BOLIVIAN HARDWOOD CHAMP ?OR CHUMP ?
canada.com
Big on Bamfield
Accused money launderer owns 'three-quarters' of Island community
Jody Paterson
Times Colonist (Victoria)
Saturday, August 24, 2002
(A map showing the location of Bamfield.)
THE BAMFIELD TRAILS MOTEL: one of several Bamfield tourist properties owned by Jack Purdy. He also owns the inn, Kingfisher Marina and a number of houses renovated into lodging.
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Jack Purdy owns a half-finished house on the hill just up from Bamfield's main intersection. It's been sitting empty for four years.
He also owns the Bamfield Inn on the other side of the harbour, empty for the last four years as well.
A flurry of renovation happens every few months and a different set of managers arrive to run the place, but it hasn't seen a paying guest since he took it over.
Purdy owns the Bamfield airstrip, closed now too. He owns the old machine shop that belonged to the local Ostrom family for decades. Closed. His sawmill on the road into town is shut down, too.
All of it has seemed just a little strange to Bamfield's 300 residents, who have been trying to figure out Purdy ever since he blew into their Barkley Sound village five or so years ago and started buying up everything in sight. And now this, the news item that riveted the townsfolk to their TVs last week: Purdy arrested in New York City on charges of money-laundering.
Purdy was one of 58 Canadians and Americans charged last week after a joint three-year sting staged by the FBI and RCMP.
Some of those arrested were charged with stock-market manipulation, having been caught in "pump and dump" schemes to inflate the value of certain stocks.
Purdy, a Vancouver stock promoter and developer, was charged with money-laundering -- which basically means taking money from illegal sources and making it appear legitimate.
Purdy and three others, including Duncan forest workers Harold Joliffe and Ronald Horvat, allegedly agreed to launder $1.4 million in Colombian drug money.
"Nobody knows what it means, or if it's got anything to do with what's going on here," says one resident working at the government dock. "But it's very interesting."
For many in the town, it's also unnerving. Purdy may own a number of dormant businesses, but he also owns quite a few lively ones that are vital to Bamfield's economy.
His companies own most of the isolated town's tourism accommodations -- the inn, the Bamfield Trails motel, Kingfisher Marina and several houses renovated into lodging. He owns the only gas pump, the only marine-fuelling station, the only pub. The local eco-tourism business depends on his lodgings, and many residents depend on him for their jobs.
So the seizure and forfeiture of Purdy's properties if he's convicted would definitely have a dramatic impact on Bamfield. Whether it would be good or bad is a much-debated point around town. Some residents consider him a player from the city "who never really tried to fit into this community" and would be glad to see the last of him. Others fear that his holdings will end up sinking in a sea of bureaucracy and take Bamfield's tourism down with them.
"He owns three-quarters of the town, so there are definitely some worried people here," says one such resident, the first in a long line who didn't want to be identified. "We'd just like to see some of those properties get into the hands of people who want to do something with them."
Purdy, 52 and unmarried, loves sport-fishing. He always has, says his Bamfield operations manager Joe Pearson, right back to his university days when he wrote a thesis on the effects of clear-cut logging on salmon habitat.
Gabriola Island fisheries biologist Dave Lightly recalls Purdy and disgraced lawyer Martin Chambers -- a former Oak Bay resident, also charged in the stock scandal, who often went by his mother's maiden name of Hamersley -- donating $7,000 to enhance fish stocks near Sooke three years ago, apparently for no other reason than to "put more fish in the sea."
Purdy's Hawkeye Marine Group is built around a fishing and boating clientele, and Bamfield must have seemed a natural fit.
The little community on Vancouver Island's west coast is at the end of almost 100 kilometres of bone-rattling gravel logging roads, one via Youbou and another via Alberni. The smart traveller comes in by boat, which is the only way to get to the west side of town.
Heavily dependent on tourism since the crash of the forest and commercial-fishing industries in the 1990s, Bamfield provides services every year to thousands of hikers who typically finish their journey along the West Coast Trail south of the town. But the real money is in sport-fishing. Most of the tourists wandering around town this week were middle-aged American men in search of chinook salmon.
Corporate records show Purdy as a man on a mission in the last half of the 1990s. He became the sole director of a number of small holding companies at that time and used them to buy property around Bamfield and Port Alberni. Pearson says he owns property all over the world.
Purdy wasn't available for comment for this article, but is said to have taken pride in his extensive holdings. Both the Bamfield water-taxi operator and Lightly recall Purdy touring them around the waterfront and pointing out the many properties he'd bought.
The logo for Hawkeye Marine Group is highly visible throughout Bamfield, and Purdy clearly wanted people to get the connection. There's Hawkeye Fishing Charters, the Hawk's Nest Pub, Hawkeye Marine, Hawkeye House. Closer to Alberni, he's got a place called Jack's River Lodge.
The locals say the Vancouver stock promoter wanted to turn Bamfield into the next Tofino or Ucluelet. They admit to having mixed feelings about that.
"He used to tell us that he was going to drag us into the 21st century whether we liked it or not," says one resident, offering her opinion while tending to the flowerboxes maintained by volunteers along the town's waterfront boardwalk.
"He liked to think of himself as the saviour of Bamfield. I got the feeling he thought we were all stupid and uneducated."
Purdy had big dreams and not a lot of follow-through, she says. She points to a little chalet-style house across the way at the marina, still without siding. He once planned to build 300 of them around Bamfield.
As for the scheduled grand opening of Bamfield Inn on the Labour Day weekend, she says she'll believe it when she sees it. The Web site declares the inn as having opened six months ago. Somebody else saw it on the same site a year ago being advertised as open, and "Chef Fritz" preparing to cook up a storm.
"Nobody had ever heard of Chef Fritz," the woman says.
Pearson, the former Albertan who has managed Purdy's Bamfield businesses for the last four years, says suspicious residents have got it all wrong.
"People are under the impression that Jack buys businesses and closes them down," says Pearson, who found out about the charges against his boss on the TV news last week. "What he actually does is buy places that are bankrupt or struggling and hold them for future development. The problem is, the old-timers want this place to stay a sleepy little fishing village."
Pearson says it's tough for him to imagine that Purdy could be laundering money through his Bamfield properties given how budget-conscious he has been.
"We're up here pinching pennies," says Pearson. "If he was washing money, shouldn't we be rolling in it?"
Money-laundering involves taking cash from illegal sources -- drug-trafficking, blackmarket profits -- and passing it through the world's financial systems in a way that both gives it legitimacy and distances it from criminal activity.
As an example, a drug dealer who "sits around on his ass at home" all day and yet lives a life of conspicuous consumption needs a story for the neighbours, says RCMP Sgt. Chuck McDonald, case consultant for the Vancouver Integrated Proceeds of Crime section.
The dealer also doesn't want to raise suspicions by lugging a hockey bag full of cash everywhere to make high-end purchases. He needs to get his money into the system, which can be tricky when financial institutions are required to report all deposits over $10,000 or a suspicious series of smaller ones.
Some such criminals will invest in "pump-and-dump" stock schemes, in which essentially worthless stocks are inflated by a volley of trading by complicit shareholders to the point of attracting the interest of opportunistic investors.
It's two crimes in one. The original buyer gets his money laundered and returned to him as investment profit, minus whatever percentage the launderer keeps. The complicit shareholders then profit from dumping their stocks at top price, leaving duped investors holding the bag.
But laundering can be as simple as "I give you $10,000 and you write me a cheque," adds McDonald. Layering -- a proliferation of transactions that makes it harder for police to trace money to its criminal source -- is preferred by money-launderers, but they'll take what they can get.
McDonald wouldn't comment on Purdy's business operations in Bamfield. And until a court rules on Purdy's case, it won't be known whether the way he chose to manage his Bamfield holdings was criminal or merely odd.
But he did seem to have a genuine fondness for the town. Residents say he came to Bamfield often, sometimes weekly. Some found him hearty and agreeable; others thought he was pushy and manipulative.
He attended several local advisory-planning meetings over the years, although often only to seek support from the Alberni-Clayoquot Regional District for one of his ventures. He didn't, however, sign up for any of the 25 or so volunteer organizations that Bamfield runs on. Residents haven't forgiven him for that.
"There aren't many people who are upset to hear what's happening to him," says the flowerbox waterer.
"He's a special breed, that one. He's just looking for a place to put money. He never got involved in this community."
The criminal charges would seem to be Purdy's most immediate problem: Eight counts of money laundering, two counts of substantive laundering and one count of conspiring to money-launder, all of them involving companies Purdy owns outside of Canada.
But there are smaller problems as well. Vancouver businessman Tom Lucas, who owns a half-share of Bamfield's Harbourside Lodge with Purdy, is suing him over soured business dealings. Neighbours saw Lucas in town this week looking worried.
Purdy also hasn't won himself many fans in his time in Bamfield, and the animosity is worsening with the latest news. But the happy community is a little tense right now.
"It could have been great, what he was doing here. He really likes nice things," says one lodge operator who overlooks a Purdy property. "But there's just so much that we don't know."
jpaterson@times-colonist.com
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