"In the spring of 1996, Jean Claude Hauchecorne, one of the top revenue producers at Pacific International, was summoned to New York by two of his biggest clients. They met in a hotel room and what happened there was shocking. The two clients, Phil Abramo and Phil Gurian, entered the room with two other men. These men were armed. Gurian and Abramo accused Hauchecorne of stealing $1.7-million. They threatened to kill him if the money wasn't returned. Hauchecorne was quite rightly scared for his life. Abramo and Gurian were apparently high-ranking members of the Mafia," stated Mr. Angus in his opening. (All figures, like most of P.I.'s numerous dubious client accounts, are in U.S. dollars.)
Mr. Hauchecorne returned to Canada, waited a few weeks while he tried to resolve his pickle with his offshore-account Mafia clients, and then told his boss Mr. Meier about the hotel room encounter.
"At this point you might have expected Mr. Meier, the president and CEO of a brokerage firm, to stop and wonder how one of his top brokers could be involved with the Mafia and to do all he could to root it out and stop it. (BCSC) Staff would have expected Mr. Meier to order a firm-wide investigation immediately of the situation to determine if any other similar non-resident accounts were linked to persons with unsavoury backgrounds," Mr. Angus told the hearing.
Instead, no one at P.I. did anything to beef up compliance until much later. "No one thought to look into other similar non-resident accounts to check the background of the people P.I. was dealing with, or the activity which was going on in the accounts. If they bothered to look, they would have discovered that many of their clients were criminals and that they appeared to be laundering money through accounts at P.I.," Mr. Angus told the panel.
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