The Toronto Integrated Market Enforcement Team of the Royal Canadian Mounted Police has arrested and charged Petar Vucicevich, age 43, of Harrow, Ont., with two counts of fraud, the RCMP said Monday.

Restraining orders for 11 real properties, in the Colchester, Ont. area, were also obtained.

The investigation began following a referral from the Ontario Securities Commission. The charges relate to allegations that between July 31, 2006 and Dec. 31, 2006, Vucicevich orchestrated and participated in the market manipulation of the shares of Sulja Bros. Building Supplies Ltd. Sulja is owned by Sulja Brothers Building Supplies Ltd., a small lumberyard located in Harrow, Ont.. During the time the alleged fraud was perpetrated, Sulja was a publicly traded company quoted on the Pink Sheets in the United States under the symbol “SLJB”.

It is alleged that Vucicevich, as the interim president, CEO and “controlling mind” of Sulja Brothers, caused a number of false and/or misleading press releases to be issued in order to generate and sustain interest of prospective investors in shares of Sulja. Additional shares were issued directly from treasury without cost to Vucicevich. The shares were subsequently sold for profit on the public market through accounts allegedly held by nominees. The profits generated from the trading of these shares was in excess of US$11.5 million. Police allege that a portion of the proceeds of the fraud were used to purchase the properties for which the restraint orders were made. The properties under restraint are valued at in excess of $1 million dollars.

After taking control of Sulja Brothers, police believe the company was depleted of assets and it ceased operations earlier this year, putting the company’s 30 employees out of work. A new location was opened in Calgary, and was to be known as Premium Building Supplies, however, the business never became operational.

During the two-year investigation, Toronto IMET investigators seized volumes of documentary evidence and interviewed many witnesses including former employees and owners of Sulja Brothers, business associates, creditors and investors.

Since Dec. 22, 2006, Sulja Brothers, Vucicevich and others have been the subject of a temporary cease trade order issued by the OSC. A hearing on the merits in this matter is scheduled to commence on Nov. 16, 2009 before the OSC.

Vucicevich was scheduled to appear in court in Windsor Ont. on Monday.

“Frauds of this nature have a destabilizing effect on the economy and shake investor confidence in the capital markets. This particular matter had a devastating effect on the micro economy in the small town of Harrow. Thirty people lost their jobs and investors lost a substantial amount of money”, said Superintendent Kevin Harrison, the officer in charge of Toronto IMET.

He added, “We hope that the laying of criminal charges in this case sends a clear message to perpetrators that the IMET’s will aggressively investigate complaints of this nature and, with the assistance of the Attorney General for Ontario, vigorously prosecute the offenders. We also hope that the restraint of the properties, a first for the IMET Program, will send a message to fraudsters that we will also pursue their ill gotten gains.”

IE