OH NO, not more trouble ?
Stockwatch News Item
B.C. Securities Commission (C-*BCSC) - Street Wire
BCSC-known Purdy allegedly in Redmond bribery scheme
B.C. Securities Commission *BCSC
Wednesday January 29 2003 Street Wire
by Brent Mudry
With John (Jack) Purdy's money laundering trial just three weeks away, the U.S. government is cranking up the heat on the veteran Howe Street promoter and his associates. Court documents filed Monday in Miami confirm Frank Salerno, a relatively small fish in penny stock circles, may be a witness to allegations that Mr. Purdy had prior criminal dealings before being made a prime target in the Bermuda Short sting.
"The United States has learned that in 1999, defendant John K. Purdy and co-conspirator Kevan Garner were involved in stock fraud where they were causing the price/volume of Redmond Capital stock to be artificially inflated in an effort to further a 'pump-and-dump' stock scheme," states Assistant United States Attorney Richard Hong in a court filing.
The stock in question is none other than Redmond Capital, the Howe Street promotion of alleged former South African fraudster Keith Leslie King. As with many Purdy allegations from Florida these days, this one also may be irksome for his close Vancouver business associate Don Sheldon. Redmond operated from the office building that Mr. Purdy and Mr. Sheldon own together, and is now pledged as part of Mr. Purdy's Florida bail.
Mr. Purdy is the key target in the Bermuda Short sting, and no allegations of any kind have been made against his partner, Mr. Sheldon, who is not implicated or otherwise mentioned in the criminal case. Similarly, Mr. Sheldon is not mentioned in the Redmond accusations.
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 Mr. 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.
Mr. Garner pled guilty in early December and agreed to rat on his associates, while Mr. Jolliffe is reportedly expected to plead guilty, but he remains presumed innocent until such a plea change is finalized. The trial is set to start Feb. 18.
Mr. Purdy is out on $5-million bail, with Mr. Sheldon, his sole non-family surety, pledging $1-million as his 50-per-cent share of the downtown Vancouver low-rise office building the pair share ownership of, and run their respective business empires out of. (All bail figures are in U.S. dollars.) The building fronts on two streets, with addresses at 1255 West Pender Street and 1250 West Hastings Street. Mr. King's Redmond Capital has used both addresses in securities filings.
Mr. King carries some baggage. 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.
Although no criminal charges have been filed regarding Redmond Capital, U.S. authorities, presumably based on information provided by the RCMP, outline some detail of their allegations. No allegations of wrongdoing have been made against Mr. King, and there is no suggestion he knew what Mr. Purdy and Mr. Salerno were up to.
"Defendant Purdy, in particular, provided bribe money to an individual named Frank Salerno so that brokers who were the market makers for Redmond Capital, which was traded on the over-the-counter market (the bulletin board), would purchase Redmond Capital for their inventory or for their customers, instead of another stock," states prosecutor Mr. Hong in a court filing. "Mr. Purdy provided bribe money to Salerno more than once in 1999 in Vancouver, Canada."
If U.S officials are to be believed, Mr. Purdy was helpful in snaring himself when he bragged about his Howe Street prowess.
"This evidence shows the context and background, as well as defendant Purdy's motive, intent, plan, knowledge, or absence of mistake or accident. During discussions with an undercover law enforcement agent, defendant Purdy discussed his interest in stock deals and, in fact, discussed Redmond Capital as a company in play," states Mr. Hong. "The foregoing explains the chain of events, motive, plan, knowledge and forms an integral and natural part of an account to complete the story for the jury."
It should be noted that Mr. Salerno is no blushing nun, and he, like most good informants, is well known to police.
While U.S. and Canadian officials believe Mr. Purdy is a major money laundering figure, along with associate Mr. Chambers and Mr. Hepburn, Mr. Salerno has an entrepreneurial flair for smaller-stakes opportunities.
Mr. Salerno pled guilty on May 23, 2000, in British Columbia Provincial Court in Vancouver to two counts of fraud over $5,000 (All Salerno figures are in U.S. dollars.) He was given a conditional sentence of 15 months and probation, which is similar to home detention, but much laxer.
Mr. Salerno was also ordered to pay restitution to his victims of about $40,000. His crime was ripping off banks by deposited rubber cheques in ATMs, or automated teller machines. The Purdy associate was ordered to pay back $29,411 to the Canadian Imperial Bank of Commerce and $10,488 to the Bank of Montreal.
Mr. Salerno's Bank of Montreal shenanigans took place between Feb. 18 and March 10 in 1999, the same year Mr. Purdy was allegedly using him to grease Redmond market makers.
Mr. Salerno also faced unrelated wire fraud charges in Washington State in two cases, in 2000 and 2001. In the latter, he pled guilty in mid-2001 and awaits sentencing April 18, barring any further delays.
bmudry@stockwatch.com
(c) Copyright 2003 Canjex Publishing Ltd. stockwatch.com |
