The dream was to help stop drunken driving. Valco International Inc. was to develop and sell a device that would prevent intoxicated drivers from starting their cars.
But the dream has not become reality, according to a civil complaint filed yesterday by the Maryland Securities Commissioner.
Filed in the Harford County Circuit Court, the suit said that Joseph J. Owsik, former president of Valco, and Leo Coughlin Jr., a former vice president, sold unregistered stock and made false statements in connection with the sale of shares.
About $600,000 that was raised through the illegal sale of stock was diverted for personal use by the company's top two officials, who used the money to pay for such things as birthday presents, telephone bills and a Little League baseball team's trip to Florida, the suit and the Maryland attorney general's office allege.
The suit asks the court to freeze Valco's funds, stop the sale of additional shares and order the company and the two men to repay investors.
"We never misrepresented anything. We've never done anything wrong," Mr. Owsik, 55, said of the complaint.
Mr. Coughlin, 58, who is associate editor of the Aegis, said that he had not read the complaint and could not comment on its specific allegations. But, he said, "Our position is that we never broke any laws."
Mr. Owsik and Mr. Coughlin resigned their positions at Valco in 1989. Mr. Owsik "reasserted control" over the company last year and is the acting president, the suit said.
According to the suit, about 328 investors were sold or given stock in the company, which said it was raising the money to develop Drunkguard, a device that would prevent a car from starting if the blood-alcohol level of the driver was too high.
Formed in 1983, Valco sold stock from 1984 through 1989, including a period during late 1985 and early 1986 when the company's charter was forfeited, the suit alleges.
In addition, the stock that was issued (including shares sold to Representative Helen Delich Bentley, R-Md.-2nd) was unregistered, the suit alleges.
"Hopefully, as a result of this action, investors may see either the return of their funds or the development of a product that justifies their investment of trust and money," said Maryland Securities Commissioner Ellyn L. Brown.