Global Medical Products Holdings Inc (GMDP)

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A veteran Toronto stock player, two area associates and two U.S. lawyers have been charged with "hijacking" more than 40 defunct firms and then illegally selling their shares.

The U.S. Securities and Exchange Commission has filed allegations of civil fraud against Irwin Boock, 55, and Stanton B.J. DeFreitas, 33, of North York; Jason Wong, 32, of Markham; and two Houston lawyers for their roles in the scheme from November 2003 to June 2007.

Last year, the Ontario Securities Commission filed fraud allegations involving 13 companies and issued temporary orders against Boock, DeFreitas and Wong involving the same companies. The SEC alleges Boock, born Irwin Lawrence Krakowsky, and other defendants filed bogus paperwork so they could take control defunct publicly traded firms and then made unregistered stock offerings for the sale of more than seven billion shares.

In one case, DeFreitas allegedly sold shares in at least 30 hijacked companies that made sales of at least $2.2 million (U.S.) in "illicit proceeds," according to the commission.

The commission said Boock, who also used aliases such as John Sparrow and David Watson, directed a similar scheme in at least five hijacked firms and collected $267,625. The commission added that "each of the defendants received illicit proceeds in the form of remuneration for services, proceeds from the sale of the shell companies to buyers and/or from the sale of shares in purported private placements or into the secondary market."

For example, as part of the scheme, the commission said the hijackers including Boock took over Kaplan Industries and incorporated it under the new name of Florida-based World Hockey Association. World Hockey traded on the Nasdaq over-the-counter market in the U.S. The commission's move comes 18 months after it halted trading in several firms that originated from shell companies identified in the allegations.

The SEC, which received assistance from the RCMP and OSC, is seeking a permanent trading ban, disgorgement of profits and other civil penalties against all five.

In 2002, Boock agreed to disgorge $379,619 and pay $50,000 in penalties for a fraud involving Leah Industries Inc. But the SEC said he has never paid the fines.

http://www.thestar.com/business/article/708353--five-charged-with-stock-hijacking