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July 30, 2014

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Stock fraud tied to LV firm

A small Las Vegas-based company, named by federal officials as central to an international stock market manipulation ring, is denying wrongdoing.

In October, Ramoil (pronounced Ram-oil) Management Ltd. was one of four companies sued by the Securities and Exchange Commission in New York federal court. Named as co-defendants were the company's former chief executive, Rodoljub Radulovic, and Alexander Taflevich, the company's former president.

The SEC's complaint alleged Edward Durante, a New York investor, engaged in a "pump-and-dump scheme" involving Ramoil shares from December 1999 to July 2000. The SEC claims Durante pocketed $3.3 million from the scheme, and is seeking civil penalties and disgorgement of these gains.

In a statement Tuesday, Ramoil Chief Executive Gary Walters denied any knowledge of the actions, and said the company intended to join the SEC's lawsuit as a co-plaintiff.

"We had nothing to do with those allegations as present management," Walters said in the statement. "We did not know of those people or participate in any stock schemes."

"There were little old ladies fleeced out of hundreds of thousands (of dollars)," Walters said.

According to the SEC, Carib Securities, a company controlled by Durante, received more than 1 million shares of Ramoil stock in December 1999 as part of a stock promotion agreement. He then notified Trevor Koenig, a Canadian stock broker, to engage in a series of trades designed to pump up the stock's value, the SEC said.

Radulovic and Taflevic assisted the run-up by making "false public statements" about Ramoil in press releases, SEC filings and Internet postings, the SEC said.

These actions caused the stock to rise from $7.06 to $20 per share by July 2000, the SEC said. Durante then sold off 1.8 million Ramoil shares, pocketing a $3.3 million profit, according to the complaint.

Radulovic and Taflevic have left the company and could not be reached for comment, but in a financial filing last year, the company said it was "shocked and appalled at the actions of Carib Securities."

"By failing to perform and violating contract provisions, they have breached agreements entered into in good faith," the document said.

Ramoil was just one of four companies identified in the SEC complaint. According to the commission, Durante engaged in similar actions with three other companies, and grossed more than $30 million.

At the time of the alleged scheme, Ramoil said its business focused on construction and engineering contracts in the United Arab Emirates. Business ventures in that company, according to Ramoil's SEC filings, included a contract to build a Ritz-Carlton hotel and a cement plant in the UAE.

In September, however, the company announced it had sold off these assets to Wireless Communications Group -- a company whose incorporation has been revoked by the state of Nevada -- for 1 million shares of stock.

The company now says it is working on raising $500 million in a private transaction at $10 per share -- a massive premium over Ramoil's current trading level of 3 cents per share. Funds would be used to acquire four companies involved in the automotive industry -- "parts, sales and service," Walters said -- which would be combined into a single entity called Jump Automotive Experts Inc.

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