**Declaration Of OSC Staff Investigator**
By: carmelbeach
09 Jan 2007, 03:46 AM EST
Msg. 11038 of 11041
(This msg. is a reply to 11010 by carmelbeach.)
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**Declaration Of OSC Staff Investigator**
The following material is just now appearing on IH in posts by Jim Bishop and Janice Shell. It is obviously an OSC document but I have not been able to locate it the OSC website and no URL has been provided. Personally I have no doubt of its authenticity given the posters integrity IMO. I suspect we will soon have a link or a fuller explanation of how it was so expeditiously obtained.
Janice posted: "It's a PDF file from an OSC document, obviously. You think I'm just making it up?"
Anyway here are excerpts already posted; I presume less juicy sections have been skipped:
I, TOM ANDERSON, an Investigator with Staff of the Ontario Securities Commission, in the City of Toronto, in the Province of Ontario, MAKE OATH AND
SAY:
Overview
1. This matter involves what appears to be an illegal distribution of securities in Ontario of an issuer in the United States, Sulja Bros. Building Supplies, Ltd. (Nevada) ("Sulja Nevada"), the price of which appears to have been artificially inflated through trading in nominee accounts in Ontario on the instruction of Petar Vucicevich ("Vucicevich") and facilitated by Andrew DeVries ("DeVries").
11. By letters dated September 29, 2006, each of PricewaterhouseCoope("PWC") and KPMG LLP ("KPMG") advised Staff of the Commission that Sulja Bros. had made misrepresentationisn in recent press releases with respect to its relationship with PWC and KPMG. Also enclosed with their correspondence to Staff was documentation in support of their objection to the representations made by Sulja Bros. Attached respectively hereto as Exhibits "8" and "9" are copies of the correspondence package received from PWC and KPMG dated September 29, 2006.
12. In their letters to Staff, PWC and KPMG advised that, in a press release dated August 11, 2006, Sulja Bros. had made untrue statements that it was negotiating with both KPMG and PWC to handle all future Securities and Exchange filings and reportings. Attached hereto as Exhibit "10" is a copy of the press release from Sulja Bros. dated August 11, 2006.
13. In a further press release dated August 23, 2006, Sulja Bros. made statements that PWC and KPMG were performing an audit for Sulja Bros. which would be completed in the near future. In their letters to Staff, PWC and KPMG advised that Sulja Bros. was not, nor had it ever been, an audit client of either firm. Attached hereto as Exhibit "11" is a copy of the press release from Sulja Bros. dated August 23, 2006.
14. In their letters to Staff, PWC and KPMG enclosed copies of correspondence to Vucicevich as the CEO of Sulja Bros. and to Marquee Asset Management LLC("Marquee"), the investor relations firm for Sulja Bros., demanding that Sulja Bros. cease and desist from making any further reference to PWC and KPMG and that Sulja Bros. correct the misrepresentation made in respect of its relationship with them.
15. I have reviewed subsequent press releases issued by Sulja Bros. and have not found any statements by Sulja Bros. retracting the representations concerning PWC and KPMG.
21. Vucicevich went on to explain that Su1ja Bros. entered into share selling arrangements, which he described as "trust" arrangements, with employees of Kore, Pranab Shah and Tracey Banumas, and members of the Sulja family, Samuel Sulja and John Sulja (collectively referred to as the "Nominees"), whereby they were paid to trade newly issued shares of Sulja Nevada on behalf of the company (pp. 26-31 of Exhibit 12).
22. From the interview, it appears that the Nominees opened brokerage accounts at TD Waterhouse and RBC Action Direct (the "Nominee Accounts") for the purpose of trading the securities of Sulja Nevada and that shares of Sulja Nevada were received by journal entry into the Nominee Accounts through the company's transfer agent (pp. 26-31 and 34 of Exhibit 12).
23. Based on Vucicevich's statements to JSIU, it appears that the shares were subsequently sold out of the Nominee Accounts at his directIon. It further appears that the proceeds of the trading went back to Sulja Bros., either directly and/or through Kore, to pay debts owed by Sulja Bros., including to the Sulja famIly for theIr interest in the company, and to expand and operate the business (pp. 6, 19-22 and 27 of Exhibit 12). VucIcevich explaIned that the Nominees had entered into trust agreements which set out the terms of this share selling arrangemenpt p. 26 - 31 of Exhibit 12).
24. Based on further statements made by Vucicevich during the interview, it appears that Vucicevich directed the trading by telling the Nominees when to trade and how many shares to trade at a given price (pp. 27-30 of Exhibit 12). Vucicevich stated in the interview that he directs the trading to keep the price at $.012 (pp. 20, 40 and 67 of Exhibit 12). He also advised that they have raised $7.8 million by trading approximately 150 million shares in this manner (pp. 20-21 and 61 of Exhibit 12).
25. Vucicevich further explained that the Canadian and U.S. operations of Kore are involved with Sulja Bros. to oversee the expansion of Sulja Bros. and that Kore U.S. "[... ] at this point, they're controlling 280 million shares" (pp. 13 and 27 of Exhibit 12).
26. Vucicevich advised that he is the directing mind of Kore's operations in Canada and that DeVries is the operating mind of Kore in the U.S. (p. 28 of Exhibit 12). Vucicevich advised that DeVries is responsible for the share structure of Sulja Bros. and "is the one that is authorized to distribute the shares" (p. 41 of Exhibit 12).
27. Vucicevich indicated in the interview that he had provided funding to Sulja Bros. "long before Sulja went public" (p. 12 of Exhibit 12) and that in accordance with the "agreement" that he signed with the Sulja family "in the beginning", Kore will be remunerated for its involvement in expanding Sulja Bros. (p. 72 of Exhibit 12).
30. I require more time to interview others involved with Sulja Bros., Kore, and possibly other entities in order to understand to understand [sic] the nature of the relationships between the Respondents and the nature and scope of the trading in Sulja Bros. securities. I estimate I will need at least six months to do that.
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