandon, and white statues stare moodily as lightning flashes down through the skylights.
It looks exactly like what it is: the home of a couple of flamboyant, trance-loving, mid-30s club kids whose Web design company has raised millions in investment capital -- millions the Chisholms used to support their extravagant lifestyle.
The lawsuit by the attorney general and the Corporation Commission claims that the Chisholms raised $14 million selling unregistered securities to more than 500 investors across the country and spent $7 million on personal expenses. The company has been placed under receivership, effectively shut down, pending the outcome of the case.
On this night, after the harrowing trip home through the storm, Mark and Mare Chisholm enter their refuge and immediately do a costume change. They sort of resemble a tall Jon Cryer and a short Melanie Griffith as clothed by Studio 54. A Hollywood production company already has approached them about purchasing their story, and they have their own casting ideas.
"I just don't want to be played by Bette Midler," says Mare.
"I think Nathan Lane could capture me best," says Mark.
Mare, serious and emotionally intense, is the company CEO and handles the business decisions for Safari. Mark, playful and manic with a glittery wardrobe, is president of the Safari music division. Tonight he's wearing a tight red shirt, a choker and billowy black pants. One employee claims the Chisholms had thousands of dollars worth of clothing from Neiman Marcus delivered to their home every week.
Before an interview about Safari Media's past extravagance and current legal hardships can begin, there's an immediate crisis. Mare's 11-year-old son has discovered an enormous tarantula under a desk.
When Mark sees the hairy invader, he throws up his hands, lets out a high-pitched scream and bolts from the room. ("I married the world's most homosexual heterosexual," Mare says affectionately.) When he returns, Mark has regained some of his composure and is ready to fight. He is armed with a can of Scrubbing Bubbles bathroom cleaner, and he leaps onto the desk to attack.
"Die! Die! Die!" he screams, coating the spider with white cleansing foam.
Mare smiles, her son laughs and the bodyguard watches uneasily, seeming unsure of his duty in this sort of situation.
The whole scene -- the Chisholms and their bodyguard, and the gothic decor, and the dramatic thunderstorm outside, and the wild tarantula inside -- is so overwhelmingly theatrical you expect everyone to start doing the Time Warp.
To amp the surreality even higher, Mare asks her son what he watched on television tonight, and he says, 'America's Most Wanted.'
"Were we on it?" Mare asks ruefully.
"Yeah!" says her son, gleefully catching on. "They said you were the biggest thieves in the world!"
Mare looks pained, sends the boy off to bed and gets down to business.
She wants to explain what happened. Explain to the press, to her employees and, most of all, to Safari's investors. She wants them to understand how everything got so screwed up, and how it's not really her fault. How she and Mark had the best intentions and they wanted everybody to get rich. But somewhere along the line, bad decisions were made.
Like the Chisholms' home, Safari Media is typical construction at first glance, but holds a fascinating story inside. It's a story with raves and betrayal and drugs and excessive shopping and alleged investment fraud.
Drink up, and down the rabbit hole we go.
To begin, Mare relates a brief anecdote from when she attended Saguaro High School, one that perhaps tells more than she means it to.
She always hated high school, she says. The only class she liked was English. And she knew school policy allowed students to exchange one required course for another. So during her senior year, Mare went to a guidance counselor and asked him to switch her math class for an English course. Then she went to another counselor and did it again. And again and again. Soon Mare was spending all day in the English department.
"The [principal] called me in and said, 'Normally I would expel you, but I want to know how you did it,'" she says with a smile. "And that set the course for the way I regarded life. I didn't ever want to break any laws, but I wanted to stretch the limits, and really try to do the most I could do outside of the normal boundaries. And I think that's one reason why we're in trouble right now."
Mare met Mark at Club Congress, a bare-bones dance club in downtown Tucson's historic Congress Hotel. It was 1992, and Mare was going to community college and working for her mom's tee shirt business. Her father, Herbert Allen, was one of the founders of Up With People, a national Christian organization.
Mark was a psychology major at the University of Arizona, a self-described "spoiled brat" from a privileged upbringing. On his first day during an ill-fitting stint in the Navy, Mark says, he tried to slip the commander a $20 bill to carry his bags.
During a weekend leave, Mark went to the Congress and discovered electronica. The music was a revelation -- Mark says his upbringing was so sheltered, he had never heard funk, rap, new wave or anything like it before. Club Congress quickly became his regular weekend haunt.
Mark and Mare spotted each other on the raised, exhibitionistic dance platforms. They had both grown up in Tucson and had a mutual love for the club scene, for the way a DJ and an audience can sometimes connect and a room's energy seems to soar.
Mark proposed to Mare while wearing an exfoliating facial mask. They walked down the aisle to techno music and had their reception at a nightclub.
"When I met Mark, I was dirt poor," Mare says. "My electricity had been turned off, my rent was late, my car didn't work. And I made the decision that day to find something I could do that would make us wealthy. I just knew that day I would never [be broke] again."
In 1995, Mare started Safari Media with a graphic designer friend, Mark VanZorn. While VanZorn worked on Web design contracts with high-profile companies, Mare sought out venture capital investors and advisers through an online message board.
One respondent would play a crucial and controversial role in her company's fate. Thuc Nguyen, an investment adviser representing a group of deaf investors, told the Chisholms he could help Safari raise capital, the Chisholms say.
And he was right. The capital came rushing in.
There was the technology investment rush going on, after all. And Safari Media grew rapidly, but eschewed hiring staff members through traditional multimedia resources, such as online ads or corporate headhunters. The Chisholms hired friends, and friends of friends, young people who fit into their clique.
In 1996, VanZorn left the company. Chisholm says she bought him out after a dispute. VanZorn, who couldn't be reached for comment, was the first of several controversial Safari defectors who would later provide testimony to the Arizona Corporation Commission.
To hear Mare tell it, each was a heartbreaking story of personal betrayal. Somebody she trusted too much, who spent too much company money for personal use, who took advantage of her generosity.
While Safari had always blurred the line between work and play, staff and friends, in December 1998 the Chisholms took a major step toward aligning their company with their lifestyle. They had just returned from seeing a Florida-based DJ and friend, Andy Hughes, play an outdoor show in Tucson.
"They had him down as the headliner, but put him on this dirt mound, in this dark corner, under a tree, on a '70s sound system," Mare says. "And I thought, 'He's too good for this.'"
Mark signed Hughes and acclaimed Valley artist Markus Schulz away from Tempe-based Dream Music, effectively launching the Safari music division. The idea, Mark says, was to spend two years promoting the Safari name by sponsoring Schulz, Hughes and other Valley DJs performing at clubs, music festivals and raves (a term traditionally applied only to unauthorized warehouse parties, but now cavalierly used as a blanket description of electronic music events). Once Safari became synonymous with extravagance, the Chisholms' hopefully successful talent would begin paying back the company.
It was truly a business plan for the dot-com age -- spend now, grow soon, profit later.
"Mark and I started doing events because we knew [Schulz and Hughes] were talented and deserved more respect than what they were getting," Mare says. "It just grew from there and became this amazing wild adventure ride. We wanted to redefine the standard of Arizona's music scene."
So Safari came to the Valley, and the party began.
For a while, everybody got what they wanted.
Markus and Heather Schulz got a sponsor for their Plastik Records label and record store in Tempe ($250,000 worth of sponsorship, according to Mark Chisholm).
Java magazine got plenty of full-page ads, New Times got a co-sponsor for a series of dance events, and many young party promoters, DJs and hangers-on got dream jobs.
"Their name got out fast," says former Safari graphic designer and event promoter Randy Phillips. "There was a lot of talk going on. Suddenly, Safari was everywhere, and everybody was asking, 'Who are these people?'"
Safari aligned itself with longtime Valley party promoters GrooveTribe ("We thought it better to join them than compete with them," says Mare) and aggressively pursued the Valley's top talent.
"They didn't skimp on anything," says Jas, a GrooveTribe member. "They got all the best people."
Mare says Safari expanded to 141 Arizona employees, plus subcontractors nationwide. Many full-timers brought in new employees by hiring friends as assistants.
"It was sort of a joke; you'd just hang out and run errands," says Ayers, who was first hired as an assistant. "They liked to bring in naive young people and shower them with gifts, shopping sprees and cars. And they told you [the cost] would all come out of your paycheck, but it didn't."
In return for its generosity, Safari wanted talent and credibility. The talent came with the money, but the credibility was tougher. The underground dance scene has its own unwritten codes of conduct, rules that observers say Safari employees either did not understand or ignored.
For example: A newbie rave promoter typically establishes himself by booking lower-tier artists for his shows. Once the promoter proves to talent agents that he can consistently provide large crowds and treat artists respectfully, agents will offer their top acts.
Safari was having none of that.
"Safari wanted big names almost immediately," says Jeffs, "and had to pay out the ass to get them."
Helping import popular artists such as Moby, John Digweed and Nick Warren, Safari put together shows with nationally known talents as headliners, and Safari artists as second billing. The lighting was extraordinary. The sound was deafening yet crisp. There were oversize props, elaborate costumes and Safari's theatrical trademark: girls on stilts.
"I haven't seen somebody put that much effort into a party in a long time, truly the best set-up I've ever seen at the Icehouse," wrote a reviewer on www.azraves.org about "Resonance," a Safari event last October.
Another reviewer concurred, but lamented, "If only there would have been about 500 more people there."
Attendance was a constant problem for Safari events. Some blamed the lack of turnout on the fliers, which Mare often designed herself. Others complained that the marquees lacked diversity. Instead of a lineup of house, jungle, drum and bass, techno and other styles, Safari events were mostly trance. "Mark only wanted trance because that's what he liked," says Phillips.
And before Safari had produced a single successful show in the Valley, the company went national. Safari sponsored parties in New York, Los Angeles, Las Vegas and Miami, all the while bringing along their employees/friends, corporate Amex cards in hand.
At Zenfest in Los Angeles, the so-called "Lollapalooza of electronic music festivals," Safari's ambition resulted in an embarrassing public goof -- booking too many big names with too little promotion and not enough performance space. Mark says he told performers they did not have to take the stage because, he admits, the venues were not up to their standards. Three scheduled performers were either told they did not have to play, or refused to play, depending on which version of the story you believe.
"But Mare always said, 'If [an event] doesn't go good, we can still have a good party for ourselves,'" says Phillips.
So they did.
At Safari's Miami Winter Music Conference, the Chisholms threw a five-day gala that included a stop at the Shadow Lounge, where Mark paid for bottle after bottle of Christol and Dom Perignon so Safari employees could romp in the VIP area. Safari also paid for Playboy to supply their crew with a few playmates for promotional frolicking.
In return, playboy.com gave the event some press: "The aforementioned party monsters of Safari Media join Club Freedom and Playboy to throw an all-day pool party at the Tides Hotel . . . while playmates Nicole Lenz, Kalin Olson and Vanessa Gleason recline on deck chairs, darkening their honey tans . . ."
During the Miami conference, the company Amex bill was 164 pages long, documenting $656,000 worth of expenses for 38 employees. On Heather Schulz's account alone (of which an indeterminate portion of purchases went to Mare), there were $214,819 worth of charges. Purchases at Neiman Marcus included a $1,335 cocktail dress and a $4,640 order from Chanel.
Employees say that one luxury item, Ecstasy, was also complimentary for employees at Safari events, and that standards for public intoxication were set by the Chisholms.
Neither Mark nor Mare Chisholm denies drug use. But they do deny former employee claims that illegal drugs interfered with businesses decisions and music events.
Mark admits he's a longtime alcoholic, and Mare says she is considering filing a lawsuit against her former $5,000-per-month physician, who she claims overprescribed painkillers and other drugs that impaired her professional judgment. Her pharmaceutical gumbo included Ultram and Vicoprophen (painkillers), Flexeril (muscle relaxant), Adipex-P (appetite suppressant), Xanax and Ativan (anti-anxiety) and Prozac.
"I would have arguments with employees who got out of control, and they would say, 'Who are you to judge?' because they would make assumptions [that she or Mark was on Ecstasy], and those assumptions were often wrong," she says.
In February, Sammy "The Bull" Gravano was arrested on charges of Ecstasy distribution, and the national media exploded with stories about Phoenix raves and this "new drug," as the press frequently put it.
Most stories tried to clarify whether raves were about the music or about taking Ecstasy, not understanding that raves are about both -- but, most important, they're about experiencing a sense of community that music and Ecstasy help facilitate. When a room's energy peaks, the sensation, if not the aesthetic, is similar to the religious ecstasy of tent revival, with dancers yelling out in unison and moving with furious energy. Perhaps that's why the evangelistic techno-hymns of Moby have made him the most popular electronica artist in the country -- great raves are a sort of religious experience.
The Chisholms wanted to bring that sense of community to Phoenix on a more grandiose scale than had ever been attempted, regardless of the sudden increase in police and media scrutiny.
"Sammy the Bull's [arrest] and the mainstream press have belittled something that is beautiful," says Mare. "Before Safari, everybody blew off Phoenix. Moby blew us off, Sasha blew us off -- Phoenix was considered a hot pit where [the artists] wouldn't get the respect they deserved."
Last spring, Jas considered moving back home to Vancouver. To persuade him to stay, the Chisholms made him an irresistible offer: They would purchase Pompeii for a reported $800,000, appoint Jas as creative director and buy him a house in Tempe where he could play host for visiting DJs.
The club wasn't a Safari Media purchase, they frequently insisted, but there was little doubt who was behind the sale -- the new owners were all Safari employees. The club was renamed Freedom.
Armed with the best electronica club in the Valley, a handful of talented artists and a growing familiarity with event production, Safari was suddenly an unavoidable force in Arizona's underground music scene. There was even a feeble effort to crack down on workless work weeks -- one e-mail sent to the music division insisted that employees should work at the Tempe office at least three days per week. And Mark Chisholm was planning to take Safari Music global, with a hugely ambitious series of parties in Ibiza, Spain.
Some Safari staffers, though, were uneasy.
As rumors of a state investigation of Safari intensified, justifying company spending was becoming more difficult.
The usual assumption was that the other department was making money, or that the Chisholms were privately wealthy, or that, well, being 22 years old and driving a free car and receiving lavish perks was what working at a new media company was supposed to be like. After all, it was all over the news: This was the marvelous new model of American business, and they were riding the wave.
But then it finally happened.
The Raid -- The Moon, Tucson -- June 30
It was Friday, and Randy Phillips was at the Safari research office with about eight other employees. Everybody called the office The Moon. It's a cush setup, Phillips says. There are several computer work stations, a huge projection TV and a surround-sound stereo that was playing a house mix that day, Phillips recalls.
"So I get this phone call at one o'clock from somebody saying, 'Randy, if you need any help, we're here,'" he says. "I didn't have a clue what the hell they were talking about."
Still, the call worried him. Phillips often worked at the Chisholms' home office, and he had overheard plenty to make him nervous. For months, he had been telling co-workers, "Something's happening. Something bad is going to happen to Safari." He just didn't know when, or what.
A couple more hours slid by. Just when Phillips began to relax, there was a knock at the door.
"The door opens and there's a police officer, and this big fat guy -- the receiver -- and a super-skinny guy. When they came into the room, the whole air just stopped."
The court-appointed receiver, Lawrence Warfield, asked who was in charge.
"Well, the person in charge was deaf," continues Phillips, "so it was pretty humorous watching them try to talk. Meanwhile, we're all sending ICQs [instant Internet messaging] back and forth to each other, like, 'What are we supposed to be doing?' 'Do we have a job?' 'Are we going to get our paycheck?'
"The receiver sat us down and told us, 'Safari is being put under receivership.' He said: 'I am your boss. The people who you thought were your management are no longer your management. You can come back on the fifth of July to get personal items.'"
When they were allowed to stand up, Phillips shut off the music.
Caelum -- Ibiza, Spain -- July 8
Employees urged the Chisholms to cancel their Ibiza plans. The show would be extraordinarily expensive and, besides, the Chisholms were desperately needed at home. Safari bank accounts were frozen, employees weren't getting their paychecks and the receiver had changed the locks at their Tucson office.
"But Mark and Mare didn't want to hear about it," says Phillips. "You would try to talk to them about the problems, and they would get mad."
So the Chisholms went to Spain, taking their staff along for one final trip to wonderland.
"We had planned the Ibiza events for more than eight months," Mare explains. "And we knew that Ibiza was critical for the future of Safari Music."
Ibiza is sometimes called "Isle of Dance" or "Ecstasy Island." It's the premier resort destination for vacationing European electronica fans. During the summer, the top UK promoters host parties in Ibiza clubs and on the golden-sand beaches, each trying to reach new heights of hedonism and spectacle. Ibiza is, as the island's club-scene magazine Ministry of Sound put it, perhaps the only place on earth where stilt-walking dwarfs and fire-breathing sex performers are considered commonplace.
American promoters have historically tried and failed to compete in Ibiza. And yet Safari was not only attempting a party, but a summerlong series of parties. An Ibiza nightlife gossip columnist wrote that Safari was "the first ever American promoter to attempt a regular event on the island."
The Ibiza plans represented the zenith of Safari hubris, a series of shows in the toughest market by a company that had yet to host a successful event at the Icehouse -- let alone anywhere else.
Safari always called their Schulz and Hughes tours "Caelum." "Caelum" is Latin for "heaven," and the Ibiza shows were dubbed "Caelum USA."
Soon after settling into their villas, Safari employees started hearing distressing news over their cell phones. Apparently, authorities knew Safari's leadership was out of the country. The Chisholms' home was swept for valuables and financial documents. The Safari Web site was taken off-line. A press release about the Safari lawsuit was sent to the media.
Among the staff there was "nonstop yelling, crying, fighting," says Phillips.
"I started lashing out at everybody, I was so panicked," says Mare. "Mark and Markus were screaming at each other. There were lots of tears and frustration."
By the night of the Caelum USA opening party, the show seemed like an afterthought. It was all set at club El Divino with Armand Van Helden headlining and American flags hanging from the ceiling, but it was becoming increasingly obvious that the opening party was to be Safari's first and last Ibiza show.
The night was a pivotal moment, with the lowest possible expectations. But for a couple as theatrical as the Chisholms, irony is inevitable.
The Caelum USA opening party was by all employee accounts a raging success.
El Divino was jammed, clubgoers were turned away at the door and even finicky locals were impressed.
"It was a total hit," says Phillips. "It was the first Safari event to be completely packed."
Caelum was here. Only this time, it was only for the guests -- not the hosts. Safari employees worried about their future, the celebration seeming muted somehow. Mark bought bottle after bottle of Dom Perignon, and passed out face-first on the sidewalk.
Birthday party -- Chuck E. Cheese's, Tucson -- August 10
Mare Chisholm sits in a multicolored booth under Chuck E. Cheese's glaring fluorescent lighting, looking miserable.
While her son celebrates his birthday, playing air hockey and video games, she has to answer questions about investment fraud and drug abuse. The stress shows on Chisholm's face. She looks different from the photos of Safari parties -- older and tired.
In the past month, the Chisholms' legal and personal problems have grown increasingly dire. A judge denied the Chisholms' request for access to their frozen bank account to pay for legal defense.
"The funny thing," Mark says, looking to the upside, "is that after all this controversy, if we threw a party now, everybody would want to go."
Well, everybody except some of their former employees. Since Safari was put under receivership, several have left the state, suddenly unable to afford their cars and homes. Others have been asked to return vehicles, company loans and gifts to the court-appointed receiver. Most no longer speak to the Chisholms.
Mare's personal Web page at www.primenet.com/~mare, once a tribute to her friends and the music scene, is now a collection of soured memories. Mark and Mare are estranged even from their closest companions -- Markus and Heather Schulz.
"It's a tough situation," says Jas, whose nightclub has been foreclosed and returned to the original owners. "They obviously helped make my dream come true of opening a club. They had good intentions, and they never did anything but good things for me, but if the state tells me to [not speak to them], I can't go against that. I'm just trying to keep my head above water now."
The Arizona attorney general's lawsuit claims that Safari Media raised $14 million from more than 500 investors from February 1997 to December 1999. The lawsuit also says the Chisholms used $7 million of those funds to purchase homes, furniture, vehicles, art, jewelry and clothing for themselves and their employees. Even after a court-issued cease-and-desist order in November, Safari allegedly continued to sell $1.8 million in stock to investors over the Internet. The lawsuit says Safari's actions constitute violation of the State Consumer Fraud Act, Arizona Racketeering Act and Arizona Securities Act and asks the Chisholms to pay triple damages to those injured by the fraud, as well as civil penalties and the cost of prosecution. The Attorney General's Office will not confirm or deny whether there is a criminal investigation.
"Other than $7,000 in [music event] ticket sales, we have not been able to identify any other income coming into [Safari] other than investor dollars," says Assistant Attorney General Moira McCarthy. "In other words, we have not been able find any discernible product or service."
According to the combined court filings against Safari and shareholder interviews, most investors heard about the company through the Safari Web site, Internet advertising and word of mouth. The Chisholms and Safari's vice president, Thuc Nguyen, allegedly told potential investors that Safari was a private, tax-exempt company operating under a federal exemption from registration with the Securities and Exchange Commission -- which was not true.
Securities were offered at anywhere from $1 to $7.50 per share, the rate sometimes changing throughout the day. Potential investors say they were assured that an increase in stock value was "guaranteed," along with specific estimates of a future liquidation value. Such reassurances included boasts that Safari revenues had increased 266 percent since 1998, and that Safari had obtained a seven-figure contract with the state of Washington, the lawsuits say. Investigators say both claims are false.
Investor updates often offered tantalizing promises for shareholders willing to keep their stock, even higher benefits for those willing to purchase more stock, and meager returns if they chose to liquidate.
Safari's most elaborate and profitable claim was that the company was about to merge with Toshiba. Actions filed against Safari say that investors were told the Japanese technology giant would either shortly acquire Safari or pay a $10 million fee to Safari investors for postponing the merger. Safari even asked shareholders to vote on whether to go forward with the merger, and began offering Safari stock options for when their "spin-off company" went public.
Mare now admits that the Toshiba merger "probably never existed."
One shareholder, 56-year-old Eve Murphy of Denver, heard about Safari through a friends-and-family investment circle. Her group bought $350,000 worth of Safari stock, $250,000 of which was from Murphy's retirement fund.
"Oh, it sounded like a smoking good deal, that this company was in the throes of having a major merger with [Toshiba], and if you got in under the wire you could make a lot of money," she said. "This thing was laid out so well; whoever dreamt this up should get an Academy Award."
When the proposed Toshiba merger date came and went, Murphy flew to Tucson with some fellow shareholders and demanded that Mare produce Safari's bookkeeping. Murphy says the documents she viewed were heartbreaking.
"The salaries that employees were being paid were absolutely outrageous. I was in tears," Murphy says. "And when I started asking questions, we were basically thrown out of the office."
Another investor, Sunny Sun-Sang Lee of Bellevue, Washington, says he and his family put more than $3 million into Safari, and they are now suing Safari in federal court. Lee, who is hearing impaired, found out about Safari through Thuc Nguyen's deaf investment group. Lee's lawsuit states that Safari is a Ponzi scheme (in which a few early investors are paid off using the contributions of recent investors to maintain the appearance of profitability) and accuses the company of targeting the deaf community.
Mare's response to all these charges is characteristically passionate and seemingly sincere: Yes, she spent quite a bit of money. But she did not know that what she was doing was illegal. She trusted the wrong people, and they took advantage of her generosity and naiveté.
Nguyen, she says, is responsible for the bulk of her company's hardships. Mare says Nguyen told her Safari was permitted to sell shares, tricked her into believing the Toshiba merger was real, stole money from shareholders and was the primary contact for many investors.
"We had people that we believed were licensed and accredited financial advisers and venture capitalists that were doing our fund raising for us," Mare says. "The AG's office is saying we directly solicited people, but that's something we are absolutely ironclad about -- we would never, ever, ever have accepted a cold call. We would never do boiler-room calls."
Of her claims about Nguyen, one is easily verifiable: Nguyen was the primary contact person for many investors. He is the only Safari employee aside from the Chisholms to be named as a co-defendant in the Corporation Commission's cease-and-desist order and in Lee's lawsuit, and both documents say Nguyen made false promises to potential investors.
Nguyen's attorney says his client has no comment.
"The one thing I will stand behind is that I never had criminal intent," Mare says. "I think ultimately I'm going to be on trial for my ignorance."
When asked about Nguyen, a representative of the Arizona Corporation Commission noted that the "possibility of additional action [against Nguyen] exists," while the Attorney General's Office says it is confident in its exclusive focus on the Chisholms. Both offices find Mare's claim that she was an innocent puppet to Nguyen's Machiavellian mastermind somewhat amusing.
The biggest problem with the Chisholms' defense is that the state of Washington served Safari Media with its first cease-and-desist order for illegally selling securities way back in 1997 -- and it named both Nguyen and Mare Chisholm ("Thuc seemed oblivious. I believed [somebody else] was behind the complaint, and took Thuc's word for it," Mare says). She also stresses such an extensive history of suffering from personal betrayal, with so many thieving former friends and associates out for revenge ("I have NO idea why some people seem so hell-bent on destroying us," she wrote to the Corporation Commission), that at some point, a sort of plausibility critical mass is reached.
Sitting in Chuck E. Cheese's, Mare Chisholm stares intently across the table. She wants so desperately for you to believe her. And you want to believe her right back. Just like so many investors, employees and friends once did.
"I'm not going to feel comfortable until I see those people paid back," she says. "I made a promise to them, and I'm going to keep it. We will prove in court that this was not our fault."
A few miles away, downtown at Club Congress, a party is just getting started.
The club has added a larger dance floor and air conditioning since the Chisholms met here eight years ago. In many ways, though, it is still the same bare-bones club. The cover is cheap, and the decorations are nearly nonexistent. There are no girls on stilts or elaborate laser shows.
But that intangible energy is still here.
Moby says "Move" and everybody moves; Moby says "Go" and everybody jumps. Young couples meet and flirt and dance, some wishing for an experience more grandiose, something more like caelum.
"Working at Safari was like that film The Matrix," says Randy Phillips. "You could either take the red pill or the blue pill. One pill takes you on this journey, and with the other you would wake up and nothing had ever happened.
"People at Safari took the red pill for an Alice in Wonderland experience. We entered a total fantasyland with all these vibrant colors.
"But it wasn't real. None of it was real."
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