Lab Rats

Most Doctors Agree: Use Caution When Mixing Stocks and Drugs

The monitor's report cites an affidavit filed by an Infolink board member, Stewart Wright, who claims that ActiveCore sought to "bribe" him with a $400,000 payment under the guise of a consulting agreement. In exchange, the report says, Wright was to give ActiveCore 6 million shares of Infolink stock he controlled, appoint two ActiveCore surrogates to Infolink's board of directors, and finally terminate Correia.

Wright didn't make the deal, and ActiveCore's hostile takeover bid collapsed. But ActiveCore had another weapon at its disposal: George Theodore, a man who knew a thing or two about Infolink.

By May 2004, anxiety was rising among Infolink executives. As the monitor put it in his report, "Mr. Theodore was, after a period of quietude of some 16 months, again raising his previous allegations" related to Correia's criminal history.

"[P]erhaps Mr. Theodore was now attempting to force Mr. Correia to buy Mr. Theodore's bloc of shares," the monitor wrote.

Correia and Infolink wouldn't budge.

Later that same month, Infolink officers would field an even-less-subtle threat: an e-mail from an ActiveCore executive that mentions how Theodore had made ActiveCore aware of "some issues... which, if true, is quite disturbing," according to the monitor's report. The executive, says the report, "suggested that this might result in a price decline for Infolink shares and offered to 'buy control of Infolink.' "

So it seems more than coincidence that exactly a week after this note, Canada's biggest daily newspaper, the Globe and Mail, blew the lid off Correia's dark secret.

On May 29, 2004, an 1,800-word article ran under the headline, "CEO's killer past comes back to haunt him." The piece credits Theodore with exposing Correia's crime through letters sent to Infolink board members and the Ontario Securities Commission, which regulates public companies in the province.

It's hard to envision an article more devastating to a company's fortunes. Its second paragraph says, "many shareholders don't know that 20 years ago, Mr. Correia picked up a baseball bat and smashed his father's head while he was fixing the family car at their home in Winnipeg."

It continues, "As Joachim Correia went down, his son hit him three more times. Then he got a smaller bat and hit him again." The article describes how Correia then rolled his father's body in a carpet, put a plastic bag over his head, then deposited the body in a river.

Testimony from Correia's mother, the article says, convinced the judge that Joachim Correia was abusive toward his son and wife. The judge cited this as a factor in Cesar Correia's sentencing.

In the years after he left prison, Correia graduated college and received a pardon for his crime. He told the Globe and Mail that this was the reason he did not disclose it in public filings and maintained that the case had no bearing on his fitness to run a public company.

In June 2004, an Infolink shareholder named John Holden sued the company, in part for Correia's failure to disclose his criminal past. Theodore's fingerprints show up on that lawsuit as well. According to the monitor's report, Stewart Wright, the Infolink executive, said Holden and Theodore were friends who had worked together at a company that would later be acquired by ActiveCore. He called Holden a "straw man" for Theodore.

The monitor expressed concern in his report that there may have been "unlawful collusion" between Holden and ActiveCore executives. The report cites an affidavit by Holden as revealing that "Mr. Theodore was the source of Mr. Holden's concerns about Infolink and Mr. Correia."

Theodore denies egging on Holden or any other shareholders — he was still bound by that confidentiality agreement, after all. (Holden's attorney did not return calls for comment.)

"But I told them, 'You need to ask questions, look further into it,' " Theodore says. "I wasn't going to come out and tell them [about the murder] because I was a private citizen at that time," not an Infolink executive. Had he been an Infolink executive, he says, he would have been obligated to disclose Correia's past in order to keep faith with shareholders.

About the same time that Holden sued Infolink, Infolink sued ActiveCore, alleging that ActiveCore had exploited Theodore's former position at Infolink to gain an unfair advantage in its acquisition bid. The dueling lawsuits remain active, and for that reason, the individual filings by the two sides are not available to the public. Executives and attorneys on both sides either refused to comment on the cases or failed to return calls.

Far away from the treachery that took place in Canada, Theodore is sitting at the CEO's desk at University Lab, asking a million-dollar question: "Did Cesar talk to you?"

He hopes so. But Correia did not return my phone calls or e-mailed inquiries for this article, probably because Correia didn't want to give Theodore a chance to refile his libel suit against him.

That suit, which landed in Florida Southern District Court this past May, accused Correia of writing defamatory messageboard posts under the pseudonym Bryan Swan. In the complaint, Theodore's attorney attached a transcript of a phone call allegedly made to Ken Silberling, whose company leases the office space that is University Lab headquarters.

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