Shareholders of Hawk Systems, Inc. File Civil Action Suit in an Effort to Expose Corporate Financial Scam
Defendants Accused of Embezzling Millions of Investors' and Shareholders' Money
PALM BEACH, Fla., June 4, 2013 /PRNewswire/ -- On behalf of shareholders, investor and businessman, Mark Spanakos, filed a derivative civil action suit in Palm Beach County, Florida against Hawk Systems, Inc., Hawk Biometric Technologies, Inc., and its affiliates, which include Dave Coriaty, Tony De Risi, and Ed Sebastiano, in an effort to expose what is suspected to be a massive financial scam. The plaintiff seeks restitution after shareholders' invested millions were later found to be used instead for the "personal and private gain of the Defendants."
The court document cites Hawk Systems, Inc. and its affiliates "generated approximately $22,000,000 in investment liabilities, however during that same period HAWK reported sales of only $5,575." Spanakos is cited to have encountered the misuse of such investments firsthand "when he was included on the Board of Directors and observed the other Board members using company funds to finance their lavish and extravagant lifestyles."
Hawk Systems, Inc. deemed itself a "developer of innovative fingerprint authentication technology…" "Since its inception in 2006, the Board (with the exception of Spanakos) has used HAWK as a means to defraud unsuspecting shareholders of their funds." The defendants presented shareholders with "fraudulent material representation," which was "detrimentally relied upon by the Plaintiff in his decision to invest and loan funds to HAWK SYSTEMS."
Upon suspicion, the plaintiff requested the defendants secure him with "copies of all bank statements and checks, and report the truth about the company in all SEC filings." Lacking compliance, "it wasn't until the company bank records were subpoenaed and reviewed by Spanakos that he learned of the astonishing abuse of investor and creditor funds."
In September 2009, the appointed CFO for Hawk Systems, Inc. "concluded that the financial reports filed with SEC were unreliable and that a new report should be filed with the SEC disclosing these facts." Moreover, upon submitting the company's bank records to Ronald E. Wise, financial expert and former Special Agent for the IRS Criminal Investigation Division, it was stated the "operation was consistent with what is known as a 'pump and dump' where the price of stock is manipulated so that insiders can make a profit selling the stock."
In a decision to "raise more capital," the Board (excluding Spanakos) sought out "investors and/or a public entity that could either purchase or merge with HAWK for the purposes of taking the company public," which eventually lead to the authorization of "100,000,000 shares of stock to be sold as 'penny stock'." This, in addition to "fraudulent public announcements of mergers and acquisitions with other entities," caused the Hawk Systems, Inc. stock price to rise, creating "substantial gains for those who received their stock for free or paid the 'penny stock' price."
According to the court registered document, "The end result is that HAWK sold more stock than authorized at a myriad of different prices not related to the real value of the stock." As stock for the company is "continually and wrongfully issued," shareholders continue to lose their investments. "Despite losses of over $22,000,000, the volume of HAWK stocks being publically traded have been millions of shares per week."
The Plaintiff now seeks trial by jury of over 60 Defendants on 6 counts, which include Unjust Enrichment, Fraud in the Inducement, Negligent Misrepresentation, and Conspiracy to Commit Fraud.
SOURCE Mark Spanakos
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