Just a little more history........
Indicted man well known to authorities Leslie Price, charged with fraud and money laundering, had been expelled from the Chartered Accountants Institute, David Baines writes. David Baines Vancouver Sun
Monday, August 26, 2002 ADVERTISEMENT Former Vancouver chartered accountant Leslie Price, who was indicted for wire and securities fraud in a recent FBI and RCMP sting operation, has a long history of stock fraud in B.C.
Price and a Pennsylvania stock broker, Joseph Huard Jr., who was also named in the indictment, were arrested in the United States last week and each charged with 11 counts of wire fraud and three counts of securities fraud. Price was also charged with one count of money laundering.
Price is well known to local authorities. In 1984, B.C. securities regulators prohibited Price from acting as a director or officer of a Vancouver Stock Exchange company for one year as a result of share price manipulation of Starburst Energy Corp.
In 1988, a B.C. Supreme Court judge found he "systematically defrauded" two West Vancouver women in connection with his promotion of Cumo Resources Ltd., a Vancouver Stock Exchange-listed mining stock in which he had a significant undisclosed interest.
The judge issued an award estimated in the $2-million to $3-million range, including punitive damages.
Within days, the Chartered Accountants Institute of B.C. suspended Price on grounds that there was "reasonable likelihood of imminent danger to the public" if Price were permitted to continue working as a chartered accountant.
It was the first time the institute had ever suspended a member in advance of a hearing. He was subsequently expelled.
In 1989, Price agreed to a 15-year stock market ban in B.C. after admitting to his part in the share manipulation of Carepoint Medical Services, another VSE-listed company.
Although banned in B.C., Price continued to promote low-quality stocks, most recently Medinah Resources Inc., which describes itself as "an emerging exploration company with assets in the resource rich country of Chile."
Medinah is registered in Nevada and trades on the loosely regulated OTC Bulletin Board in the United States. Its head office is located in Lake Elisnore, Calif., but it also has a corporate office in North Vancouver, where its affairs were being orchestrated by Price.
Price served as chief executive officer and controlled a significant number of shares through nominees.
According to the grand jury indictment, an undercover FBI agent posed as a corrupt securities trader for a fictitious investment firm called Connelly & Williams Inc. of Boca Raton, Fla., which purported to represent a foreign mutual fund.
Working with the undercover agent were two cooperating witnesses who posed as corrupt stock promoters. Their job was to identify investment opportunities for the fund.
In October, the two cooperating witnesses contacted Huard, a principal of Shamrock Partners Ltd., a brokerage firm in Media, Penn. Huard, in turn, contacted Price about the possibility of the mutual fund buying shares of Medinah Minerals.
According to the grand jury allegations, the undercover agent, posing as the fund manager, agreed to buy five million shares of Medinah at $1 each. This was far above the prevailing market price of six cents.
As consideration, Price agreed to kick back $1.5 million to the fund manager and the two cooperating witnesses. Price also agreed to pay Huard, through an undisclosed "consulting agreement," a fee for arranging the stock deal. Huard was also to receive a cut of the $1.5-million kickback, the indictment alleges.
The indictment further alleges that Price agreed to conceal the kickback payments by wiring them to a Swiss Bank account in the name of Southern Star Shipping Ltd., another bogus entity set up by the FBI.
To ensure that Medinah stock would get on the fund's list of approved investments, Price and Huard agreed to an initial "test purchase" of 25,000 shares at $1 each. For this transaction, the indictment alleges, Price agreed to pay a $10,000 US kickback to two of the fund's due diligence officers, who were said to be in on the scam.
On Jan. 31, Price arranged for Medinah to disseminate a news release announcing the "signed completion of a $5 million financing package. The first deposit of monies, memorializing the framework of the funding deal, have [sic] been received into the Medinah Minerals Inc. bank account."
The company did not reveal the absurdly large premium that the fund was to pay for the stock.
The same day, the indictment alleges, a payment of $9,980 was wired from Medinah's bank account in Canada to the undercover agent's account in Miami.
Dozens of other Canadian and U.S. stock operatives were caught in the sting, most notably Mark Valentine, recently ousted chairman of now-defunct Toronto investment dealer Thomson Kernaghan & Co. Ltd.
dbaines@pacpress.southam.ca |
