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Investigate, then invest

William P. Barrett
This article is more than 10 years old.

One of the most amazing moneymaking opportunities you have ever seen," enthused Antares Corp., a vending machine outfit in Culver City, Calif. The letter came to my home at the right time: This magazine's editor had just asked me to find an investment pitch to investigate. Why not the purchase of vending machines?

I called Antares Corp.'s toll-free number and signed up for a local presentation. Two days later more material arrived, with lots of puffery and a few details: Antares Corp. was using the brand name Natural Choice USA, and its president was one Dana M. Bashor.

There was a time when a salesman of miracle products could travel from city to city, not worrying much about his reputation. Nowadays that's not so easy. You can be tarred and feathered on the World Wide Web.

My first stop was (, a service that checks county and federal courthouses nationwide for tax liens, judgments, bankruptcies and lawsuits. Its fee: just $1.50 per name and category searched.

KnowX turned up about half a dozen lawsuits since 1990 against Bashor or Antares Corp., mainly in California, as well as a $46,175 tax lien placed by the California State Franchise Tax Board in 1997. For another $15, KnowX provided a fuller description, including the names of parties, filing dates, names of courts and docket numbers (beware of similar names and gaps in database coverage).

After finding the number of my state's securities department, at, I called and requested a check of names through the Central Registration Depository. That nationwide database, not carried on the Web, includes disciplinary actions in the securities field. That search showed that in 1991 Connecticut had brought a cease-and-desist action against Orion Products Corp.-Dana Bashor, president-for selling without a filing. Orion, an affiliate of Antares, settled by paying $2,500.

I then went to a library that offers terminals for browsing Dow Jones Interactive, Lexis-Nexis and Dialog-media databases that contain the full text or abstracts of thousands of newspapers, magazines and television news shows going back ten years or more. I downloaded articles onto a diskette and reviewed them at home.

Now Antares began to come into focus. It turned out Bashor, Antares and Orion Products had paid a $1 million fine to the Federal Trade Commission in 1996. Among the civil charges: misrepresenting potential earnings and the ease of finding locations for vending machines. (It's all summarized on the FTC's Web site, The defendants admitted no wrongdoing but agreed to reforms. An Antares press release called the FTCcharges "unwarranted . . . unfair and unnecessary."

A 1996 Kansas City Star story detailed a fraud lawsuit against Antares (a suit KnowX had missed). "Antares settled it pretty quickly," plaintiff attorney Michael Fatall told me. A call to the 95-cent-a-minute Better Business Bureau hotline (900-225-5222) revealed that Antares had satisfactorily settled all 26 complaints against it (in response, Antares called the number of complaints insignificant).

I then used Web search engines to track down vending machine trade organizations, which mailed me literature and trade publications. After ordering back copies and a book on operating vending machines, I was prepared for the Antares presentation.

On the appointed day I went to a hotel ballroom and examined the company's compact vending machine. It was built like a refrigerator, with a door that dispensed snacks and an inner compartment that held cans and bottles.

A big-screen video showed a trim, bearded, confident Bashor talking about how he had designed the machine. Even that claim could be reviewed easily. The IBM Intellectual Property all patents since 1974, but makes no mention of Bashor, Orion Products or Antares Corp.

Antares salespeople handed out a disclosure form mentioning the FTC action but not the specific allegations or the $1 million fine. They also gave prices for the machines. The minimum purchase-three machines-would cost $19,137, less a $1,150 discount. Total: $17,987, or $6,000 a machine.

Fair price? Back on the Web, I located independent dealers selling comparable machines-even made by Antares' own private-label manufacturer, Edina Technical Products-for around $2,500. That was less than half the Antares price. I called some dealers, rivals of Antares, who suggested that the company was selling overpriced merchandise to people who didn't comparison-shop.

On a vending machine site (, I found people trying to sell Antares machines-often less than a year old-for as little as $1,500. A 75% haircut in a year? It didn't make the Antares machine look like a good long-term investment.

I wanted to talk to some buyers other than Antares' handpicked sources, who were listed in easy-to-read Antares' literature. That FTC settlement required Antares to provide five references in my county of residence; they were listed in the middle of an all-capital, hard-to-read block of type.

No wonder Antares had buried the local contacts. "They make it sound like you could make $2,000 a week," said the first I called, a retired teacher who figured he had earned $1.10 an hour-not counting the opportunity cost of his investment. A second had no complaints about his investment but noted he had bought extra machines very cheaply, second hand. "I'm reaping the benefit of other people's failures," he acknowledged.

Disclosure statements for so-called business-opportunity firms vary among states. I sent about $10 to each of several different state regulators for Antares filings. (The addresses are listed at Washington state requires both balance sheets and income statements, and they were quite revealing. On only $3,300 in total capital, Antares paid shareholders-Bashor is probably the only one-a $400,000 dividend in late 1998. Clearly, selling machines was a far more "amazing moneymaking" opportunity than buying them.

Seeking comment, FORBES sent Antares written lists of questions and the sourcing for underlying facts. The company declined to respond specifically to most queries but did say the price included aftersale support and service.

As FORBES has long preached, investigate before investing. It's never been easier.

