This case has been a tremendous misfortune
for him and his family.
This case has been a tremendous misfortune for the shareholders of mdmn and npec...
"REALLY", IMNSHO, of course
Medinah's Price gets lost FBI report just before trial
Medinah Minerals Inc U:MDMN
Shares issued 249,475,716 Apr 29 close $0.004
Wed 30 Apr 2003 Street Wire
by Brent Mudry
In a surprising development, embarrassing for federal officials, the
Miami-based Bermuda Short prosecution team has suddenly uncovered a
long-lost conversation between Les Price and the FBI last August, just
after the Howe Street promoter's arrest, which supports his adamant claims
of innocence in the fictitious mutual fund bribery sting. The discovery
disclosure comes three weeks before Mr. Price's trial is set to start on
May 19.
While the FBI interview notes should have been provided to the defence
within 14 days of an Aug. 23 standing discovery order made by a Miami
judge, or in following months, defence lawyer Paul Donnelly does not fault
Assistant United States Attorney Richard Hong, the prosecutor for Mr.
Price. "I was surprised to get it so late," Mr. Donnelly told Stockwatch.
"I don't know who's at fault."
The suddenly discovered FBI interview was made hours after Mr. Price was
arrested on Aug. 13, after he was lured down to Florida for the arrest
operation.
The two-pronged Bermuda Short Operation -- one for bribing fictitious
mutual fund officials, the other for drug money laundering -- was unveiled
Aug. 15, with the unsealing of 23 indictments and arrests of 58 targets,
including 20 Canadians.
All parties remain presumed innocent until and unless proven otherwise. A
number of the targets have pled guilty, some have been acquitted at trial,
a few have had their charges dropped or stayed, and most, including Mr.
Price, maintain their innocence to the charges.
North Vancouver-based Mr. Price, then the head of Medinah Minerals Inc., a
Howe Street penny stock mining play, was arrested in the mutual fund
bribery sting. His sole co-defendant is Joseph R. Huard Jr., a founder and
officer of Shamrock Partners Ltd., a brokerage based in Media, Penn. Mr.
Price faces a total of 14 charges, including one count of conspiracy to
commit wire and securities fraud, 10 counts of wire fraud, two counts of
securities fraud and one count of money laundering, the latter relating to
the stock scheme. He faces a theoretical maximum of five years imprisonment
on the conspiracy and wire fraud charges, 10 years for securities fraud and
20 years for money laundering.
The indictment claims Mr. Price agreed to arrange for Mr. Huard, the
undercover agent, the co-operating witnesses and the fictitious corrupt
fund manager a total of $1.5-million in undisclosed kickbacks in return for
the fictitious fund buying $5-million worth of overpriced Medinah shares.
Only a small fraction of these large planned amounts ever changed hands, in
what authorities call a "test trade." The indictment claims the fictitious
fund wired $25,000 to purchase 25,000 Medinah shares, and Medinah, on Mr.
Price's instructions, wired back an alleged bribe of $10,000, less a $20
bank fee, to the undercover agent's account in Miami.
While the U.S. government will not publicly show all its evidence until
trial, the recently discovered FBI report supports Mr. Price's claim that
he thought he was just doing an honest deal, free of any alleged
corruption.
The FBI "FD-302" report consists of brief dictated interview notes made
Aug. 13, just after Mr. Price's arrest, by Special Agents William Weiss and
Alan Santiago in Palm Beach county, Fla., transcribed on Aug. 21.
The FBI agents note that Mr. Price, after being advised of his
constitutional rights to silence, advised he wished to speak to the
interviewing officers without his attorney present. The officers then note
the information Mr. Price provided.
"Price has been working for MEDINAH since 1995. In April 2001, the company
had finished drilling for gold in Chile, South America and needed
additional funding for additional drilling operations. The company ACA HOWE
INTERNATIONAL recommended to MEDINAH to get additional funding for
additional drilling operations. PRICE advised that he and the company
MEDINAH did an agreement with LARSON INTERNATIONAL out of London where they
would finance $5 million in exchange for twenty-five percent interest in
MEDINAH's mining property. However, the funding never came through and
MEDINAH still needed funding to continue their operations," states the FBI
report.
"Between April and July 2001, JOE HUARD called PRICE and told thim that a
group out of London looked at MEDINAH's company's engineering report and
were interested in providing financing to the company. PRICE told HUARD
that he was not interested because he had signed an agreement with a London
company and did not need financing."
"Several months later, HUARD called PRICE again and said that the group in
London was still interested in financing MEDINAH's operations. PRICE
advised that his circumstances had changed, and explained to HUARD that the
LARSON group had not come through yet and that he was interested in meeting
this new group of financial investors," state the FBI agents.
"PRICE then received a phone call from DAVE JONES, ROBERT CHANEL and MIKE
Last Name Unknown (LNU). During the phone conversation, these individuals
suggested they were interested in financing MEDINAH's operation. This was
around September 2001. PRICE agreed to meet with the three (3) individuals;
however, due to conflicting schedules, he had to ask the president of the
company, GREG CHAPAIN, to meet with them which they did sometime after
September 2001."
(Mr. Chapain is actually Mr. Chapin, who resigned from the company in the
wake of Mr. Price's arrest. No suggestions of any wrongdoing have been made
against him.)
"After the meeting, CHAPAIN told PRICE that these individuals seemed like a
nice group of men and that everything seemed okay, and to go ahead and
process the financing through them. CHAPAIN never mentioned anything about
a commission. Sometime after CHAPAIN met with JONES, CHANEL and MIKE, PRICE
came down to Florida to see the financing through and met with MIKE, DAVE
and ROBERT. PRICE believed that this was sometime in January 2002. At that
time, PRICE and the three (3) men negotiated the terms of the investment
contract."
The remainder of the brief FBI 302 report describes the nitty-gritty
details.
"The agreement was that the company would purchase redeemable, convertible
shares of MEDINAH with a ten percent interest factor, convertible after two
(2) years, into four (4) common shares at twenty-five cents a share. PRICE
negotiated the commission rate to thirty percent of the net proceeds. PRICE
then told ROBERT, DAVE and MIKE that he had a lot of legal fees to cover to
pay for the preparation of the shares, and that he would need $25,000,"
states the report.
"The men then sent PRICE the $25,000 and he sent them a commission of
$10,000. PRICE indicated that the money was wired to MIKE's company, and
that the shares were sent via FEDERAL EXPRESS to MIKE's office in Atlanta,
Georgia. PRICE advised that the shares were prepared by MEDINAH's corporate
lawyer, KEN TASCHUK. MIKE's company purchased 25,000 shares at $1.00 each."
While Mr. Price's trial defence will unfold in three weeks, this
post-arrest report hints the defence will be that Mr. Price thought he was
merely paying a 30-per-cent commission for buying from a legitimate mutual
fund enamoured with Medinah, not that he agreed to pay illicit bribes to
stuff the fund with the penny stock.
Left unexplained is how this FBI report vanished for eight months before
suddenly materializing last week. AUSA Hong filed the document in court
late Friday in a seventh supplemental discovery response, and faxed it on
Monday to defence counsel Mr. Donnelly.
"Attached is a 2-page statement of the defendant that the undersigned
received last week. The undersigned was unaware of the existence of the FBI
302 report until last week," states Mr. Hong in the court filing.
Mr. Donnelly is surprised at the late discovery, but suggests that in the
thousands of documents handled by the FBI and the U.S. Attorney's Office in
the numerous Bermuda Short cases, this one may have just fallen through the
cracks. "There appears to be nothing surreptitious -- it is probably just
an innocent ommission," he states.
The defence lawyer, meanwhile, predicts a full victory once the case heads
to trial in mid-May. "We are absolutely confident -- Les Price has
maintained his innocence from the beginning," Mr. Donnelly told Stockwatch.
"I am supremely confident he will be acquitted on all 14 counts."
***"Les Price is a straight-up guy. This case has been a tremendous misfortune
for him and his family."***
(c) Copyright 2003 Canjex Publishing Ltd. stockwatch.com
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