Con Air

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Last March, the U.S. Securities and Exchange Commission filed charges in federal court against Shiner, alleging that he promoted investments in a bogus California energy company that defrauded 580 investors of more than $10 million. He had also spent four months in federal prison for tax evasion.

But Petersen says rather than deny any bad intentions, Telecom Advisory Service's sales team invited him to join them. "I flew to Denver in July, and they took me out and wined and dined me."

At Morton's steakhouse in lower downtown, Petersen shared dinner and a cigar with Shiner. As he recalls, "When I said, 'I have a million bucks to invest,' [Shiner's] eyes glazed over, and he said, 'We have a good use for that; we need to get you involved.'"

Petersen says he thinks Shiner believed he was on their side; instead, he began trying to contact other investors, some of whom didn't want to believe they'd been had.

"I e-mailed some of the investors," he recalls. "I got this nasty e-mail back from Travis. He said, 'Why are you sending out this unsubstantiated stuff?'"

But others had also begun to suspect that Mile High Telecom and the other companies were frauds. Engineer Baake says he became suspicious after meeting the 58-year-old Shiner, who lives in Boca Raton and fancies black turtlenecks, dark suits and plenty of hair gel. "He wore ostentatious gold rings. I wasn't born yesterday," he says.

Baake began inquiring about how the money raised for the telecom companies was being used; he says he elicited different responses depending on whom he asked. "One said the money went into software development, and another said it went into sales, and someone else said it went to recoup money he expended personally. There were three different stories about where the money went. That was in June, and I knew we were in trouble."

In July, just after Southerland's upbeat e-mail seeking additional investments, Baake called the Colorado Public Utilities Commission and discovered that Mile High Telecom had never been properly licensed to operate in Colorado and was at risk of being shut down. He tape-recorded his conversation with the PUC staffer and took it to a meeting of investors in Morehead City.

"I played the tape for several of the investors, and their jaws dropped open," Baake says. "You could see the realization start to sink in, but even then, people were reluctant to admit they'd been scammed."

Credle was devastated.

"They steal your trust and make you feel like an idiot," says the former commercial fisherman. "This has disrupted my life and my business."

Petersen and Credle vowed not to creep away and lick their wounds. Instead, they're trying to wrest control of Mile High Telecom from Shiner and Wetherald.

"I think we can still salvage this thing," Petersen says. "A lot of customers have told us they want to stay with us. We could pick up the pieces and move forward. That's the only way the investors have any hope of recovery."

But the company's current management isn't giving up, either. Shiner claims he's being slandered. "There's a group of people out of Morehead City spearheading this attack," he says. "It's character assassination. This is a conspiracy to steal our 30 percent interest in the project."

Southerland says he's being unfairly smeared as the bad guy when he was just a salesman working on commission who genuinely thought the phone companies were a good investment.

"I had some close friends involved in this," he says. "I thought it was as good as anything I'd ever seen, at least on paper. I thought it had virtually no downside. Until Steve Petersen and Travis Credle started this, Mile High had 10,000 customers, and everybody seemed satisfied. Now I can't get any information from either side. I'm not able to participate and find out what's going on, even though I was the person who sold most of them their units."

Regardless of who has control, Mile High Telecom is in trouble with the PUC. The company never filed the proper documents to offer telephone service in the state, and the PUC now says Mile High used fraudulent behavior when interacting with it. Plus, Qwest says the company owes it more than $4 million for the use of its network and has asked the PUC for permission to discontinue service.

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Stuart Steers
Contact: Stuart Steers