TSX's Union Client Capwill In Broad Penny Stock Web
TSX Venture Exchange *TSX
Thursday May 16 2002 Street Wire
by Brent Mudry
The prosecution of Ohio death insurance promoter James Capwill, a mob-related client of jailed Vancouver broker Trevor Koenig of Union Securities, has accelerated in recent months, amid a global money-laundering asset hunt in numerous offshore jurisdictions, across the United States and Canada. Mr. Capwill, indicted by an Ohio grand jury last October, was also targeted in a much broader grand jury indictment, featuring John Richard Jamieson, the alleged kingpin of the $160-million Liberte Capital Group viatical fraud, in January.
While U.S. investigators hope to track down Mr. Capwill's money-laundering proceeds through a broad civil subpoena application served last week on Union Securities, the international money laundering probe of Mr. Jamieson's affairs is much broader. Jamieson-related offshore accounts have been uncovered in all the little rat holes -- the Turks and Caicos Islands, Tortola in the British Virgin Islands, and the Bahamas -- while Jamieson-related accounts named the Andorra Trust and the Jersey Trust suggest these secretive offshore havens were used as well.
Meanwhile, one penny stock promotion favoured by Mr. Capwill, 2DoBiz, recently moved from Vancouver to New York, changed names grandly to New York International Commerce Group and is now headed by Philip E. Pearce, a former chairman of the board of governors of the National Association of Securities Dealers, dubbed "the father of NASD." NYIC Group also features a star-studded board of "strategic advisers," including Alexander Haig, the former White House chief of staff to President Richard Nixon, and the late Mr. Nixon's brother, Edward C. Nixon.
Even more intriguing, a reputed close associate of Mr. Capwill, Thomas A. (Tony) Sandelier III, is a penny stock promoter involved in a number of interesting deals. Mr. Sandelier, based in Casselberry, Fla., was hired in March, 2001, to promote a penny stock called eConnect. This is particularly curious, as the United States Securities and Exchange Commission and the British Columbia Securities Commission stumbled upon a major offshore money laundering account in Vancouver a year earlier, in April, 2000, when the SEC was pursuing wire transfers of the ill-gotten gains of Los Angeles tree trimmer and tout Stephen Sayre, who had been illegally touting eConnect.
The SEC, tracing wires from Bank of America accounts in Las Vegas controlled by Mr. Sayre, called on the BCSC to freeze the destination accounts, held by Itex Corp. fraud mastermind Terry Neal's offshore shell bank, Exchange Bank and Trust, at the main downtown Vancouver branch of the Bank of Montreal. Mr. Neal, a fine client who used the BoM branch to launder proceeds of his Itex fraud through personal accounts, launched EBT in mid-1997. He bought the EBT shell, purportedly registered in Nevis and Nauru, the international banking centre built on an island of bird droppings in the middle of the Pacific, from notorious offshore bank promoter Jerome Schneider, who is fighting raids by Canadian and American taxmen on his Vancouver operations last year.
Mr. Sayre's eConnect proceeds were the tip of the rotting iceberg in the account at Bank of Montreal, Exchange Bank's prime money laundering account. A probe showed the account hosted a virtual cornucopia of stock market crooks, although it likely also serviced a few reputable clients. Stockwatch linked EBT to client Dottenhoff Financial, a Nevis shell which traded heavily in shares of WAMEX Holdings, a New York Mafia-related promotion named in a massive FBI raid on Mafia-related penny stock players in June, 2000. The BCSC, the SEC and other U.S. authorities later revealed that career fraudster Ed Durante, another mob-related client of Union's Trevor Koenig, was behind the offshore WAMEX trading.
Most of the $19-million in funds frozen in the Vancouver bank account belong to the unfortunate Mr. Durante, who subsequently cut a deal and turned star federal informant and operative. In October, 2000, using Mr. Durante as bait, the FBI snared Mr. Koenig and New York promoter Roger DeTrano in a scripted sting manipulation of WAMEX. Union broker Mr. Koenig, in jail since his arrest 8-1/2 months ago, faces sentencing Friday in New York.
Thus, you have one Koenig client, Mr. Capwill, who boasted of handing over Liberte funds to reputed Cleveland mobster Eugene 'The Animal' Ciasullo, doing business with eConnect promoter Mr. Sandelier, while Mr. Koenig's other mob-connected client, Mr. Durante, inadvertently lost millions of dollars when a Vancouver offshore bank account was frozen by authorities chasing eConnect promoter Mr. Sayre.
While there is no suggestion of any cross-connections between the Capwill and Durante camps, the case illustrates Union Securities' status as a popular mover of hot funds and Vancouver's status as an international money-laundering conduit.
(Liberte figures Mr. Capwill, Mr. Ciasullo and Mr. Sandelier all now live in Florida. This is fortunate for Mr. Capwill, as the sunshine state is one of those rare havens with homestead laws, shielding financier's and common folks' houses, no matter how big and expensive, from creditors, bankruptcy trustees and often even the tax man.)
All of this is no doubt quite distressing to Union Securities, although there is no suggestion that its management and compliance department had any clue its star broker Mr. Koenig, who ran a small branch office in the border town of White Rock, had attracted such a following among American rogues.
Oddly enough, Mr. Sayre and Mr. Sandelier may have even been working on eConnect at the same time, although they may not have known about each other. eConnect president Thomas Hughes hired Red Iguana Trading Co., which features Mr. Sandelier as president, on Jan. 2, 2000, to "procure acquisition targets which may be purchased on a cash, equity/stock/debt or promissory note basis."
A year later, in March, 2001, eConnect hired Mr. Sandelier directly in a bid to "further develop its business and increase its common stock share's value by enhancing public awareness of the business of the client and its image." The same day, eConnect hired two other consultants: Ralph DiFelice, who used the same address as Mr. Sandelier, and Saudi Prince Saud Al-Faisal of Riyadh. Mr. Sandelier and Mr. DiFelice were paid 200,000 S-8 free-trading shares each, while the Saudi prince was paid 75,000 shares.
Back in Vancouver, Union Securities serviced Mr. Capwill back to at least Aug. 27, 1998, well before Liberte collapsed, when the Ohio promoter wired $750,000 to one Union account.
More recently, Mr. Capwill faxed Union instructions on April 23, 2001, with a cover sheet addressed to Union broker Marty Brown and his assistant Saundra. "Dear Saundra: Please let this letter stand as authorization to journal 200,000 shares of 2Dobiz.com from my account 015-246U-4 to International Investor Relations Group account #018-745U-4," stated Mr. Capwill in the brief letter. Union's March 31, 2001, statement for the former Capwill account, showing Mr. Koenig as the broker, indicated a market value of $180,000, based on its only security position, 200,000 shares of 2DoBiz at 90 cents a share.
Liberte Capital's receiver is now quite keen to find every shred of paper Union Securities has related to Mr. Capwill and his associates, and to hear sworn testimony from a Union official on all the Vancouver brokerage's dealings with the alleged viatical fraudster.
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