Individuals and entities who purchased stock in the public entity identified below during the Relevant Period and suffered a loss as a result of the conduct described in the Complaint in the above Civil Action, may be eligible for a distribution from the Homeland Safety International Fair Fund (the "Fair Fund").
||Relevant Period Start Date
||Relevant Period End Date
|Homeland Safety International, Inc. f/k/a Sniffex, Inc.
In addition to reviewing the information on this website, you should review the Distribution Plan Notice and the Distribution Plan approved by the Court, both of which you can find on the “Important Documents” tab on this website.
You should visit this website often to get the most up-to-date information on the Homeland Safety International Fair Fund.
The Civil Action
On July 15, 2008, the Securities and Exchange Commission (“SEC” or “Commission”) filed a complaint against Homeland Safety International, Inc. f/k/a Sniffex, Inc. (“Homeland Safety” or “Sniffex”) and six other defendants (collectively, the “Defendants”). The SEC alleged that from approximately October 2004 through April 2006, Defendants Paul B. Johnson (“Johnson”), Petar D. Mihaylov (“Mihaylov”) and Yuri P. Markov (“Markov”) engaged in a fraudulent promotional campaign to inflate the price and trading volume of Homeland Safety’s, then known as Sniffex, stock. Johnson, Mihaylov, Markov, and Mark B. Lindberg (“Lindberg”) along with, Swiss residents, Nicholas and Ilona Klausgaard (the “Klausgaards”), carried out the $32 million pump-and-dump fraud scheme upon unsuspecting investors by means of a sham Nevada-registered Rule 504 stock offering of Sniffex stock. During the relevant period, Mihaylov, Markov and Johnson, used more than 33 false and misleading press releases in a fraudulent promotional campaign intended to inflate the share price and volume of Sniffex stock, while selling approximately 15 million shares of Sniffex restricted stock to unsuspecting investors.
The Homeland Safety International Fair Fund
On September 19, 2012, the Court entered Final Judgment against: Mihaylov and Markov, ordering them to pay $1,550,000.00 in disgorgement to the SEC ($1,150,000.00 jointly and severally, and Mihaylov and Markov $200,000.00 each), (Dkt. No. 92); Johnson, ordering him to pay disgorgement and prejudgment interest of $903,091.00 (disgorgement of $750,000.00 and prejudgment interest of $153,091.00), with all but $50,000.00 waived by the Court. (Dkt. No. 94). On September 26, 2012, the Court entered Final Judgment against the Klausgaards, ordering them to pay a total of $29,038,219.30 (disgorgement of $12,248,250.00 and prejudgment interest of $4,541,719.30, jointly and severally, and civil penalties of $6,124,125.00 each) (Dkt. No. 98). The Klausgaards defaulted on their judgments. On or about September 2012 and 2014, pursuant to their Final Judgments, Mihaylov and Markov, and Johnson, respectively, paid a total of $1.6 million as ordered to the SEC.
On January 10, 2020, the Court established a Fair Fund pursuant to Section 308(a) of SOX, so that the $1.6 million paid along with accrued interest and earnings thereon (the “Fair Fund”) can be distributed to investors who were harmed by the Defendants’ fraudulent conduct, appointed Miller Kaplan Arase LLP (“Miller Kaplan”) as the Tax Administrator (the “Tax Administrator”), and authorized the SEC to pay all tax obligations and administrative fees and expenses of the Tax Administrator without further Court Order (the “Appointment Order”). (Dkt. No. 102).
The Fair Fund consists of the $1.6 million of disgorgement and interest paid by Mihaylov, Markov, and Johnson and is currently on deposit in an interest-bearing account at the United States Treasury’s Bureau of Fiscal Service. Any additional funds received pursuant to the Final Judgment will be added to the Fair Fund.
The Distribution Plan
On February 16, 2022, the United States District Court for the Northern District of Texas Dallas Division approved a plan for the distribution of the Homeland Safety International Fair Fund (the “Plan”). The Plan governs the administration and distribution of the Homeland Safety International Fair Fund and sets forth the method and procedures for distributing the assets of the Homeland Safety International Fair Fund to investors harmed by the conduct alleged in the Complaint.
If you purchased the security set forth above during the corresponding Relevant Period and would like to be considered for eligibility for a distribution from the Homeland Safety International Fair Fund, you must submit a completed Proof of Claim Form (“Claim Form”), including adequate supporting documentation and a completed tax certification, to the Distribution Agent no later than June 16, 2022.
How do I obtain more information?
Additional information can be found by visiting the “Important Documents” tab or the “Frequently Asked Questions” tab visible at the top of this webpage. If you have questions not answered through this website, you may contact the Distribution Agent toll-free at 1-833-636-2110, by email at info@HomelandSafetyFairFund.com, or by mail at:
Homeland Safety International Fair Fund
c/o JND Legal Administration
PO Box 91240
Seattle, WA 98111
To view the official SEC website for the Homeland Safety International Fair Find, please visit https://www.sec.gov/divisions/enforce/claims/homeland-safety-international.htm