17 December 2001
Internet service provider Froggy.com founder Karl Suleman and his wife Vivian will find themselves in the witness box early next year when they will be examined by the liquidator of Karl Suleman Enterprizes over their failed pyramid-style scheme.
Once the pillars of the Assyrian community, Mr and Mrs Suleman will be allowed to sell some of their assets under a Supreme Court order made on Friday. But the proceeds of those asset sales are to go into the trust account run by the liquidator to the failed Karl Suleman Enterprizes.
Best known for his skywriting antics promoting the Froggy name and his courtship of former US presidents Bill Clinton and George Bush, Mr Suleman raised more than $130 million from members of the community and more than 2000 others during the past 18 months.
The scheme promised returns of up to 16 per cent a month on parcels of cash of more than $25,000, and money from new investors was used to pay old investors.
About $65 million is now missing. Another $45 million has been returned to original investors and another $20 million-odd is estimated to be recoverable from Mr Suleman's group and personal assets. That includes loans to the Froggy Group companies of about $13 million, as well as luxury cars, boats and houses.
The directions hearing in the Supreme Court also set down the date for the hearing of a winding-up application by ASIC for the Froggy group of companies for February 14. This includes Froggy Holdings, Froggy Mobiles and Froggy Music.
Liquidators Paul Weston and Neil Cussen have said they will undertake a ``massive" asset-tracing effort overseas, in particular North America and Asia, to recover the missing assets.
Many of the investors had mortgaged their homes to invest in Mr Suleman's pyramid scheme.
Mr Cussen told creditors that asset sales, including eastern suburbs properties, a Ferrari and a Lamborghini cars and some aircraft would deliver a return of 5c to 25c in the dollar.
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