The former head of Webcaster Pixelon, which managed to raise $28.5 million while he was on Virginia’s Most Wanted list, says he never told his business partners his real name.
Michael Fenne told The Post in a phone interview from the county jail in Wise, Va., that he refused to answer questions about his past or even divulge his Social Security number as he worked around the clock to build .com wealth.
Board members at Pixelon turned a blind eye as he used his technical skills to pump the company’s valuation into the tens of millions, he said.
Even after firing him after he blew $9 million on a lavish Las Vegas launch party, his colleagues were unaware he was wanted by police in Virginia and Tennessee.
Only last Friday did colleagues who had worked alongside him for three years learn he was a convicted felon. He consistently cited “privacy concerns” when asked why he refused to go on the payroll at the technology company.
Current Pixelon CEO Paul Ward told The Post that Fenne had provided a Social Security number on company forms, but no one had thought to check it.
“Who checks the details of the CEO? It was his company! He signed his D&Os,” he said, referring to directors’ and officers’ liability-insurance forms.
In the late 1980s, Fenne, 39, ran an investment scam selling securities to seniors at his father’s church. He was convicted of “obtaining money by false pretenses” and embezzlement, to the tune of $1.5 million. The judge called him a “golden-tongued salesman.”
He changed his name from David Stanley when he vanished from a work-release program in 1996, leaving without his wife, authorities say.
He eventually landed in San Juan Capistrano, where he lived in his car with a new wife – who he’d recently met in Boulder, Colo., during his cross-country car trip – while doing freelance computer work. He designed some video-streaming software, which caught the attention of well-to-do customers and local businessmen. And he formed Futurelink, which he renamed Pixelon in December 1998.
The angel investors who put in $2.5 million included CEO Ward, who was then vice chairman. Fenne was chairman and CEO.
News Raw Hyper Harrod Feed Brian Editor Hartsdale Provides – The “I just told them, ‘Don’t violate my privacy, and I’ll go on working for no pay,'” Fenne said.
His ownership/sweat equity stake amounted to 3 million shares, or 70 percent of the company. By the time Advanced Equities of Chicago drummed up $28.5 million in series A financing, Fenne was a star in San Juan Capistrano.
The launch party in October 1999 – a concert at the MGM Grand featuring The Who, Kiss and many others – cost “about $9 million.” The Webcast was plagued with connection problems, which Fenne blames on their partner, iBeam.
Fenne was fired a week later and given a $250,000 down payment on his severance. Pixelon bought back two million of his shares at 33 cents each.
“They were worth $1.75 each, but I didn’t want to make a taxable gain as I was unable to pay tax. I had no W2,” he said. His severance continues at $15,000 a month for two years.
“Michael did a good job for two years, running the company on very little money, but when the millions came rolling in, he couldn’t handle it,” Ward said.
“We had people selling content all over the place. I had to fire 70 of the 130 people. They’d duck down halls when they saw me coming.”
Ward said Pixelon now licenses its software. Investors have come up with another $30 million in a new round of financing.
Fenne now has a new satellite Internet company, Lazaron Ventures, which he runs from his cell.