Investments linked to controversial accountant
Odessa Petroleum Corp OPC
Shares issued 15,013,254 Nov 17 close $0.05
Tue 17 Nov 98 Street Wire
Also Breckenridge Resources Ltd (BKD)
Also World Organics Inc (WOI)
Also Desert Sun Mining Corp (DSM)
Also Mongolia Gold Resources Ltd (MGR)
POST BOX 99 A POPULAR ADDRESS
by Brent Mudry
Two employee fronts and associated holding companies of a Canadian
chartered accountant accused of potential fraud by police in the Turks and
Caicos Islands invested in a number of Vancouver companies in the past two
and half years. The list includes Pacific Vangold Mines, Mongolia Gold
Resources, Lucky Janda's Desert Sun Mining and World Organics. In addition,
an offshore holding company partly owned by a key employee of Steven Scott
Brown is the major shareholder of Odessa Petroleum, according to filings
with the British Columbia Securities Commission. A preliminary Stockwatch
investigation reveals a series of previously unpublicized offshore
companies in Providenciales, an island in the Turks & Caicos bought private
placements in Vancouver Stock Exchange companies. The offshore accounts are
all linked to Mr. Brown and his associates.
Vancouver Sun reporter Rick Ouston first revealed the Steven Brown story in
Canada in front page stories Monday and Tuesday, six weeks after a small
newspaper in the Turks & Caicos broke the story. Secrecy is a much-honoured
custom in such offshore enclaves, but local Providenciales reporter Sheron
Forde told Stockwatch she became aware of the fraud investigation from an
internal police "wanted" poster seeking Mr. Brown. Ms. Forde broke the
story in early October, about a week after Turks and Caicos police opened a
full-fledged investigation after a mid-September referral to the
Attorney-General's office. No charges have yet been laid, and Mr. Brown
retains the presumption of innocence as police in several countries probe
his handling of clients' accountants. Agencies involved so far include the
Turks and Caicos police, the White Collar Investigation Team, a Caribbean
unit linking Scotland Yard and the FBI, and the RCMP in Ontario. The RCMP
in B.C. are not yet involved.
Court records and media accounts have identified Mr. Brown's main holding
company in Turks and Caicos was Private Capital Management, with Apex
Financial, Director Nominees, Secretarial Services and Enigma Enterprises
as secondary companies. A review of B.C. securities filings by Stockwatch
reveals several other related companies: Mercur Capital, Tintex Holdings
and FCB Capital. All use Private Capital's address of post office box 99,
Caribbean Place, Leeward Highway in Providenciales, with the involvement of
Barbara Virgil or Vonice Parker, two employees Mr. Brown used to front his
affairs.
The exact status of Mercur Capital, a prime investment vehicle, is unclear.
In a form 20 disclosure for June 1997 private placement, Mongolia Gold
claims Mercur is 100 per cent owned by Mauricio Kuperman, a Whitehorse,
Yukon-based investor active in numerous VSE deals. Mercur invested $150,700
in this financing, buying 137,000 units at $1.10. Mercur was a key Mongolia
backer, investing $200,000 in a pair of private placements in March 1996.
The offshore company bought 200,000 shares at 50 cents in one financing and
the same amount in another a week earlier. Private Capital, using Vonice
Parker as beneficial owner, was paid a 20,000-share finder's fee.
In a form 20 for a March 1996 private placement, Pacific Vangold president
Dal Brynelsen claimed Vonice Parker was the beneficial owner of Mercur.
Mercur invested $100,000 in this financing, buying 250,000 units at 40
cents. Although this financing was the same week as Mongolia Gold's, it is
unclear how Ms. Parker could have found herself as both a finder and an
investor. A few months later, in June 1996, Pacific Vangold sold 164,000
units at 61 cents in a private placement. This time, the buyer was FCB
Capital, using the same post-box-99 address. Vangold paid a finder's fee to
a "Nicholas Barwise," who conveniently shared the same post box.
The biggest Vancouver holding related to accountant Mr. Brown may be a
three-million-share stake in Odessa Petroleum. Odessa's predecessor,
International Glendale Resources, paid the shares to Tintex Holdings in
late 1996 in a vend-in of oil and gas exploration interests in the Ukraine.
Glendale paid $130,000 and the shares to Tintex for an 80 per cent interest
in an oil production licence. Regulatory filings indicate Tintex is 50 per
cent beneficially owned each by a Viktor Dmitriyev and Ms. Parker. Tintex
also uses Mr. Brown's Providenciales address. While VSE stock promoter
Peter Tsaparas appears to be the brains behind Odessa, its best-known
director is the Right Honourable Harvie Andre, a former senior Canadian
cabinet minister and close business partner of former Canadian prime
minister Joe Clark.
Worried clients of Mr. Brown have retained lawyers to pursue claims and
assets. In a court-filed affidavit, Toronto businessman William Kelly, who
may have lost $1.2-million, notes that Mr. Brown told him he has an office
in B.C. and "he does a lot of investment business there." "Given the
extensive international travel that Brown does, the international nature of
his affairs, and the mounting criminal investigation in the Turks & Caicos
Islands, the involvement of the FBI White Collar International
Investigation Team, I fear there is a serious risk that Brown will either
destroy evidence that might help trace the whereabouts of Brown's assets,
or Brown may flee to some other jurisdiction where he may have hidden
assets," states Mr. Kelly in the affidavit. The investor's lawyer, Greg
Harris of Etobicoke, won a global asset freeze on Oct. 20. The total amount
of missing money is unknown. Media accounts claim the tally may reach
$20-million, but Turks and Caicos lawyer Gordon Kerr, representing other
Brown clients, believes the firm amount to date may be $3-million. "I have
heard rumours as high as $6-million," Mr. Kerr told Stockwatch. The lawyer
stresses that each transaction must be carefully reviewed before amounts
are lumped in.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com |
