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. 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. Each Final Judgment provides that the SEC may propose a plan to distribute the collected funds, subject to the Court’s approval.

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.

On January 10, 2020, the Court 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). On January 14, 2020, the Court entered an Order that appointed JND Legal Administration as the Distribution Agent (“JND” or “Distribution Agent”) for the Fair Fund to assist in overseeing the administration of the Fair Fund in coordination with SEC staff, pursuant to the terms of a Distribution Plan to be approved by the Court (“JND Appointment Order”).  (Dkt. No. 104).

On February 16, 2022, the Court approved a plan for the distribution of the Homeland Safety International Fair Fund (the “Plan”). The Plan governs the administration and distribution of the Distribution 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.  You can review and download the Plan on the Important Documents tab on this website.

The Eligible Security is set forth below.  Additional information can also be found in Attachment A on page 32 of the Distribution Plan, accessible on the Important Documents tab of this website.

Yes. In order to be considered for eligibility for a payment from the Homeland Safety International Fair Fund, you must submit a Proof of Claim Form (“Claim Form”), along with adequate supporting documentation and a completed tax certification. Your Claim Form, supporting documentation, and completed tax certification, must be sent to the Distribution Agent by First Class Mail or other delivery, as further described below: “How do I Submit a Claim”.  You can download the Claim Form from the Important Documents tab on this website.

You may submit your completed Claim Form, including tax certification and adequate supporting documentation by First Class Mail, postmarked no later than June 16, 2022, or, if not by First Class Mail, received by the Distribution Agent no later than June 16, 2022. Mailed and/or otherwise physically delivered Claim Forms should be directed to the following address:

Homeland Safety International Fair Fund
c/o JND Legal Administration
P.O. Box 91240
Seattle, WA 98111

Please do not submit original documents and please retain a copy of what you submit.  If you fail to timely submit a completed and signed Claim Form by the deadline, you may be deemed ineligible to receive a distribution payment from the Homeland Safety International Fair Fund.  The Claim Form must be accompanied by a completed tax certification and appropriate supporting documentation for each transaction listed on the Claim Form.

If you submit a Claim Form that fails to provide all required information, or is otherwise deficient, you may receive a Claim Deficiency Notice advising you of the reason(s) why the claim is deficient and an opportunity to cure such deficiencies.

If you invested the Eligible Security during the Relevant Period (identified above: “What is the Security and the Relevant Period”; are not an “Excluded Party” as defined in the Distribution Plan and below:  “Who is an ‘Excluded Party’ as Defined in the Distribution Plan”; and suffered a loss according to the Plan, you may be eligible for a distribution from the Homeland Safety International Fair Fund.

To be considered for a Distribution Payment, you must timely submit a completed and signed Claim Form along with all relevant supporting documentation and a completed tax certification.  If you believe you may be eligible for a distribution and are not an Excluded Party, you should timely submit a Claim Form.

Excluded Parties are:

Defendants, their current or former employees, affiliates, or controlled entities who served in such capacity during the Relevant Period, and their assigns, creditors, heirs, distributees, spouses, parents, and children;

Any defendant in any action brought by the SEC or any class action lawsuit related to the conduct described in the SEC’s complaint in this action or any related SEC action (or any of his or her affiliates, assigns, creditors, heirs, distributees, spouses, parents, children, or controlled entities) unless and until such defendant is found not liable in all such civil suits prior to the Filing Deadline, and proof of the finding(s) is included in such defendant’s timely filed Claim Form;

Any Person who, as of the Filing Deadline, has been the subject of criminal charges related to the violations alleged in the SEC’s complaint in this action or any related SEC action (or any of his or her affiliates, assigns, creditors, heirs, distributees, spouses, parents, children, or controlled entities) unless and until such defendant is found not guilty in all such criminal actions prior to the Filing Deadline, and proof of the finding(s) is included in such defendant’s timely filed Claim Form;

Any Person who assigned their right to obtain a recovery in the SEC’s action against Defendants; provided, however, that this provision shall not be construed to exclude those Persons who obtained such a right by gift, inheritance, devise or operation of law; and

The Distribution Agent, its employees, and those persons assisting the Distribution Agent in its role as the Distribution Agent.

Each Potentially Eligible Claimant’s Recognized Loss will be calculated in accordance with the Plan of Allocation in the Distribution Plan, Attachment A, and will be the basis for the Distribution Payments made to Eligible Claimants. You can download and review the Plan on the Important Documents tab on this website.

Additional information can be found by visiting the “Important Documents” tab visible at the top of this webpage and by contacting the Distribution Agent, toll-free, at 1-833-636-2110; emailing info@HomelandSafetyFairFund.com; or by mailing a letter to:

Homeland Safety International Fair Fund
c/o JND Legal Administration
P.O. Box 91240
Seattle, WA 98111