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Franchisors and suppliers at this year’s International Franchise Association Convention and Exhibition can breathe a sigh of relief knowing that mUrgent Corporation will not be selling its services. We can only assume that IFA blocked its past “Preferred Email Marketing Vendor from 2007 to 2010” from exhibiting after Blue MauMau’s reports on the firm’s securities fraud violations. California federal court issued an order in March 2012, resulting in a $21 million judgment by the federal government.
Owners Vladislav Walter Bugarski and his twin sons Vladimir Boris Bugarski and Aleksander Negovan Bugarski were charged by the U.S. Securities & Exchange Commission with conducting two unregistered securities offerings beginning in 2008 that raised nearly $10 million from at least 130 investors nationwide. They then misused investor money to fund more than $1.3 million in cash salary and bonuses for themselves. The family owners then established a separate “slush fund” of more than $500,000 and used investor money to pay for luxury cars and other personal expenses.
This past year, I received several telephone calls and emails from mUrgent’s investors who had lost hundreds of thousands of dollars, asking me if the government has taken any action. My phone call to the SEC in Washington DC resulted in this information: “Yes, we did get a judgment. But there has to be assets to satisfy it, and I don’t think they have collected. In theory, we have collection and distribution groups, we do have the ability to execute upon judgment.”
I asked the SEC representative if the commission could go after the fancy cars, boats and homes that the Bugarskis were buying with investor money, as stated in the district court records, and she responded. “Everybody goes to Florida to buy their expensive homes and cars and boats because they are homestead. It’s then hard to execute on their assets. It depends on state laws.”
She explained that they could refer matters of collection to the U.S. Treasury Department. “Post-judgment, discovery must be done to identify the assets and resources. But then, is it worth it to go after those assets.”
She also said people cannot be imprisoned for not paying the judgment against them.
So far, the only enforcement has been issuing a permanent injunction against mUrgent and the Bugarskis for violations of the antifraud, offering registration, and other provisions of securities laws. broker registration provisions of the federal securities laws, disgorgement, financial penalties, and an order prohibiting the Bugarskis from serving as officers or directors of any public company.
The family members entered into consent agreements with SEC last June agreeing to follow the court’s ruling. The judge issued a stern warning stating they had to stop breaking securities laws and defrauding people. The Bugarskis were barred from being associated with a broker, dealer, investment adviser, municipal advisor, transfer agent or statistical rating organization.