BC lawsuit accuses brothers of diverting money from a US real estate investment into overseas deals
A Vancouver investment adviser, Neil Pope, is suing Richmond accountant Peter Stojak and his brother, land developer Patrick Stojak, over a US real estate investment gone wrong.
According to Pope’s lawsuit filed in BC Supreme Court, CA$8 million of his funds, which were supposed to be invested in Arizona properties, were instead diverted to overseas ventures without his consent.
The trouble began in 2010, shortly after the US subprime mortgage crisis, when Peter Stojak approached Pope with an investment opportunity. Peter assured him that his brother Patrick was a successful businessman with extensive experience managing real estate deals, especially in Arizona, it was alleged.
What Peter failed to mention, according to the lawsuit, was that Patrick had been banned by the BC Securities Commission in 2004 for selling securities without a prospectus and making misleading promises of 2,500% returns. This resulted in investor losses and a three-year ban from trading, along with a CA$5,000 fine.
Despite this, Peter convinced Pope to invest in Patrick’s real estate business, it was claimed. Pope was allegedly told that his money would be used to buy, renovate, and resell properties in Arizona and other states.
Peter would manage the accounting, while Patrick would oversee the real estate operations. Pope was assured he would be kept informed of all transactions and could withdraw his earnings at any time, it was stated.
Initially, the brothers provided Pope with accounting records, showing how proceeds from property sales were reinvested. Pope, trusting that his investment was being managed properly, continued to increase his investment, the lawsuit claims.
However, by late 2023, Pope grew suspicious that his funds were being used for something else. He repeatedly asked the brothers for a detailed accounting of expenses and transactions but received incomplete and false information, it was outlined.
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Eventually, Peter admitted that, since 2018, US$5.8 million of Pope’s investment had been sent overseas for unspecified purposes, it was claimed. The brothers provided conflicting and confusing explanations, suggesting that the money had been loaned to other businesses or seized by foreign governments, the lawsuit said. Pope said these explanations were "blatantly false."
The lawsuit alleged that the Stojaks acted in bad faith, breached their fiduciary duties, and mismanaged the investment. Pope said he had suffered significant financial losses and that the brothers used the investment as a "sham" for their own benefit.
Despite alleged repeated promises to return the money, Pope said the brothers had failed to do so, leaving him with damages and a loss of expected profits.
In addition to seeking the return of his funds, Pope is pursuing damages for negligence and breach of trust. The case continues to unfold in BC Supreme Court.
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