More than a year after falling off the industry radar, VoIP Inc. (VOIC.PK) executives this week got hit with accusations of cooking the books and lying to investors.
The Securities and Exchange Commission (SEC) suspended trading of VoIP Inc.’s shares – which last moved on April 9 for .0004 cents – and accused the company’s former executives of fraud. In a complaint filed in Miami, the SEC said Osvaldo Pitters and Terrell Kuykendall recorded more than $1 million in “fictitious” revenue between November 2004 and May 2005.
Government watchdogs also claim Steven Ivester, VoIP Inc.’s former CEO who resigned in October 2005, knew the company was struggling and that sales “were substantially less than its projections,” according to the filing. Ivester didn’t question the financial statements, the SEC alleges, although he did happen to sell more than 4 million shares of VoIP Inc. stock, netting $4.4 million in profit, before he stepped down.
VoIP Inc. hasn’t filed an annual report since Dec. 31, 2006. Its Web site, www.voipincorporated.com, no longer is functional. Just before collapsing last year, VoIP Inc. partnered with RazrClick, a pay-per-call marketing company. The RazrClick site does not list any officers, says the company name is “a registered trademark of” and provides just the bare essentials for contact and other information.
The SEC wants Pitters, Kuykendall and Ivester to forfeit the money they made from their alleged illegal activity, pay civil fines and be permanently barred from serving as officers or directors of any publicly held company.
When VoIP Inc. closed its doors in February 2008, it was in debt $8 million to Verizon Communications Inc. It also owned Volo Communications. Finally, Ivester is a serial entrepreneur who, according to a number of reports, is a convicted felon.