Meredian Holdings Group, Inc., is suing former CEO and board chairman Paul Pereira, along with his affiliated companies, under accusations of fraud, misrepresentation and conspiracy.

The 16-count lawsuit alleges that Pereira, along with his companies The Alton Group, The Alton Consulting Group, Alton Group, Inc and Alton Bio, his wife Rachael Pereira and her graphic design company The House of Miami, all contributed to damaging Meredian from when he was brought onboard in the summer of 2013 to when the company ended its relationship with him in December 2015.

In the summer of 2013, before any contracts had been signed, Pereira proposed implementing a “Turnaround Plan”. At that, time DaniMer and Meredian, Inc., were experiencing financial difficulty, according to the lawsuit.

The plan suggested that Pereira would become executive director of both companies, which would both be restructured and reorganized. Other plan items included pursuing additional licensing opportunities for the companies’ technology and raising additional capital for a production facility.

During meetings with the DaniMer and Meredian board of directors, Pereira stated he had a Bachelor of Science degree in mechanical engineering from Texas A&M, a master’s degree in business administration and international business and finance from the University of West Indies, a bachelor of science degree in chemistry from McGill University and a doctorate of business administration, international business strategy M&A/Capital Markets from St. John’s University.

A “memorandum of understanding” signed between DaniMer and Meredian and Pereira in August 2013 made him an officer, director and employee of the companies.

In exchange for the “services” Pereira and his company the Alton Consulting Group would be providing, the memorandum provided 20 percent of shares in DaniMer and Meredian in the event of certain financing or restructuring services Pereira promised earlier in his “Turnaround Plan.” Alton Inc., another of Pereira’s companies, would also receive $35,000 per month for “turnaround consultancy services”, 5 percent of any capital infusions received by either DaniMer or Meredian, regardless of debt or equity, and 2.5 percent of any funds raised via a New Market Tax Credit, the case reads.

DaniMer and Meredian also entered into a stock purchase agreement with Alton Bio, another entity owned and controlled by Pereira, to sell the company 20 percent of the company’s shares for $6.6 million, payable by delivery of a promissory note with an interest of .28 percent per year. The note’s principal balance was to be paid off by March 1, 2018.

No part of the principal or interest required by the note was ever paid, the lawsuit states.

In April 2014, the combined company known as Meredian Holdings named Pereira as executive chairman and CEO of the combined company, and agreed to continue using Alton Consulting Group to implement the “Turnaround Plan”. Alton Consulting was agreed to be paid $50,000 per month, 5 percent of any capital infusions up to $100 million, and certain net royalties received from licensing agreements

Two months later, Meredian and Alton Bio entered into another agreement where Meredian agreed to provide an “unfunded, nonqualified deferred compensation benefit to Alton Bio in the amount of $6,618,480.” In exchange, Pereira and Alton Bio agreed to promote the “success of Meredian, increase Meredian’s value and encourage Alton Bio to maintain its consultancy with Meredian.

Pereira was granted more stock options in January 2015. At that point, Pereira’s agreements with Meredian stipulated he or his companies were paid no less than $3,109,535.61, was provided certain shares of stock valued at no less than $8.5 million and was reimbursed for his various expenses of no less than $150,000.

By spring 2015, Pereira and his companies had allegedly failed to perform its duties laid out in the “Turnaround Plan” or any of the other agreements between the two parties. In addition, an investigation conducted throughout September and October 2015 revealed that Pereira had engaged in behavior over the past year and a half that damaged Meredian’s business and relationships with current or potential customers and investors.

The lawsuit lists that Pereira:

• Altered Meredian’s projects and other company information during presentations to potential customers and investors.
• Used Meredian funds to reimburse himself for non-business related expenses, including dry cleaning services, dining expenses, boat fuel and fishing equipment.
• Used Meredian’s money on “useless endeavors” including establishing an office in Miami, Florida, hiring personal friends of Pereira who lacked any relevant experience and brought no value to Meredian.
• Repeatedly engaged in self-dealing, including causing thousands of dollars to be paid to The House of Miami, a graphic design company owned and controlled by Pereira and his wife, which the couple directly received.
• Failed to show up to numerous meetings with potential and current customers or investors, or showed up and then becoming grossly inebriated.

At no time did Pereira have a degree from Texas A&M or the masters from the University of the West Indies, the lawsuit claims.

Whether or not Pereira possessed the other degrees he claimed to have couldn’t be proven, because the universities either did not have relevant record or did not provide enough information to confirm the degrees even existed.

It also came to light that Pereira and Meredian board member Tim Smith entered into an agreement where Smith would receive a portion of Pereira’s income in exchange for any influence Smith could exert to facilitate Pereira or his companies’ engagement with Meredian.

The lawsuit adds that as part of this undisclosed arrangement, Pereira made Tim Smith a manager of Alton Bio “in order to facilitate without detection the transfer of monies and other consideration received from any of the Alton Agreements.”

It wasn’t until late 2015, when Meredian discovered the existence of this secret agreement, that Smith resigned as manager of Alton Bio.

Meredian notified Pereira on Dec. 23, 2015, that all agreement involving him or his companies had been terminated due to fraud. Meredian also demanded the return of shares of Meredian Holdings’ stock and/or stock options and all cash paid to Pereira or his companies, except for an amount representing the limited service that was actually provided.

As of Aug. 29, Pereira and the Alton Companies have failed and refused to return any of Meredian Holdings’ stock certificates, any cash paid to them or any property that belongs to them.

Meredian Holdings and its legal counsel demand a jury trial, the lawsuit states.

Attempts to contact attorneys involved in the case were unsuccessful.