Wednesday, February 1, 2012

Illume's Ross to help straighten out new parent firm

By Rodney H. Brown

(Updated Friday, Feb. 3, to correct spelling of Keith St. Clair's travel company -Ed.)

Illume Software Inc.’s CEO Dan Ross repeatedly turned down opportunities to call himself a “white knight” in the purchase deal announced Tuesday in which Florida firm Options Media Group Holdings Inc. will buy the Needham company. But with him being named the CEO of Options Media after the deal closes, Ross is clearly another step in righting a company that has had a troubled past.

Options Media’s current CEO Scott Frohman was also the chairman of Money4Gold, the company that ran the money4gold.com website that advertised for people to send in their gold for an unspecified payment. That website has been shut down, following a ruling in the UK that told it to clean up its act in the way it supposedly allowed people to turn down offers of money for their gold.

Frohman, who joined Options Media as CEO in 2008 when his company 1 Touch Marketing was purchased, is also a director of Upstream Worldwide Inc. another Florida company that runs on the same model as Money4Gold, but with any kind of electronics or consumer goods through the website uSell.com. While the company has an “A-” rating from the local Better Business Bureau, it is also well represented on a number of consumer complaints websites.

Options Media had also been placed on a number of lists of spamming companies in the past. In the company’s 10-Q SEC filing from November, however, Options Media stated that, while it started business as an “Internet marketing company providing e-mail services” and SMS services to corporate clients, it had discontinued that line of the business in early 2011.

Instead of e-mail services, Options Media in May 2011 acquired the anti-texting product PhoneGuard when it bought the company that created it, Cellular Spyware Inc., founded by Anthony Sasso. When it came out that same month that Sasso is a convicted felon for being part of a conspiracy to sell stolen cars on used car lots by using counterfeit vehicle identification numbers, Options Media let him go immediately, Ross said – a statement backed up by online reports. In its 10-Q filing, Options Media said it paid $1.125 million for the PhoneGuard software. It also said in that filing that in July 2011 it entered into a Settlement and Release Agreement with Sasso that gives him locked up shares in exchange for such things as waiving any potential severance.

Ross said that he was aware of all of the issues surrounding Options Media, and still felt that being able to offer Illume’s iZUP anti-texting software to enterprise customers along with PhoneGuard to consumers was worth taking on the challenge.

“We did a considerable amount of due diligence,” he said. “There are certainly things that I will want to deal with as CEO of the company which will happen shortly. We like the fundamentals of the product combination being a comprehensive solution to the marketplace. And I have to say that the new chairman of Options Media, when he came in last May, has already made some needed adjustments.”

That new chairman is Keith St. Clair, a well-known business veteran in the Florida market. In 1999, he founded and served as chairman and CEO of TraveLeaders, a travel distribution company. He was named Florida Entrepreneur of the Year Award and inducted into its Hall of Fame in 2004, and was responsible for putting together the first presenting sponsorship for the NBA’s Miami Heat. Interestingly, Dwight Howard of the Orlando Magic bought $100,000 worth of Options Media stock in early January.

Joining Ross on the management team of Illume’s new parent Options Media - which will be headquartered in Needham, not Florida - will be Illume executives vice president of sales Daniel Maier and vice president of engineering Oren Kagan.

“We will make strong, sober decisions to allow ourselves to move forward in a positive way,” Ross said. “There’s no question that, as with all due diligence, there are some challenges that I have to deal with, and the team has to deal with. I have a lot of confidence in the products and a lot of confidence in the team.”

 

Editor's note: Dwight Howard plays for the Orlando Magic. A previous version of this article misidentified the NBA team.