Martin Armstrong

The Sigma Scam

Speech Recognition: Ficomp’s Redirection

Un-handicapped Entrepreneur

Crosstown Moves



Corrections or additions?

These articles were published in U.S. 1 Newspaper on September 22,

1999. All rights reserved.

Princeton Economics International

Martin Armstrong, the Carnegie Center-based economic

forecaster who turned himself in earlier this month on charges of

federal securities fraud, kept a low profile before his arrest, and

— not surprisingly — has kept a low profile since. But the

lawyer representing Armstrong against the charge that he covered up

trading losses of as much as $950 million in Japanese corporate


by using money from later investors to pay off early ones, had said

that Armstrong would fight the charges. This week the first counter

punches flew.

A sister company to Armstrong’s Princeton Economics International,

which shares space in Suite 303 of 214 Carnegie Center, issued a press

release this Monday, September 20, in which it vowed to continue its

operation and in which it suggested reasons why the Japanese


and investment community would be unhappy with Armstrong and would

be out to frame him.

The related company, Princeton Economic Institute, says it is


of Armstrong’s Princeton Economics International and another Armstrong

entity, Princeton Global Management, though it does say that Armstrong

is an analyst for Princeton Economic Institute. In its September 20

statement the Princeton Economic Institute defended Armstrong as


outspoken opponent against government manipulations, interventions,

and `the billionaires’ club’."

"His director warnings about the political corruption in Japan

and the billions of dollars in hidden losses within its financial

system . .. . have put him in the direct line of fire by the Japanese

government as the man they most wish to discredit. No doubt his highly

critical stand against the accounting systems used by all governments

that falsely distort CPI, GDP, trade statistics, poverty statistics,

and taxation have not made him very popular in some circles. His


warnings about the failure of the Euro have also created a few


Mr. Armstrong has always been aware that his research has made him

a target over the years, nevertheless he has always stood his


The Princeton Economic Institute website,,

claims that the firm and Armstrong have a strong presence in Japan.

It reports that seminars offered by the Japan office "are the

most widely attended in the financial community. PEI’s clients now

include virtually 100 percent of the top 100 corporations and


in the nation. This is why the Japanese media refer to PEI as one

of the `most influential’ advisors in Japan. Our Tokyo office provides

forecasting on domestic as well as overseas markets in Japanese every

day via fax, Reuters and Bloomberg."

The website notes a July, 1998, article in the New York Times quoting

Armstrong as an authority on the Japanese economy: "Why people

would be even remotely in this environment is beyond me. Long-term,

I am very optimistic that Japan will come back and be the real


of Asia. But until things get worse, politicians there are not really

going to budge on fundamental reform."

The September 20 statement alluded to Armstrong’s economic forecasting

model and said that groups as diverse as the CIA and the Chinese


had sought information on how it worked, but that Armstrong


offering advisory services while insisting that the model remain


Armstrong’s attorney, Mark Durand of the Philadelphia-based Durand

and Durand, has stated that Armstrong "is being made a `scapegoat’

but the media prefers to print the propaganda handed directly to them

by his opponents," continued the press statement.

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Martin Armstrong

One of the more intriguing aspects of the case is the background of

Armstrong, a 49-year-old Maple Shade resident. Various published


have described his youthful passion for stamp and coin collecting

that supposedly led him to become a millionaire at the age of 15.

He later owned an art gallery and coin and stamp shop in Robbinsville

that was subsequently moved to Quaker Bridge Mall. The coin trading

apparently led to gold and silver investments and those led to the

sophisticated investments being managed at the time of his arrest.

None of the published reports mention any formal training in economics

or financial planning, or any college education at all. The press

release, while not commenting directly on any of the reports about

Armstrong’s unusual career path, suggested that Armstrong had no


for his self-education.

"At no time has Mr. Armstrong ever misrepresented his


said the statement, citing an interview with a Bloomberg reporter

two years ago. "After all," the statement continued,


Ricardo, and even Adam Smith became important contributors to


without any formal degree in the subject, relying instead upon


experience and observation."

Financial journalists and investigative reporters on at least two

continents, one can guess, will soon bring their own experience and

observation to the case of Armstrong, who was released on $5 million

bail. If convicted, the authorities noted, he could serve up to 10

years in prison and be fined twice the value of the alleged losses.

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The Sigma Scam

A four-year-old scandal involving a former Carnegie

Center-based firm, Sigma Inc. and its founder, Chuck Kohli, resurfaced

in the news just this week. A U.S. District Court judge dismissed

a racketeering lawsuit filed against Sigma’s attorneys, Stark & Stark

of Lenox Drive.

Nearly 200 investors who were burned in the Sigma scam are represented

by Hill Wallack of 202 Carnegie Center, which has filed separate civil

suits in county court. Those suits are still pending. The investors

charge that Stark & Stark attorneys became actively involved in the

management of Sigma while advising Kohli on a number of matters.

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Speech Recognition: Ficomp’s Redirection

Going to a smaller space doesn’t necessarily mean a

company is not doing well. It might just signal a redirection. That’s

what Gary Richman is doing for Ficomp Systems, which develops speech

recognition software and integrates it with network systems. He is

taking his product from the trading floor to the warehouse.

A couple of years ago, Ficomp’s hot product was speech recognition

for the Wall Street market. Traders wouldn’t have to type things into

the computer; they merely needed to talk to their computer. The system

worked fine — until it got to the trading floor. It turns out

that traders work in an environment that is noisier than an


birthday party at McDonald’s. And it is much more tense.

"We make the assumption, and so far it is a valid one, that more

people know how to talk than know how to type," says Richman.

"But we spent too much money trying to develop the trading floor

product. To make better use of the funds we have, we eliminated the

folks that were doing the testing. Now the developers do the testing

as well."

The firm moved from 15,000 square feet at Docks Corner Road to 5,000

feet at Cedar Brook Corporate Center and dropped from 26 employees

to 18.

Richman studied electrical engineering at Brooklyn Polytechnic


Class of 1965, and worked in engineering design and communications

before moving to sales and marketing. He owns the 22-year-old


but both his brother and sister work there. He and his wife of 31

years, Paula, have three grown children.

"A whole bunch of people out there are providing canned voice

recognition products, but we do voice recognition for a large


application," says Richman. "The actual product continues

to grow but the voice recognition part hasn’t grown as fast as we

thought," says Richman. "The challenge of the financial


is that it is very noisy and very chaotic. We continue to deliver

the product there, and we installed a system at Swiss American


"But now we are talking with a book retailer about doing warehouse

`picking’ and to a fast food chain about replacing the touch screens

the employees use. We think it will be a lot easier to say `Two big

Macs and a small fry’ than to punch the buttons."

Hiring and training warehouse workers is often a major headache, and

sometimes the turnover is only three months. Some of the workers may

not be good readers, and they may not be native English speakers,

so they might have difficulty following written instructions. With

the Voice Horizon System, instead of getting a computer printout,

they wear a headset, and the computer translates text to voice, saying

"Go to aisle 10, bin 12, and pick five of this book." Their

voice reply is translated, he says, to text.

Richman believes his competitors are working with voice recognition

only for telephone applications, not for the warehouse floor, the

trading floor, or the burger counter. Foreign language accents are

no problem, he says. And the program can even translate the entire

sequence from English to Spanish and back to English again.

It sounds plausible. But what happens when the Big Mac customer


her mind? The worker simply says, "Change quantity. Change


Richman admits to one instance for which the Voice Horizon System

technology won’t work. It won’t work for those who mumble. You have

to be able to talk.

— Barbara Fox

Ficomp Systems Inc., 4 Cedar Brook Drive, Suite

2, Cranbury 08516. Gary Richman, president. 609-655-5500; fax,


Home page:

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Un-handicapped Entrepreneur

David W. Schafer read about the Entrepreneurial Training

Institute (ETI) in U.S. 1 in March of this year, took the course,

did his business plan, and had his business funded to the tune of

$21,000 by the Trenton Business Assistance Corporation. Then he quit

his day job to launch a home-based business on Clover Lane, a website

where golfers can keep track of their handicaps.

Schafer’s story holds interest for would-be entrepreneurs, who can

follow in his footsteps to get funding, and for golfers, who can


their handicaps on his website

First the story of Schafer, the graduate of ETI, which is sponsored

by the New Jersey Development Authority (NJDA) for Small Businesses,

Minorities, and Women’s Enterprises. The seven-week course has been

attended by more than 350 people and is given in 10 locations around

the state, and though most sessions have begun, latecomers can still

register by attending the session on Thursday, September 23, at Human

Resource Development Institute, 200 Woolverton Avenue, Trenton, at

6 p.m. Or on Wednesday, September 22, at 6 p.m. at the Burlington

County High-Tech Incubator on Route 38 in Mt. Laurel. Cost: $225


a textbook, "Business Planning Guide" by David H. Bangs Jr.

Scholarships are available through the Mercer Business Association


Call 609-292-1890 or E-mail to for information on

the NJDA or ETI. For information on TBAC


call 609-396-8271.

All EDI students develop a business plan, and these plans are


to a "panel review" by lawyers, bankers, and accountants.

They are prime candidates to qualify for $20,000 to $100,000 loans

from the TBAC or NJDA. TBAC has a MicroLoan program that is funded

by the Small Business Administration. The NJDA’s fund is derived from

casino revenues.

The other two alumni who received funds, Schafer notes, were a retired

woman who was starting a retired persons catalog business, and a young

woman who wanted to expand her plumbing business. "What made me

less typical than others in the course was that I came from a business

background, so maybe my business plan had a little more polish to

it," says Schafer.

Schafer majored in finance and business operations at Drexel, Class

of 1986, and was doing IT consulting for other businesses. He also

had a family owned business, Dakon Industries Inc., which involved

restoring antique auto parts. "With our funding from the EDA,

I have given up the other businesses and am doing this full time,"

says Schafer. His wife, the associate director of a teachers’ pension

plan in New York, is the wage earner until the website gets going.

The TBAC will go for equipment, marketing, and working capital.

Now the golf story: This whimsically designed golf portal, using a

funky dog logo, sells products, offers links, has tips, games, and

of course those golfing jokes, but its most important product is the

database that keeps and calculates handicaps.

"On our site you type in the slope and rating of the course, and

your scores, and it spits out the handicap," says Shafer. His

formula differs from the USGA’s but produces approximately the same

results. "We say it is not a USGA handicap, but a big business

issue is whether the USGA will object." His marketing until now

is to list with search engines but he is starting a banner ad


His income will come from banner advertising, charges for links in

his own search engine, the online store, and minor charges for


or golf leagues to get their handicaps as a group. Individuals can

enroll at the website for free.

"It seems like a good system," says Bob Cioppa, who


the golf tournament for a software firm, Cylogix, on Washington Road.

He points out that clubs will track handicaps for their members, but

some do it only for their own course. "Handicaps are a reasonably

sophisticated formula. The majority of golfers don’t belong to a


golf club, and a system like this would be very helpful for them."

— Barbara Fox, 75 Clover Lane, Princeton 08540.

David W. Schafer, owner. 609-731-7137.


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Crosstown Moves

Infinite Data Structures, 993 Lenox Drive, Suite

206, Lawrenceville 08648. Robert Kelly, president. 609-219-0959;

fax, 609-219-0459. Home page:

The firm moved from 1009 Lenox Drive to a larger office at 993 Lenox

Drive. Phone and fax remain the same.

Kilbourne & Kilbourne, 83 Princeton Avenue, Suite

2A, Hopewell 08525. Kent and Tom Kilbourne. 609-466-7720.

The 25-year-old father-son mail order business has moved from 909

State Road to Hopewell.

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Breast Cancer Resource Center/YWCA Princeton, 915

Commons Way, Princeton 08540. Jane Rodney, director. 609-497-2126;

fax, 609-497-2127.

The Center has expanded into space at 916 Montgomery Commons, adding

two offices for Hispanic and African-American outreach coordinators.

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John Kaptain, 49, on September 9. Formerly the owner of

Blau Kaptain Associates at 12 Roszel Road, he was most recently a

pharmaceutical recruiter for the Cassie Group in Toms River.

Hubert George "Bill" Quackenbush, 77, on September

12. He was formerly hockey and golf coach for Princeton University

and a defenseman for the Detroit Red Wings and Boston Bruins. A


service will be Sunday, October 3, at 2 p.m. at the Lawrenceville

School Chapel.

Samuel C. Reed, 59, on September 15. Formerly chief


for Total Research, he was a self employed statistical consultant.

David P. Stecklein, 62, on September 16. He worked at

Merrill Lynch in Plainsboro as a security guard for D.B. Kelly


of Somerset.

William M. Strahle, 49, on September 18. He was a


of marketing at Rider University and chairman of the board of


of Lower Makefield Township, Pennsylvania.

Shirley C. Haines, 56, on September 18. She was the


manager of the Princeton Indoor Tennis Center.

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