More Bolivian "hard on"...scratch that,...ER update.......
B.C. Securities Commission - Street Wire..
Pure Gold's Sheldon bailed out Purdy in Bermuda Short
B.C. Securities Commission *BCSC
Friday January 10 2003 Street Wire..
See Pure Gold Minerals Inc (PUG) Street Wire
by Brent Mudry
The biggest and most loyal supporter of John (Jack) Purdy since his arrest on money laundering charges in the Miami-based Bermuda Short sting has been his long-time business associate and fellow Howe Street stock promoter Don Sheldon. The sole non-family contribution to Mr. Purdy's $5-million bail bond came from Mr. Sheldon, who posted at least $1-million by pledging his half-interest in the downtown Vancouver office building in which the pair share ownership. (All figures are in U.S. dollars.)
Mr. Sheldon takes great issue with being described as a "close associate" of Mr. Purdy, according to Mr. Sheldon's Vancouver lawyer Dwight Harbottle, who was involved in the bail negotiations and details. Mr. Harbottle, on behalf of Mr. Sheldon, is demanding that Stockwatch never "... mention or link Mr. Sheldon in future reporting that you might publish in respect of any of the parties mentioned in the Street Wires, August 19, 2002, December 23, 2002 and January 7, 2003."
On Howe Street, Mr. Purdy is well known as a close business partner of Mr. Sheldon, a veteran penny stock promoter who would rather be called a company builder. While Mr. Purdy was a key target in the Bermuda Short sting, no allegations of any kind have been made against Mr. Sheldon, who was not involved, implicated or otherwise mentioned in the criminal case. There is no suggestion that Mr. Sheldon has ever been aware of, or in any way involved in, any alleged wrongdoing by Mr. Purdy.
Mr. Purdy was arrested Aug. 14 after flying from Vancouver to John F. Kennedy International Airport in New York, shortly after setting foot on U.S. soil. In several grand jury indictments, a number of Howe Streeters were charged in a conspiracy to launder millions of dollars of dirty money purportedly from the Colombian Cali cocaine cartel. Arrested and indicted were Mr. Purdy, his partner Kevan Garner, controversial former lawyer Martin Chambers, offshore accountant Michael Hepburn of Barbados, and Ronaldo (Ron) Horvat and Harold Jolliffe, exotic forestry entrepreneurs also involved in Vancouver's penny stock market.
Two have had recent setbacks in court motions. On Monday, Jan. 6, Mr. Hepburn was denied permission to travel, after seeking to return home to Nassau from Florida to attend to his collapsing business empire. The next day, Mr. Horvat lost a bid to severe his upcoming trial from that of Mr. Purdy, a bigger player in the alleged money laundering scheme. Mr. Garner pled guilty in early December, while Mr. Chambers remains in jail after being denied bail due to flight risk concerns.
After Mr. Purdy's arrest in New York, he was transferred to Miami in the Southern District of Florida, where he was subsequently released on bail on Oct. 10, after spending two months in jail. Mr. Purdy was released on $5-million bail, believed to be the highest amount set for any Bermuda Short defendant and 10 times the $500,000 bond set for former Thomson Kernaghan head Mark Valentine. Mr. Purdy was also ordered to remain in South Florida, wear an electronic monitoring anklet at his own expense, and endure a curfew of midnight to 6:30 a.m. at his local residence, a 20th-floor condo apartment at the Yacht Club of Portofino in Miami Beach.
Mr. Purdy made bail thanks in no small part to the loyal support of Mr. Sheldon, who signed off as an individual surety on Oct. 8, the only non-family member to do so.
"Donald R. Sheldon, a prominent Vancouver businessman and industrialist, and the co-owner with Mr. Purdy of an office building in downtown Vancouver, also writes of Mr. Purdy's good character and states his belief that 'Mr. Purdy will respect the court's wishes with regard to bail and will perform the legal requirements to fufill this commitment,'" states Mr. Purdy's Miami lawyer Neal Sonnett in his bail application.
"Mr. Sheldon is also willing to put a major asset at risk to guarantee Mr. Purdy's bail, by pledging his 50-per-cent share of the office building at 1255 West Pender Street in Vancouver as collateral for bail. That office building is valued at over $5-million dollars with approximately $2-million in outstanding mortgages. Since Mr. Purdy will also pledge his half ownership, the pledged value of that property alone will likely exceed $3-million dollars."
This upscale character low-rise, a few blocks from Vancouver's harbour waterfront, is the operational headquarters for the respective business empires of Mr. Sheldon and Mr. Purdy. The building actually fronts on two streets -- two levels on West Pender, the address Mr. Sheldon uses, and three levels at 1250 West Hastings, the address Mr. Purdy uses. A short stroll away is the Bayshore Inn and the WAG barge, two favourite haunts of Mr. Chambers.
The West Pender front is the marquee address, housing such private companies as Mr. Sheldon's DS Management and associate Eugene Beukman's Beukman & Associates, in addition to a number of public penny stock companies in Mr. Sheldon's stable. These include long-time flagship Pure Gold Resources Inc., Castle Rock Exploration Corp., Bard Silver & Gold Ltd. and Vertigo Software Software Corp., which all feature Mr. Purdy in various roles. Mr. Purdy, the former spokesman for Vertigo, was forced to resign as a director in the wake of his Bermuda Short arrest.
The West Hasting front, favoured by Mr. Purdy, has been used as the address for such Garner-Purdy companies as Whistler Inc., Cell Power, and Mr. Purdy's private companies, including No. 50 Corporate Ventures Ltd. Bolivian Hardwoods Corp., the Purdy-Horvat-Jolliffe firm distinguished as the only company noted in the Bermuda Short money laundering indictments, also uses this busy address.
(In September, 2000, while the RCMP end of the undercover operation was in full swing, one of Les Price's OTC Bulletin Board companies, NP Energy Corp., acquired a major interest in Bolivian Hardwood Corp. and named Hardwood principal Mr. Jolliffe to NP Energy's board. Mr. Price, another Bermuda Short target and a former chartered acccountant, was indicted in the bribed mutual fund manager portion of the sting, but no allegations of money laundering were made against him.)
The busy West Hastings front has also been used by Redmond Capital, the Howe Street promotion of alleged former South African fraudster Keith Leslie King. After authorities in the Isle of Man declared in December, 1995, that Mr. King was not a "fit and proper person" to serve as an officer or director of any company in the secretive offshore enclave, he subsequently set up First Nevisian Stockbrokers Ltd. in the even murkier offshore enclave of Nevis, and later set up shop on Howe Street in Vancouver.
The busy low-rise office building, posted as bail, is owned by Cabmerl Industries Ltd., whose sole shareholders are Mr. Purdy and Mr. Sheldon. "Based upon a recent appraisal, Mr. Sheldon and Mr. Purdy each have an equitable interest in the corporation and the office building of approximately $1-million dollars, for a total equity above existing mortgages of approximately $2-million dollars," states defence lawyer Mr. Sonnett in a court filing. Mr. Sonnett describes Mr. Sheldon, the industrialist, as a "close associate" of Mr. Purdy.
In an Oct. 8 letter to Mr. Sonnett, Mr. Sheldon clarifies his ownerhip interest. "I have signed the affidavit which you sent to me before Mr. Harbottle, my lawyer. To be more precise, my 50-per-cent interest in Cabmerl Industries Ltd. is as a result of my 100-per-cent ownership of Buenavista Investments Ltd. I don't expect this makes any difference to the affidavit but I think you should know this," states Mr. Sheldon.
"In addition, the value of my 50-per-cent interest is only approximately $1-million. As discussed with you Thursday, last week, I indicated the mortgage was $1,650,000 CDN and a promissory note was due in respect of taxes paid by me. Since our discussion, I have checked the actual amount of the mortgage. It is $1,638,000."
Mr. Sheldon also tendered a glowing character reference letter for Mr. Purdy on Aug. 29, 10 days after his Howe Street associate lost an initial bail hearing on Aug. 19 in New York.
"Mr. Purdy's dealings with me have been forthright and honest. His many activities provide a constant source of interest, as his talents as an entrepreneur are truly amazing," states Mr. Sheldon.
"His tenacity to follow-up on his urban planning degree has made his dream to make Bamfield, British Columbia, a world destination. He has taken every weekend from Thursday to Monday to operate, manage and renovate his life's passion. He is a doer and gets things done."
Mr. Sheldon, who describes himself as a "business manager and director of a number of public companies trading on the TSX Venture Exchange," notes he has known Mr. Purdy for nine years and has conducted business with him over this period of time.
While Mr. Sheldon and Mr. Purdy share the same downtown Vancouver office building, the only specific dealings Mr. Sheldon notes are out-of-town field projects. "He (Mr. Purdy) provided flight services for Castle Metals Ltd. as to helicopter and float plane support for exploration in Labrador, Newfoundland. He has also provided consulting and drilling services for Pure Gold Minerals for exploration in the N.W.T. and Alberta," states Mr. Sheldon. "Services provided were of good quality and met all industry standards."
bmudry@stockwatch.com
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