.National Bank's P.I. serviced scores besides Weiss
2002-06-12 08:09 PT - Street Wire
by Brent Mudry
Most-wanted American financial fugitive Shalom Weiss, a notorious offshore client that Pacific International Securities denies servicing, was a major player in an OTC Bulletin Board promotion which featured numerous accounts at the controversial Vancouver brokerage. Pro Net Link Corp., now bankrupt, was under active investigation by the United States Securities and Exchange Commission in mid-1998, during a period when Pacific International was the brokerage of choice for Mr. Weiss and at least five other major company insiders.
Shalom Weiss, 47, also known as Sholam Weiss, appeared in U.S. District Court for the Middle District of Florida in Orlando on Tuesday, his first public appearance since he vanished on Oct. 18, 1999, the day before jury deliberations after a nine-month federal trial which resulted in a record 845-year sentence. He was a key player in the $450-million mortgage and real estate fraud of National Heritage Life Insurance Co., which was the biggest-ever criminal insurance fraud in U.S. history. (All figures are in U.S. dollars.) Mr. Weiss was extradited from Vienna, on Sunday, where he was tracked down and arrested on Oct. 24, 2000, after a year-long global manhunt featuring police in Israel, Brazil, Belgium, Germany, Hungary and Austria.
Mr. Weiss, once a respected member of New York's Hasidic Jewish community, shuffled into court wearing a bright-red jail jumpsuit, regulation thongs and matching leg shackles. While Mr. Weiss might get five years knocked off his massive sentence, as one of his dozens of charges, obstruction of justice, is not recognized under Austria's extradition treaty, he faces a new setback, according to Orlando Sentinel reporter Susan Clary.
The Department of Justice, stepping up to the plate for some hardball, is trying to yank Mr. Weiss's Miami extradition counsel, Sam Burstyn, because he defended another National Heritage convict, Isaak Rosenberg, who is married to one of Mr. Weiss's cousins. According to the Sentinel's Ms. Clary, Mr. Burstyn claims his fine client Mr. Weiss was illegally kidnapped and whisked out of Austria on a government jet Sunday, two weeks after he feigned a heart attack to dodge being shipped home on a scheduled commercial jet. "The only disease he has is prisonitis -- extreme fear of federal prison," retired FBI Special Agent Joe Judge told the newspaper.
Meanwhile, Stockwatch has uncovered more details of Mr. Weiss's dealings at Pacific International, a Vancouver brokerage charged last July by the British Columbia Securities Commission for servicing more than its share of stock crooks, securities violators and other dubious clients. In addition to vigorously defending the serious, but as-yet-unproven BCSC charges, Pacific International has denied Stockwatch's documented evidence, largely obtained through BCSC searches, that it ever serviced big-league racketeer and money launderer Mr. Weiss.
"Mr. Weiss is not and never has been a client of Pacific International," stated Vancouver lawyer Brian Baynham of Harper Grey Easton in a legal warning letter to Stockwatch in January. "This story and earlier stories of a similar vein have the potential of doing irreparable harm to my client's good name and reputation," he stated. Stockwatch has broken dozens of articles, dating back to early 1999, chronicling Pacific International's misfortune at being named as a stock or money laundering conduit in numerous U.S. indictments, criminal complaints and SEC prosecutions, duly noting the brokerage was never named as a target itself until the BCSC launched its prosecution a year ago.
While the public records of the BCSC's probe show Pacific International allegedly serviced Mr. Weiss through several offshore accounts, including Amex Corp., based in Geneva, and Dagon Developments, based in Israel, no details of stock trading have yet been revealed.
To help fill in the blanks for Mr. Baynham, he might be quite interested to look at Pro Net Link. The name of his client, Pacific International, is peppered in the National Association of Securities Dealers' list of Form 144 filings by company insiders who were keen to dump their holdings of Pro Net, or at least lighten their loads. Of the six brokerages noted, Pacific International is not only the sole Canadian house, but the busiest firm, with 26 entries, dwarfing runner-up Brown Brothers Harriman, with just eight.
Even more impressive is the breadth of Pacific International's client list. The Vancouver-based brokerage had accounts for no less than 22 separate clients, dominated by offshore and other European accounts. Oddly enough, none of the names of the Vancouver brokerage's clients are recognizable Vancouver, or even Canadian, penny stock players.
The first entry, dated May 29, 1998, is for a chap called Fode Diop, who filed to sell 110,000 shares. The busy Mr. Diop also filed to sell 20,000 shares on Sept. 3, 1998, 200,000 shares three weeks later, on Sept. 29, and a hefty 500,000 shares on Jan. 12, 1999. All four times Mr. Diop showed Pacific International Securities as his brokerage. While Mr. Diop's home address is not clear, someone using his name used a postbox address in Senegal in an unrelated penny stock promotion a year earlier. While Senegal might not seem like a major hotbed of international finance, Mr. Diop is doing his part to change this, serving as vice-president of the country's junior chamber of economics, which is like the junior chamber of commerce.
Next in line on the 144 list is Amex Corp., the offshore account the BCSC asserts is directly linked to or controlled by Mr. Weiss, despite lawyer Mr. Baynham's vigorous assertions. Amex Corp. filed to sell 200,000 shares of Pro Net Link on Aug. 26, 1998.
This was a particularly busy day, as two other Pacific International clients filed to sell a total of almost 600,000 shares. A company called Firstimpex filed to sell 385,000 shares, while Judith Lerner filed to sell 200,000 shares. Five days later, on Aug. 31, 1998, a fifth Pacific International client, Charles Neisenbaum, filed to sell 80,000 Pro Net shares.
The same day, a new brokerage appeared on the list: Millennium Securities Corp., whose client Nicole Peignier filed to sell 500,000 shares. Millennium showed up once more on the list, on July 15, 1999, when client Muriel Prochasson wanted to dump 500,000 Pro Net shares.
Millennium, based in New York, had the misfortune of being shut down by regulators a year ago. The NASD launched a prosecution on April 13, 2000, claiming the brokerage, its chief executive officer Richard Sitomer and its president Todd Rome made $5-million in illegal profits rigging the initial public offering of another penny promo, Translation Group, in December, 1996. The firm was expelled by the NASD on June 15, 2001, and clients face an Aug. 12 deadline to file claims with SIPC, the Securities Investor Protection Corp.
Besides servicing the most Pro Net insiders, Pacific International also serviced the biggest: a client called Pioneer Info Systems, which filed to sell 1.5 million shares on March 15, 1999. Pioneer Info also filed to sell 50,000 shares on July 7, 1999, again through Pacific International.
In addition to Mr. Diop, Mr. Weiss's Amex Corp., Firstimpex, Ms. Lerner, Mr. Niesenbaum and Pioneer Info, Pacific International also serviced numerous other Pro Net insiders who made 144 filings up to Sept. 30, 1999, including Usines Diffusion, Jean Scarpaci, Jean Emilio Mula, Bernard Zoller, Oliver Texier, Serge Touitou, Claude Delas, Andre Martinez, Gerald Testaniere, Roger Daveaux and Gilles Marret.
All this may seem to be much ado about nothing, but for two details. The first relates to the SEC, while the second relates to Mr. Weiss.
"In June, 1998, the Securities and Exchange Commission commenced an investigation of Pro Net Link relating primarily to the alleged manipulation of the market for securities of Pro Net Link, pursuant to a formal order issued by the SEC under the authority of Sections 20(a) and 21(a) of the Securities Exchange Act of 1934, as amended," states the company in a regulatory filing. "Pursuant to that formal order, subpoenas for the production of books, papers, documents and other records were served on Pro Net Link and on companies doing business with us. Testimony was required of Mr. Collardeau and Mr. Zagoren (Pro Net's top executives.)"
"Pro Net Link, Mr. Collardeau and Mr. Zagoren complied with the subpoenas and all related requests of the SEC in June and July 1998, and have received no further inquiries from the SEC regarding this investigation. We have no information as to the results, if any, of such investigation, whom the targets, if any, of such investigation were or may be, or what action, if any, the SEC may take pursuant to the investigation," states the company. Pro Net filed for bankruptcy last June, the same month Millennium was shut down for good.
Even more intriguing is Firstimpex, the Pacific International client which filed to sell 385,000 Pro Net shares on Aug. 26, 1998, the same day Mr. Weiss's Amex filed to sell 200,000 shares through the Vancouver brokerage.
In what can only be described as an amazing coincidence, Firstimpex also showed up as a major shareholder of Saf T Lok Inc. As Stockwatch has reported earlier, Pacific International serviced both mortgage fraudster Mr. Weiss, a key player in the fraudulent 1997 bulletin board promotion of Saf T Lok, and controversial fraudbuster, Anthony Elgindy, who exposed and shorted the promotion. (There is no suggestion Mr. Elgindy and Mr. Weiss were acting in concert or even knew each other.)
One of Mr. Weiss's chief Saf T Lok fronts was a friend, Arthur Braun, the president of United Safety Action Inc., a Saf T Lok distributor, and the owner of A. B. & Associates, a shell consultant related to Mr. Weiss's Regulation S offshore private placement.
In yet another tidbit of penny stock trivia, Mr. Elgindy is credited with exposing legendary Internet stock tout fraudster Tokyo Joe, who frequented Scores, the upscale New York Gambino family strip club which featured National Heritage as a major owner and Mr. Weiss as both a key backer and a regular patron. |
