PART 3
The VSE hearing panel was told that Don Risling, Yorkton's chief executive officer, became "very upset" with Mr. Hauchecorne over the transactions in the account and asked whether he was part of a short-selling group that had caused the bankruptcy of two U.S. brokerage firms, Adler Coleman and Hanover Sterling.
According to Business Week, those insolvencies were caused by aggressive Mob-related shorting of stocks that Hanover had taken public, accompanied by a campaign of intimidation and assault against uncooperative brokers.
In April 1995 -- a month after he was confronted by Mr. Risling -- Mr. Hauchecorne moved to Pacific International Securities, a small Vancouver brokerage firm.
But if Mr. Risling was upset with Mr. Hauchecorne, there was no indication on Yorkton's termination form. In a section asking whether the brokerage firm was "in possession of any information which would suggest that the employee has engaged in any conduct which is . . . inconsistent with just and equitable principles of trade," Mr. Risling replied, "No."
In October, 1995 Mr. Hauchecorne opened a three-person office for Pacific International in Calgary, and opened accounts in the names of First Nassau, Ubiquity Holdings Ltd., Roddy de Primo S.A. and Louis Metzer.
According to trading records, the accounts traded in the same stocks that Business Week had identified as being exploited by the Mafia. They included SC&T, Solv-Ex Corp., Osicom Technologies and Novatek International. (There is no indication that any of these companies were in league with the Mob.)
Mr. Hauchecorne told the VSE hearing panel that the trading was "largely directed by Gurian," although Gurian had no formal trading authority over the accounts. Mr. Hauchecorne admitted he had "made no inquiries as to the character or background of Philip Gurian."
Jodi Miller, an assistant to Mr. Hauchecorne, testified that Gurian called 10 to 15 times a day and dealt in all the accounts, particularly the Ubiquity account, which invested close to $2-million.
She said a person called "George" (who Mr. Hauchecorne said was his brother, but was actually Wynn) occasionally gave instructions on the accounts. She said she recalled Mr. Hauchecorne speaking to Pindling only once.
In March and April, 1996 Mr. Hauchecorne received three requests from Ubiquity Holdings to transfer a total of $1,748,000 (US) to an account in the same name in Hong Kong, which had been set up by Hans-Jorg Schneeberger, a close friend and associate of both Mr. Hauchecorne and his Anker Bank contact, Joe Eberhard.
The transfer requests were signed by Pindling, but according to a hand-writing expert hired by the VSE, the signatures were forgeries.
Mr. Hauchecorne testified that he didn't speak to either Pindling or Gurian with regard to these transfers, but took his instructions from Wynn, who had apparently had a falling-out with Gurian and Abramo. Wynn, however, had no formal authority over the account.
Several weeks later, Abramo and Gurian stormed into Mr. Hauchecorne's New York Hotel room and accused him of stealing their money.
Abramo threatened to kill Mr. Hauchecorne unless the money was returned. He and his thugs then went to another hotel room occupied by Wynn and Eberhard, and threatened Wynn.
Later, in a more civil attempt to recover the funds, Gurian filed a statement of claim against Mr. Hauchecorne and Pacific International in Alberta Court of Queen's Bench.
That lawsuit was dropped when Eberhard successfully brokered the return of the funds to Gurian.
Hong Kong authorities, however, charged Schneeberger with dealing with stolen money. During the trial, the judge noted that the accused "set up a vehicular company and bank account in Hong Kong to receive the money and re-routed it in different amounts to two further bank accounts in Switzerland."
He noted that the company and its bank account bore the same name -- Ubiquity Holdings -- but was registered in the British Virgin Islands, rather than the Bahamas.
"These facts alone are recognizable to any reasonable person, let alone a banker, as a classic 'laundering' situation . . . I have no doubt he [Schneeberger] knew there was something shady about this transaction, at least to the extent of tax evasion."
The judge concluded, however, there was reasonable doubt he knew the money had been stolen, and therefore acquitted him.
Mr. Hauchecorne didn't fare as well. On Feb. 10, the VSE hearing panel concluded he was "sufficiently experienced to recognize that offshore companies can be used for illegal activities, for example insider trading, tax evasion or money laundering."
The panel noted the broker "did not consider it necessary to investigate Mr. Gurian's background" and was impressed that while Pindling was a lawyer and son of the former prime minister of the Bahamas, "Mr. Pindling's role was only that of the incorporating lawyer who acted as the companies' agent."
The panel said that Mr. Hauchecorne testified that by early 1996, he had heard rumours that Gurian was involved in the intimidation of certain brokers in New York and might have been connected with organized crime.
Concluding he should close the accounts, he said he told Wynn: "You introduced me to Philip Gurian. You knew I traded for him. You knew he was bad. I want you to get me out."
However, despite several opportunities to close the accounts, he did not do so.
"If he was serious about closing the accounts, he could easily have reported the matter to his employer and had them take the necessary steps," the panel said.
A long-time Howe Street broker told The Vancouver Sun: "Once you check in, you can never leave this underworld. You have been compensated. You have sold your soul. You are their slave."
The panel found Mr. Hauchecorne failed to use due diligence to learn the essential facts of the offshore accounts; accepted orders without learning the essential facts of the owners and the persons placing the orders; discussed confidential information about the accounts with a person not identified as a beneficial owner or financially responsible for the accounts; and effected the transfer of funds from two of the accounts without the authority of the owners.
A penalty is yet to be determined. Until then, the VSE has instructed Pacific International to place Mr.Hauchecorne under strict supervision.
Mr. Hauchecorne could not be reached for comment. "I'm sorry, he's in Switzerland right now," said his assistant. |
