By New Times
By Connor Radnovich
By Robrt L. Pela and Amy Silverman
By Ray Stern
By Keegan Hamilton
By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
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.