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Hundreds of investors ponied up tens of millions of dollars for a chance to be in on the ground floor of a new technology, peddled by a Sherwood man with a checkered past, that promised to do everything from improving stealth aircraft to cleaning up nuclear waste.

More than a decade later, and with not a penny to show for their investments, some of the investors have concluded that W. Darrell Lainhart was an old-fashioned snake oil salesman — with one amazing plot twist:

They still believe, apparently with good reason, in the “world-changer” promise of the nanocarbon-producing technology owned and patented by Clean Technology International Corp.

Arkansas investors confirmed by Arkansas Business include Tom Strickland, Dr. David Wardlaw, Bill Birchard and Rex Robertson, all of Little Rock, Bill Matthews and Danny Harris of North Little Rock and Rick Andrews of Cabot. There are believed to be at least 300 and as many as 500 individual investors from Texas to Florida.

“I’m not the brightest guy in the world, but I’m not an idiot,” one of the early investors, Charles D. “Danny” Cross of Pensacola, Fla., said. “I attended most of the testing … and in my mind, there’s absolutely no question that the process works. And that’s why, if you talk to the shareholders, most of them are convinced that it works.”

Cross, 62, is a retired Marine colonel with a number of other successful businesses. If only his own money had been tied up for 11 years, he wouldn’t mind so much. But, Cross said, he was so impressed with the potential of CTIC’s “chemical decomposition and rehabilitation process” that he persuaded about 60 other people to give money to Lainhart.

“I’m guilty by exposing this fellow” to my friends, Cross said. “That’s why I’m doing what I’m doing.”

Cross, as have other investors, has complained to the Arkansas Securities Department, which has not taken action and can’t confirm even an investigation. Cross also set up a Web site to rally investors who believe much of their money — at least $25 million and possibly twice that — was actually used by Lainhart and his wife, Irene Mattie Fay Lainhart, to support an increasingly lavish lifestyle while stringing investors along with promises of an imminent initial public offering of stock.

The claims made on that Web site, CleanTechNanoShareholders.com, are the subject of a defamation lawsuit filed against Cross in a Texas federal court by CTIC, Lainhart and the man credited with developing the CTIC technology, Tony Wagner of Houston. Cross has countersued, accusing Lainhart of securities fraud and unjust enrichment.

History
Darrell Lainhart, described by investors as being in his 70s, has not responded to repeated calls and messages left during the past few weeks at various phone numbers associated with him and CTIC.

In 1986, then-U.S. Rep. Tommy Robinson told the Arkansas Gazette that he and Lainhart, a political contributor, had both been reared in the North Little Rock neighborhood of Rose City. Lainhart’s current address is 72 Shoshoni Drive in Sherwood.

Lainhart is best remembered in Arkansas business circles as the principal broker of Delta Financial Investment Corp., which was accused by the Arkansas Securities Department in 1986 of inflating its markups at the expense of bank clients. The Gazette reported that the National Association of Securities Dealers fined Lainhart and other Delta Financial brokers in September 1989, by which time Delta had been closed for almost two years.

According to another Gazette article, Delta was also “accused by the Kansas Banking Department in October 1987 of contributing to the collapse of two Kansas banks, which had sustained huge losses in the bond markets.”

A $1.55 million foreclosure on the Delta Financial building at West Markham Street and University Avenue in 1989 was one of three foreclosures filed against property owned by Darrell and Irene Lainhart in the years following the demise of Delta Financial.

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