SEC v. Homeland Safety International, Inc. F/K/A Sniffex, Inc., et al.
Case No. 08-cv-1187 (N.D. Tex.)
On July 15, 2008, the Commission filed a complaint against Homeland Safety International, Inc. f/k/a Sniffex, Inc., Mark B. Lindberg (“Lindberg”), Petar D. Mihaylov (“Mihaylov”), Yuri P. Markov (“Markov”), Paul B. Johnson (“Johnson”), Nicholas V. Klausgaard, and Ilona V. Klausgaard (collectively, the “Defendants”). The Commission alleged, from October 2004 through April 2006, Mihaylov and Markov acquired control of public company Homeland Safety International, Inc. – then known as Sniffex, Inc. (“Sniffex”)-and carried out a $32 million pump-and-dump fraud scheme in concert with the other Defendants. See the Complaint.
On August 15, 2008 and September 19, 2012, the Court entered final judgments against Lindberg and Homeland Safety International, respectively. No monetary sanctions were imposed. See Lindberg’s Final Judgment and Homeland Safety International’s Final Judgment.
On September 19, 2012, the Court entered a final judgment against Johnson ordering him to pay disgorgement of $750,000 and prejudgment interest of $153,091. Based on Johnson’s sworn financial affidavit, the Court did not impose a civil penalty and waived all but $50,000 of the disgorgement and prejudgment interest. See Johnson’s Final Judgment.
On September 19, 2012, the Court entered a final judgment against Mihaylov and Markov ordering them to pay $1,550,000 in disgorgement. See Mihaylov and Markov’s Final Judgment.
On September 26, 2012, the Court entered a final judgment against Nicholas and Ilona Klausgaard ordering them to jointly pay $12,248,250 in disgorgement and $4,541,719.30 in prejudgment interest, and each to pay a $6,124,125 civil penalty. See the Klausgaards’ Final Judgment.
Mihaylov, Markov, and Johnson collectively have paid $1.6 million towards their judgments.
On January 10, 2020, the Court entered an order establishing a Fair Fund for the monies paid by the Defendants, and appointing Miller Kaplan Arase LLP as Tax Administrator to handle the tax reporting obligations of the Fair Fund. See the Court’s Order.
On January 14, 2020, the Court appointed JND Legal Administration as the Distribution Agent of the Fair Fund to oversee the administration and distribution of the Fair Fund to harmed investors. See the Court’s Order.
For more information, please contact the Commission:
Office of Distributions