[SLJB]: from famed investigative journalist Gary Rennie of the Windsor Star - "Sulja probe leads to new allegations "
Sulja probe leads to new allegations
Gary Rennie, Windsor Star
Published: Friday, June 20, 2008
HARROW - After an 18-month investigation, the Ontario Securities Commission announced new allegations Thursday and said more individuals were involved in a local "pump and dump" stock scheme that netted at least $10.4 million. The OSC is seeking to recover the money, as well as levy fines of up to $1 million against the individuals involved and ban them from acting as officers of public companies in the future. A parallel RCMP Integrated Market Enforcement Team investigation against Sulja Bros. Building Supplies Ltd. is continuing.
Windsor lawyer Dan Scott, who represents three of the defendants, including Petar Vucicevich of Colchester, said Thursday he's expecting a trial to start soon.
"Petar is very anxious to start dealing with this," Scott said.
Scott said the RCMP has been in touch with him, but he doesn't know where that investigation is heading.
RCMP Sgt. Marc LaPorte of Toronto said the force doesn't comment on investigations.
An OSC hearing is scheduled for Monday in Toronto, but Scott expects it to be adjourned.
The OSC allegations name Sulja Bros., Vucicevich, who was a former CEO of the company, and a Windsor-based company called Kore International Management Inc., which was run by Vucicevich.
The OSC also alleges a U.S.-based Kore company with ties to Texas resident Andrew DeVries had a role in what it described as a "pump and dump scheme."
Throughout 2006, the OSC alleges numerous false news releases touting deals worth hundreds of millions of dollars were issued on behalf of Sulja Bros., which trades in electronic penny stock markets as SLJB.
At the same time, the OSC says the stock was being sold to investors around the world using brokerage accounts in the names of Kore employees.
The OSC says Vucicevich's Kore company got $3 million from stock sales in 2006, plus an additional US$2.7 million and then $4.7 million from the U.S. Kore company during the end of 2006 and early 2007.
Thursday's allegations add as defendants Steve Sulja, his brother Sam and Kore employees Tracey Banumas of Harrow and Pranab Shah of Windsor.
In an interview last September, Steve Sulja said his family's Harrow lumberyard sold its accounts receivable and payable, but not land or buildings, to Vucicevich in what he called a "handshake deal."
He said family members only got a fraction of what they were promised by Vucicevich.
Sulja, who also became CEO of the Nevada-incorporated Sulja company, said he was duped into believing big overseas deals were being pulled off by Vucicevich.
The lumberyard, a 20-year business started up by his father John Sulja, closed in mid-2007.
The OSC says the history of the stock scheme traces back to a Nevada-incorporated company named Loftworks, which was renovating a Detroit building in 2005 for condominium sales. Loftworks, which was trading at the time in the penny stock markets, changed its name to Loftwerks and finally to Sulja Bros. Building Supplies on July 21, 2006.
Investors were led to believe in press releases and on Internet message boards that the Nevada company had some connection to the Sulja family business in Ontario as well as other companies run by Vucicevich.
The Loftwerks building project in Detroit was never completed. A U.S. company, Progressive Mortgage Inc., still has a $1.3-million judgment in Wayne County, Mich., against Loftwerks and its CEO Dennis Ammerman, and a separate $1.75-million judgment against Ammerman's former wife.
Progressive's John Chandler said the judgments haven't been paid. He's still looking for Ammerman, but Ammerman's ex-wife, who still lives in Michigan, filed for bankruptcy.
Outside of Ontario and Alberta, which both have trading bans, SLJB stock can still be purchased for about a tenth of a cent a share. That's far from its peak price of just over 21 cents a share in 2006.
Although the company's history has been well publicized, some posters on stock message boards still believe fabulous deals are being kept secret until the OSC issues a long-awaited apology.
© The Windsor Star 2008