California Wow fitness founder denies embezzlement

California Wow fitness founder denies embezzlement.

The founder of listed and bankrupt fitness firm California Wow Xperience Plc (CAWOW), Eric Levine, on Wednesday denied fraudulently transferring the company’s funds overseas.

The failed CAWOW fitness firm was accused by the Anti-Money Laundering Office (Amlo) on June 7 of cheating its customers and shareholders by reporting losses while transferring 1.69 billion baht out of the country over 10 years.

Mr Levine, who has given no legal testimony so far, issued a statement to the media saying that documentary evidence pertaining to his innocence had been submitted to  Amlo.

The statement said the documents provide full disclosure of the company’s financial transactions, and were accompanied by a letter denying any wrong-doing by CAWOW or any of its directors.

He would also cooperate to allow Amlo to access and investigate the company’s bank accounts and business activities.

“I state with absolute certainty and in the strongest, most unequivocal terms that CAWOW operated transparently and that neither I nor any directors or staff members ever made any improper or illegal transfers of even a single baht out of the company,” Mr Levine said.

It is alleged that in the three years 2009-2011 CAWOW illegally transferred 364 million, 495 million and 416 million baht out of Thailand, together with additional large sums during other years.

“Any transfers of this scale would be almost impossible to execute since the amounts represent nearly half of CAWOW’s entire income in the related years. Even the most cursory audit would easily detect such massive transactions,” Mr Levine said in the statement.

As a listed public company, CAWOW was monitored by independent government entities such as the Securities and Exchange Commission, the Stock Exchange of Thailand, and the Bank of Thailand. The company’s financial reports were also audited by respected auditors, the statement said.

Eric Levine denies the fraudulent transfer of the company’s funds overseas.

The documentary record clearly showed that instead of taking the money out of the company, he actually transferred almost 65 million baht into the company through his companies and associates with a substantial portion of that as recently as 2011, he said.

He was confident this business could have survived if the plans and actions that were being taken for its recovery were not undermined through “illegal actions”.

The company’s business was seriously and adversely affected by the political disturbances and the flooding crisis of 2011.

“It would still have been possible for the company to recover and continue to provide services to members if the landlord of six of our clubs had not interferred in the ability of members to make use of the facilities by obstructing access or disrupting the supply of electricity and other utilities,” Mr Levine said in the statement.

He claimed the landlords of the clubs’ facilities ignored court orders to re-open the clubs and provide utilities, causing the company to lose more than 200 million baht in revenue, from which it was unable to recover.

In October 2012, many unhappy customers lodged complaints with the Department of Special Investigation (DSI), accusing the company of fraud.