WILMINGTON, Del. (CN) – Directors of Deep Marine Technologies looted the company of millions and gave “at least $75,000” to the wife of U.S. Sen. Norm Coleman, R-Minn., “for no legitimate business purpose,” shareholders say in a class action in Chancery Court. They claim DMT director Nasser Kazeminy told a “Confidential Source: ‘We have to get some money to Senator Coleman’ because the Senator ‘needs the money.'”
Shareholders claim Kazeminy “disguised” his improper payment to Sen. Coleman’s wife in 2007 and also made “outright gifts of DMT corporate cash” to a Kazeminy relative.
They say DMT’s other “controlling shareholder,” Otto Candies, looted the company of millions through phony sales and leasing deals.
“Plaintiffs have been informed by a Confidential Source that in the spring of 2007, defendant Kazeminy instructed DMT’s then Chief Financial Officer, B.J. Thomas, and Chief Executive Officer, Defendant [Paul] McKim, to have DMT send quarterly payments of $25,000 to Senator Norman Coleman of Minnesota,” the complaint states. “Mr. Kazeminy stated to the Confidential Source: ‘We have to get some money to Senator Coleman’ because the Senator ‘needs the money.'”
Coleman is facing a recount in his race against Democrat Al Franken. Coleman leads by 477 votes of 2.9 million, automatically triggering a recount in Minnesota, which recounts votes in elections decided by 0.5 percent or less. The margin in the Tuesday Senate race is 0.016 percent.
“News articles have reported that defendant Kazeminy is a large donor to Senator Coleman’s campaign and that the two men have vacationed together at Kazeminy’s expense using Kazeminy’s private plane in 2004 and 2005,” the Chancery Court complaint states. “News articles have reported that Kazeminy may have paid large bills for clothing purchases at Neiman Marcus in Minneapolis by Senator Coleman and his wife.
“According to the Confidential Source, both Thomas and McKim advised defendant Kazeminy that such payments by DMT to Senator Coleman would be improper. On information and belief, at that time both Mr. Thomas and defendant McKim refused to make such payments for DMT.
“According to the Confidential Source, defendant Kazeminy then directed that DMT make payments of $25,000 to an insurance agency in Minneapolis, Minnesota, Hays Companies (‘Hays’). Hays employs Laurie Coleman, the wife of Senator Coleman. According to the Confidential Source, the company conducts no business in Minnesota.”
The complaint alleges that Kazeminy paid the Colemans $25,000 in May 2007 and another $50,000, in two installments, in September 2007. The payments allegedly were billed to the company as “quarterly installment of service fee.”
The complaint adds: “These fraudulent and grossly improper payments cost DMT as least $75,000 and brought absolutely no value to the company. Further, based on the facts disclosed by the Confidential Source, these payments expose the company to serious potential criminal and civil liability. As such, they constitute at the very least corporate waste. …
“On information and belief, at defendant Kzaeminy’s instruction, DMT forced then Chief Financial Officer Thomas to resign. This act, according to the Confidential Source, was based in part on Thomas’ refusal to use DMT funds to pay Senator Coleman. On information and belief, also at Defendant Kazeminy’s instruction, DMT terminated the employment of defendant McKim as Chief Executive Officer of DMT.”
The complaint also alleged that DMT paid defendant Otto Candies, who controls the company with Kazeminy, more than $6 million above the asking price for a “vessel,” “simply because Otto Candies demanded that money,” in exchange for which “DMT did not receive consideration.”
Shareholders say Candies also overbilled the company “hundreds of thousands of dollars” for leased vessels.
The complaint describes other alleged inside deals that also cost the company and its shareholders. They demand damages for fraud, corporate waste, negligence, and misappropriation. Their lead counsel is Laurie Schenker Polleck.