By Dan McCue

Two of CaroLinks’ biggest initial investors are suing the company in the wake of revelations that the S.C. Attorney General’s office is investigating the firm and its founder, Lucy Duncan-Scheman, for securities fraud.

G. Robert Kraus Jr. of Charlotte, N.C., and a relative, George Kraus, of Southampton, N.Y., are two of the 27 CaroLinks’ investors identified by only their initials in a recent order issued Oct. 12 against the company by the S.C. Attorney General’s securities division.

The lawsuit, which provides more detail into the alleged inner workings of CaroLinks than the attorney general’s order, asks for a jury trial and the appointment of a receiver to oversee the finances of CaroLinks and its parent entity, Safe-Ports LLC.

The suit also seeks a preliminary injunction wresting control of the company’s financial assets from founder Lucy Duncan-Scheman and her husband Ron Scheman. It also requests an award of damages in an amount to be proven at trial but thought to be at least $25,000 each for Lucy Duncan-Scheman’s and Ron Scheman’s alleged breach of fiduciary duty, and repayment of the plaintiffs’ court costs.

Alan Capper, CaroLinks’ spokesman, could not be reached for comment by phone or e-mail.

According to the lawsuit, filed in the Court of Common Pleas on Oct. 19, the Schemans; Kenneth Londoner, who is listed on the company’s Web site as the managing partner of Safe-Ports LLC finance; Robert Kraus; and Christine Parrot executed the Safe-Ports limited liability company agreement Oct. 10, 2005.

The lawsuit states that Kraus immediately thereafter invested $500,000 in the company, based “on Duncan-Scheman’s representations and the representations of a private placement memorandum” he received, a memorandum he believed was provided to all of CaroLinks’ equity investors.

During 2006, both Robert Kraus and George Kraus extended four separate loans to the company totaling $1.7 million.

The lawsuit says those loans were made pursuant to the terms of a promissory note executed on behalf of Safe-Ports and individually guaranteed by the Schemans and Londoner.

Each of the loans was to be repaid, with interest, within 45 days.

According to an affidavit provided to the court by Robert Kraus, the money was intended to serve as a bridge loan to fund general and administrative expenses of Safe-Ports/CaroLinks in its startup phase, subject to being paid with other financing that Duncan-Scheman represented would be forthcoming.

He also stated in the affidavit that the profit from last month’s Jafza International’s purchase of Carolinks’ Orangeburg property is the ideal time to dissolve Safe-Ports and Carolinks for the benefit of all creditors and shareholders.

Safe-Ports and its principals defaulted on their obligations, the lawsuit said.