A Vancouver investment adviser is suing a longtime accountant and and the accountant’s land developer brother — who had been banned from trading in ÎÚÑ»´«Ã½ years ago — after an investment in an Arizona land deal vanished.
Neil Pope is seeking the return of his investment funds plus damages in a lawsuit filed in ÎÚÑ»´«Ã½ Supreme Court against Richmond accountant Peter Stojak and his brother Patrick Stojak for an undisclosed sum in an investment deal that involved $8 million being diverted from the U.S. deal to unnamed investment deals overseas.
It was 2010, not long after the U.S. subprime mortgage bubble burst and led to a severe global economic crisis, when Peter Stojak approached Pope with a promise to invest in his brother’s business through which he would buy, fix up and sell residential properties in Arizona and other states, according to the claim.
Peter Stojak assured Pope that Patrick was a “successful and trustworthy businessman” with experience managing real estate deals for others, especially in Arizona.
What Pope wasn’t told was that in 2004, Patrick Stojak had sold securities on behalf of entities incorporated in the Bahamas and operating in ÎÚÑ»´«Ã½ and Arizona to British Columbians without a prospectus and by making “false and misleading” representations, the claim states. He had promised 2,500-per-cent yearly returns.
Investors lost money and the ÎÚÑ»´«Ã½ Securities Commission in 2004 banned him from trading securities in ÎÚÑ»´«Ã½ for three years and fined him $5,000.
Three years after that ban ended, Peter Stojak was telling Pope that Patrick Stojak would personally manage the investments, Peter Stojak would take care of accounting, Pope would be kept informed of the investments, and he could withdraw earnings if he wanted and he would be paid out when the properties sold, according to the claim.
The Stojaks had also shown Pope the accounting of how net sales proceeds were rolled back into his investments, leading him to believe they were being properly managed and to increase his investments from time to time, it said.
They told him they were using the profits to buy more properties to earn more profit, and Pope accepted that, the claim said.
In late 2023, Pope had concerns his U.S. investments were being used for something else without his knowledge or consent, the expenses were inflated, and the Stojaks were managing the business negligently.
He repeatedly asked them for an accounting of transactions, proceeds, expenses and where the money went, and their responses were at first incomplete and blatantly false, and when eventually supplied were “deficient, false and misleading,” the lawsuit alleges.
When confronted with his suspicions that the investment money had been used for something other than buying U.S. homes to re-sell, Peter Stojak said since 2018, $5.8 million US had been taken from the investment and sent overseas, the claim said.
The brothers replied with information that was “fluid, contradictory and confusing” and Pope suspected the explanations they had loaned the money to other businesses, made foreign deposits and potentially had the money seized by foreign governments were “blatantly false”.
Since October 2023, the Stojaks have been telling Pope he would get his money back, but the promised dates would come and go, the lawsuit said. Financial statements in December 2023 said the money was loaned to a business that Patrick Stojak half-owned, according to the lawsuit. Only the Stojaks know what happened to the money and they have acted in bad faith, negligently and in breach of their duties to Pope, the lawsuit alleged.
Pope has suffered damages and loss of reasonable expectation of profit from his investments, and the brothers used the investment offer as a “sham to perpetrate the wrongful conduct for the benefit of themselves,” the lawsuit alleges.
A message left with Pope’s lawyer wasn’t immediately returned. Peter Stojak’s phone number listed with his old accounting firm was out of service and a firm connected with his name said he no longer worked there. A message left on a social media account for Patrick Stojak wasn’t returned.
