More on the trial, Bolivian hardwood palaver.
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B.C. Securities Commission (C-*BCSC) - Street Wire
BCSC-known Purdy had earlier death threat, jury told
B.C. Securities Commission *BCSC
Wednesday February 26 2003 Street Wire
by Stockwatch Miami correspondent
When an enforcer started appearing at his 1250 West Hastings Street office in downtown, Vancouver inquiring about overdue repayments of laundered funds, Jack Purdy started to get nervous, a Miami jury was told. The testimony came from one of Mr. Purdy's Vancouver partners, Kevan Garner, the star witness at the Howe Street penny stock promoter's Bermuda Short money laundering trial.
"Our deal with them was is that we were supposed to have the money for 60 days," testified Mr. Garner. The jury earlier heard that Mr. Garner pled guilty in early December and agreed to fully co-operate with authorities, including testifying against Mr. Purdy. The pair were arrested Aug. 14, among 60 defendants, including 20 Canadians, rounded up in the overall Bermuda Short sting, a two-year joint RCMP-FBI undercover operation.
The jury earlier heard that Mr. Garner, who kept in frequent contact with Mr. Purdy, was given $500,000 in cash by undercover RCMP and FBI agents posing as members of a major drug trafficking organization, the Colombian Cali cocaine cartel.
According to transcripts, the RCMP undercover agent, code name Bill McDonald, was blunt with Mr. Garner. "If you #### us in one of those pretty banker games, you're going to get hurt," Mr. Garner was told.
When Mr. Garner failed to turn around the laundered money as quickly as promised, the E-mails he received from Mr. McDonald became more threatening.
Then, one day, a man ominously appeared in the office building Mr. Garner shared with Mr. Purdy.
This upscale character low-rise, a few blocks from Vancouver's harbour waterfront, is the operational headquarters for the respective business empires of Mr. Purdy and his close business associate Mr. Sheldon. (No allegations have been made against Mr. 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 building, which he and Mr. Purdy own together.)
The building actually fronts on two streets: Two levels at 1255 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. Purdy's associate Martin 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 Hastings 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. 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.
Mr. Garner told the jury of his disturbing encounter with the collector in the money laundering sting. The man was sent by Ricardo, the undercover FBI agent posing as a Colombian cocaine figure.
"You have money from Ricardo, and I'm not going to leave town until the money is paid," Mr. Garner recalled the man telling him. "I was quite nervous."
"There was another visit. I wasn't there, and neither was Jack. At that point Jack confronted me with it, and I said I had spoken to Bill (McDonald), and it was a non-threatening visit, and that it as almost resolved," testified Mr. Garner.
However, according to Mr. Purdy's criminal defence attorney, Neal Sonnett, Mr. Purdy was still traumatized from an unspecified death threat that he had received just over a year earlier.
"If a reasonable person, who has just been through a traumatic experience, and was now being faced with bodily harm, wouldn't he work to get the $500,000 back?" Mr. Sonnett asked Mr. Garner in cross-examination. Mr. Sonnett withdrew the questions after the prosecutor, Assistant U.S. Attorney Richard Hong, objected.
Although some reference was made to the death threat Mr. Purdy previously received, apparently unrelated to the Bermuda Short operation, few details were discussed in open court.
During Mr. Sonnett's cross-examination of Mr. Garner, he tried to portray his client Mr. Purdy as the unwitting silent partner, and Mr. Garner as the mastermind behind the money laundering scheme.
Mr. Garner protested that he had kept Mr. Purdy abreast of all the developments in the deal, but Mr. Sonnett repeatedly pressed him on whether there was any proof -- other than his word -- that Mr. Garner and Mr. Purdy had spoken about these affairs.
"Since were engaged in a criminal enterprise we felt it prudent not to be put anything down on paper," Mr. Garner responded.
"Mr Garner, I would like to ask you stop acting for the jury and just answer the questions!" Mr. Sonnett shouted back.
The jury also heard that Mr. Garner had purchased a shell company called American Toy Vending with the money he received from the undercover agents, and planned to resell it quickly to German investors, who were not identified in court.
"I went to Hamburg, Germany, to meet with investors," Mr. Garner testified. Prosecutor Mr. Hong then showed a press release on the letterhead of a company called Clever Creations International.
"Clever Creations were going to vend in 100 per cent of their shares into American Toy. The principals in the deal were going to cross shares," testified Mr. Garner.
"I really only stayed a couple of days. I met with the principals, and I said: 'Here are the shares, once we cross the stock, we're ready to go.' Our deal with them was is that we were supposed to have the money for 60 days. We gave the Germans the opportunity, but they never were able to perform," Mr. Garner told the court.
"Needless to say, we were in a bind. Things were getting tense in our offices. Jack said: 'Get this done, because they're going to come straight through you to me.'"
In further courtroom discussion, Mr. Sonnett said the involvement of controversial former Vancouver lawyer Mr. Chambers in the scheme shows that Mr. Garner was acting independently of Mr. Purdy.
Mr. Chambers, a reputed associate of organized crime groups like the Hells Angels, faces a later Bermuda Short money laundering trial. The jury was told that Mr. Chambers is now on poor terms with his former business associate Mr. Purdy.
"I went to Jack's office and said ... what about Martin Chambers?" Mr. Garner testified. "He said Martin Chambers is incredibly difficult to deal with. I said I agreed that Chambers is difficult to deal with, and we left it at that.
"Did Martin Chambers and Jack Purdy get along?" Mr. Sonnett asked.
"Not many people get along with Martin Chambers or Jack Purdy," Mr. Garner responded. The witness acknowledged he introduced Mr. Chambers to Mr. McDonald, the undercover RCMP operative, without Mr. Purdy's knowledge.
Mr. Sonnett then tried to draw an analogy between Mr. Garner's relationship with Mr. Chambers, who was allegedly laundering money for Mr. McDonald in a separate deal, with Mr. Purdy's own relationship with Mr. Garner.
"Do you feel since you introduced them to McDonald that you were involved in the deal?" Mr. Sonnett asked.
"Under U.S. law, yes, I was involved," Mr. Garner replied.
"But in your heart of hearts, do you feel that you were involved in those transactions?" Mr. Sonnett asked. Despite the objections of Mr. Hong, Mr. Garner replied that he did not.
Details of Mr. Purdy and Mr. Garner's running of the companies Redmond and Redcell were also brought into the trial, despite Mr. Sonnett's objections.
"We do object, because its just got nothing to do with the issue at hand. Mr. Purdy is charged with money laundering, not securities fraud. This testimony is solely designed to make my client to look like a bad guy," Mr. Sonnett said before the jury entered the room.
"It would be highly prejudicial to tell the jury that Mr. Purdy is a sleazy businessman."
In other testimony, under direct examination from Mr. Hong, Mr. Garner described methods he would have used to avoid a paper trail.
"If I had paid $300,000 in my bank account and deposited it in Southern Star (the sting money laundering vehicle), and there was a problem, it would have traced back to me. But in this case I could send it through my attorney's trust account and it would be covered by attorney-client privilege," Mr. Garner testified.
Later, Mr. Sonnett asked him whether he had ever asked an attorney about such an arrangement, and Mr. Garner acknowledged he had not.
"Are you aware that the lawyers cannot hide the identity of a client? Were you aware that if subpoenaed, the lawyers must divulge the identity of the client?" Mr. Sonnett asked Garner, who said he was not.
"So you would say that this was misguided?" Mr. Sonnett asked.
"There were a lot of things that were misguided about all this," Mr. Garner replied.
The jury also heard that just before everything came crashing down for the Bermuda Short targets, Mr. Purdy started having premonitions of events to come.
"Just prior to coming to Miami, he (Mr. Purdy) said: 'Kevan, I've got a deathly fear that this is a sting operation,' and I said that this is an awful time to get worried," Mr. Garner remembered saying before an August, 2002, trip to the U.S.
"Jack was very nervous to go to New York, and I said 'Don't worry, it's not a sting operation.'" |
