Jan 262014


Andrea Rossi E-cat and Industrial Heat, LLC – Rossi’s Fatal Error?

Just a few comments while taking a break on Part 4 of the Thermoelectric Scam.

All of those who believe in Andrea Rossi, all of those who think Rossi is some kind of savior who will “save the world,” all of those who are disciples of Rossi, say the same thing — everyone should be looking forward — looking to the next bit of news or the results of the next test or demo. We say that is pure propaganda. THAT is exactly what keeps these types of scams alive. THAT is exactly what the scammers, like Rossi, want you to think and believe, instead of thinking for yourself. All those who only look forward in these types of scams will only see more false hope, more lies and falsehoods, more money going into the scammers pockets. What everyone should be doing is looking backward — to find out how the world of free energy and cold fusion/LENR arrived at the sad state of affairs it is currently in at this time.

The SEC and the IRS are the two U.S. Government agencies you do not want poking around if you are trying to run a successful fraud and scam. It is so well known it would be a waste of time to detail all of the different projects that have been shut down by these agencies, just use your favorite internet search engine such as StartPage or DuckDuckGo to find out more than you care to read concerning these subjects.

It was the IRS who put Al Capone in prison and it is the SEC who shut down John Rohner and Inteligentry.

The IRS and the SEC are the watchdogs over the financial creation and wealth manipulation of the wealthy and the powers-that-be in the USA. You better be very careful entering their domains. Nobody is immune from the SEC, they go after government entities, large corporations, and individuals. If fraud is involved the monetary size does not matter, it could be millions or just thousands of dollars involved.

See these SEC actions as confirmation of what we mean here. We will list just a couple. There are hundreds more.  http://www.sec.gov/litigation/litreleases.shtml

  • “Litigation Release No. 22909 / January 24, 2014
    Securities and Exchange Commission v. Palladino, et al., Civil Action No. 13-11024-DPW (United States District Court for the District of Massachusetts)
    Commonwealth of Massachusetts v. Palladino, Crim. Action Nos. 13-10207, 13-10891; Commonwealth of Massachusetts v. Viking Financial Group, Inc., Crim. Action Nos. 13-10209, 13-10894 (Suffolk Superior Court)
    Massachusetts Resident Steven Palladino Sentenced to 10-12 Years in Prison for Role in Multi-Million Dollar Ponzi Scheme
    The Securities and Exchange Commission announced today that, on January 21, 2014, a Massachusetts state court judge sentenced Massachusetts resident Steven Palladino to a prison term in a criminal action filed by the Suffolk County (Massachusetts) District Attorney.  The criminal action against Palladino and his company, Massachusetts-based Viking Financial Group, Inc., was initially filed in March 2013 and involves the same conduct alleged in a civil securities fraud action brought by the Commission in April 2013.  Suffolk Superior Court Judge Janet Sanders sentenced Palladino, of West Roxbury, Massachusetts, to serve a prison term of 10-12 years, followed by a probationary period of five years, and to pay restitution to victims, for crimes that he committed in connection with a Ponzi scheme perpetrated through Viking.  At the same hearing, Palladino pled guilty to criminal charges that included conspiracy, being an open and notorious thief, larceny, and larceny from elderly person(s).  Viking also pled guilty to related charges and was sentenced to a probationary period of five years and ordered to pay restitution to victims.  The Court set a further hearing for March 7, 2014 to determine, among other things, the amount of restitution to be paid to victims…”
  • “Litigation Release No. 22908 / January 23, 2014
    Securities and Exchange Commission v. Berton M. Hochfeld, et al, Civil Action No. 12-CV-8202 (S.D.N.Y.)
    Final Judgments Entered Against Former Hedge Fund Manager and His Company
    The Securities and Exchange Commission announced today that on January 22, 2014, the Honorable Paul G. Gardephe of the United States District Court for the Southern District of New York, entered final judgments against Berton M. Hochfeld (“Hochfeld”) and his wholly-owned entity Hochfeld Capital Management, L.L.C. (“HCM”), in SEC v. Hochfeld et al., 12-CV-8202. The SEC filed an emergency action in November 2012, charging Hochfeld and HCM with securities fraud for misappropriating assets and making material misstatements to investors in the Heppelwhite Fund L.P., a now defunct hedge fund. The Court previously entered judgments against Hochfeld and HCM that ordered, among other relief, injunctions and an asset freeze, and granted the Commission’s motion to create a Fair Fund to compensate defrauded investors. In October 2013, the Fair Fund made initial distributions, totaling more than $6 million, to 35 former Heppelwhite investors, which represented approximately 70% of each investor’s prior capital balance in the hedge fund. Pursuant to a Distribution Plan, the Fair Fund will make a second round of distributions to investors from additional funds collected, including proceeds from the sale of Hochfeld’s personal assets…”

Most fraudsters and scammers learned long ago to stay away from stocks and the SEC. That is why most all scams in the USA today are investor scams. The fraudsters have learned you can stay out of jail longer by not selling stock but selling – licenses – instead.

But when the only way you have to make money in your scam is by selling “licenses” for non-existent products sooner or later it is going to catch up with you. Some scammers last for a few years putting on demonstration after demonstration, changing the methods and devices each time. But that can only last so long before the investors start to get hot under the collar.

That is what happened to Andrea Rossi and his e-cat scam. It has been reported that two of Rossi’s European investors asked for their money back. So last year 2013 Rossi lost two of his licensees, if the rumors are true. We have NOT investigated those rumors.

Now it looks like Rossi may have found an angel in Industrial Heat, LLC. But don’t be too quick to judge. What rights exactly did Industrial Heat, LLC obtain? Their latest press release you can read HERE, is unclear. They say:

  • “Industrial Heat, LLC announced today that it has acquired the rights to Andrea Rossi’s Italian low energy nuclear reaction (LENR) technology, the Energy Catalyzer (E-Cat).”
  • “Mr. Vaughn confirmed IH acquired the intellectual property and licensing rights to Rossi’s LENR device…”
  • “Since acquiring Rossi’s technology, IH has engaged in a broad-based effort to protect it by preparing numerous patent applications related to the core technology as well as associated designs and uses.”

As everything associated with Rossi, 99% of what you read is rumors and gossip. The above statements can be interpreted in one of two ways.

  1. Industrial Heat, LLC bought out Rossi and his e-cat scam lock-stock-and-barrel, now owning 100% of all IP, all manufacturing rights, and all licensing rights. Or
  2. Industrial Heat, LLC just purchased non-exclusive rights to the IP, manufacturing, and licensing.

If Industrial Heat, LLC has purchased 100% of Rossi’s IP, including existing patents and all future patents, than why do we find Rossi’s original USPTO application is still owned by Leonardo Corporation? The date of the search was 1/26/2014, look in the bottom right corner. Click on the image to see a full size version.


For this article it makes no difference if Industrial Heat, LLC obtained exclusive or non-exclusive rights to Rossi’s e-cat scam. The seeds to the problems that might grow from a small curve in the road to a virtual mount Everest have already been planted.

It seems that the only reason Industrial Heat, LLC was created was to purchase the rights from Rossi, that Industrial Heat, LLC gave in their press release and that we quoted above. The problem is that the money to acquire the rights to Rossi’s scam was done through a “FORM D – Notice of Exempt Offering of Securities,” filed with the SEC on 2013-08-23. You can access the Form D here: http://www.sec.gov/Archives/edgar/data/1584856/000158485613000001/xslFormDX01/primary_doc.xml


The Form D said the types of Securities offered were, “Equity, Debt, and Option, Warrant or Other Right to Acquire Another Security.” But it did not say how the money was raised, or who purchased the $11,555,050 USD worth of securities.

The problems that might arise because of the way the money was raised to buy rights to Rossi’s scam could happen in many various ways. And anyone involved who spent even one dollar could file a complaint. As a matter of fact anyone who knows the details of just where and with whom the money was raised could file a complaint with the FBI and SEC, even if they did not invest any money themselves.

  • Were any false and misleading statements given to the owners of Industrial Heat, LLC and the purchasers of the $11,555,050 USD worth of securities, by Rossi, or any of his associates and partners leading up to the purchase transaction?
  • Were the owners of Industrial Heat, LLC and the purchasers of the $11,555,050 USD worth of securities, fully informed of Rossi’s criminal and controversial past (including his thermoelectric work with the DOD/DOE, and all of the failed tests with NASA etc., documented by Krivit?), and all of the many controversies concerning his past demonstrations?
  • Did all of the documents provide a clause trying to exempt Rossi and partners in case of fraud, or failure of the technology to perform as stated?
  • Did the owners of Industrial Heat, LLC have a truly independent test of Rossi’s device? In this case there are only two ways that could happen: a) Rossi gives them a device, they take it to a major lab or university to be tested, truly independent of Rossi and anyone associated with him; b) Rossi gives them written instructions, they take the written instructions to their scientists and engineers and they build one of the e-cats from scratch, without any involvement of Rossi or anyone associated with him, and have that tested as in “a” above.

What everyone must understand is that if any fraud or scamming is involved it makes no difference what any of the documents including NDAs have in them, they are all unenforceable, basically null and void.

All it will take is for one person to file a formal complaint with the FBI and/or SEC to start the investigation into this whole affair. And then the SEC might say to Andrea Rossi just like they said to John Rohner and Inteligentry, just show us one working device as proof this is not a fraud and scam and then we will go away. John Rohner can’t do it, can Andrea Rossi pull the wool over the eyes of true engineers and scientists who are looking for a fraud and scam, and not through rose colored glasses?


Gary Wright
January 26, 2014