The headline says it all! Whatever happened to "The Mountie always gets its man!"???
Bre-X fraudsters escape RCMP charges
Bre-X Minerals Ltd BXM
Shares issued 219,103,330
Wed 12 May 99 Street Wire
by Brent Mudry
The Royal Canadian Mounted Police has officially closed its investigation
of the $6-billion Bre-X Minerals salting fraud, the biggest commercial
crime probe in the force's history, without laying any charges. The RCMP
confirmed the closure of its criminal probe on Wednesday, the day after the
Ontario Securities Commission laid eight Securities Act charges against
Bre-X exploration vice-president John Felderhof. Mr. Felderhof, who
relocated with his wife to the Cayman Islands after Bre-X's Busang bonanza
proved a bust, was charged with four counts of insider trading for selling
$83.9-million in Bre-X shares and four counts of filing false press
releases, boosting Bre-X's phony reserves to 71 million ounces of gold.
RCMP Inspector Peter Macaulay notes the Bre-X probe was unprecedented in
scope. "It was a huge investigation," Mr. Macaulay told Stockwatch. Mr.
Macaulay led the two-year 11-man probe, which received full cooperation
from Indonesian authorities and assistance from officials in the
Philippines, where Bre-X's Busang field crew, led by the late Mike de
Guzman, was based. Although the RCMP's Bre-X Team was based in Calgary, Mr.
Macaulay is normally based in London, Ont., where the top Canadian Bre-X
class action lawyer, Harvey Strosberg is also based, by coincidence.
The team of veteran commercial crime investigators pulled together two
officers from Toronto, one from Vancouver and Mr. Macaulay, with the rest
based in Calgary. A serious crime investigator also briefly joined in, to
probe Mr. de Guzman's death-by-helicopter. The RCMP notes the Indonesian
National Police's investigation was equally broad. "They conducted the most
expensive investigation in their history. . . they assisted us wherever we
asked," says Mr. Macaulay. The senior officer also notes that "there was no
hesitation on the part of RCMP administration" at the force's Ottawa
headquarters to dedicate all the resources, both in manpower and funding,
to support his Bre-X Team.
Despite the extensive investigation, the RCMP and Crown prosecutors
realized a criminal case would be difficult to prove. The key stumbling
blocks were the vagaries of international extradition cases and the
reluctance of Bre-X's directors to cooperate, out of concern of jeopardy in
the civil class action cases in Ontario and Texas.
Even if the culprits could be dragged into Canada and key witness testimony
was provided, the Canadian prosecution stood little chance of proving proof
beyond reasonable doubt, the standard required in Canadian criminal courts.
"Both Alberta Justice and the RCMP are of the view, based upon a review of
that material, that there does not exist a reasonable likelihood of a
successful criminal prosecution of any suspects identified by the RCMP
investigation," states the RCMP in a backgrounder released by its K
Division, based in Edmonton.
The RCMP also notes that this conclusion was based on the best-case
scenario, assuming that "the evidence could be obtained through foreign
court proceedings and that the prime suspects could be extradited." Mr.
Macaulay prefers not to describe these "prime suspects," but he notes that
the key "persons of interest" were Mr. de Guzman's field team and Mr.
Felderhof. "Felderhof is a person of interest. . . on the scale interest,
he is a key figure," states Mr. Macaulay. The top cop notes that the Bre-X
exploration vice-president was both a key figure in the company and the
Busang property. "We cannot say he is a distinct suspect at this stage,"
says Mr. Macaulay.
Mr. de Guzman's key henchmen, dubbed Mike's Mighty Ducks in the media, were
Cesar and Manny Puspos, Manny Ortega and Bobby Ramirez. The foursome, all
Filipino nationals, are considered prime "persons of interest" by the RCMP.
The Canadian police, working with Indonesian authorities, examined workers
throughout the chain of custody of Busang samples, from the site to the
assay lab and transportation systems. "We looked at everybody and
everything," says Mr. Macaulay, who notes that the Filipinos and Mr.
Felderhof are the "individuals highlighted the most that would draw more
attention than others."
The RCMP's official backgrounder carefully names no names, nor hints at any
individuals, besides the reference to extraditable "prime suspects." "RCMP
investigators inspected the exploration site, the assaying lab and
interview the people involved in the transporation and processing of the
core samples. None of the witnesses were able to supply any information
directly linking someeone and/or any particular group of people to the
actual salting of the Busang core samples," states the RCMP in its official
communicae.
With the RCMP probe officially closed, other investigations by securities
regulators continue. The OSC told Stockwatch on Tuesday that its probe is
continuing and Mr. Macaulay said the SEC investigation is "ongoing." |
