Rampart Mercantile Inc - Street Wire
Rampart's Monardo upbeat after IDA bombshell
Rampart Mercantile Inc YRH
Shares issued 3,778,635 Aug 3 2001 close $ 5.50
Friday August 3 2001 Street Wire
Also Investment Dealers Association of Canada (*IDA) Street Wire
by Brent Mudry
Rampart Mercantile's planned $6-million all-share acquisition of BayStreetDirect is still on track and unaffected by the dark cloud hanging over the head of major subsidiary Rampart Securities, according to Dominique Monardo, the chairman and chief executive officer of Rampart Mercantile and former head of the brokerage.
"We'd like to proceed, but we haven't spoken to the other side," Mr. Monardo told Stockwatch on Friday.
Surprisingly, Mr. Monardo confirmed that Rampart has had no contact with BayStreetDirect a full day after the Investment Dealers Association of Canada, in one of its harshest prosecutions in recent memory, cited Rampart Securities and four executives, including himself, Thursday with numerous allegations of capital deficiencies, supervision and compliance lapses, and management action over a four-year period.
At best, the IDA bombshell comes at a particularly embarrassing juncture of Rampart's short history, as BayStreetDirect head Jim Beqaj is slated to become chairman of Rampart Securities and BayStreetDirect colleague Richard Nesbitt is set to become president and chief executive of the troubled brokerage. Both men have prided themselves on their impeccable Bay Street credentials and enjoyed much fawning and feting of BayStreetDirect by the media, especially Barry Critchley of the Financial Post and Andy Willis of The Globe and Mail. Now needed by Rampart more than ever, the timeliness of either the brokers' arrival or their cut-and-run from the deal should soon generate fresh oohs and aahs in the usual eavesdropperish style from the insider poopmeisters.
Mr. Beqaj, a much-titled, 21-year Bay Street executive, served as president of CIBC Wood Gundy in 1992 before jumping ship to rival Bank of Montreal's Nesbitt Burns, where he was vice chairman until early 1999 when he founded BayStreetDirect. His philanthropic and volunteer work includes a stint heading the IDA's capital markets committee.
Mr. Nesbitt, a bit of a title slouch compared with his partner, was the chief executive -- title unclear -- of CIBC Wood Gundy's American subsidiary and CEO -- that's clearer -- of HSBC Securities (Canada). As for the pair's new partner, Mr. Monardo, he was a mere auditor with Revenue Canada.
While Rampart Mercantile downplayed the charges in a Friday statement, suggesting Rampart Securities' troubles were "typically of a techical nature" and mostly took place two to four years ago, six of the nine cited capital deficiency periods have been in the last 23 months.
The latest and most concentrated shortfall, an $8-million capital deficiency from March 25 to May 29, stemmed from a single client account and was cleared up when the unidentified big-risk client ponied up funds to clear the big-whopper debit. Rampart blames this $8-million shortfall on a "purported clerical error" on the part of the mystery client.
The IDA, the self regulatory organization, booster and lobbyist for the brokerage industry, has quietly expressed concerns about Rampart Securities for more than four years, but its prosecution was launched just three days after Alex Popovic, a former RCMP commercial crime senior officer, began work in his new job as the IDA's vice-president of enforcement.
In its citation, the IDA has chronicled capital and compliance deficiencies at Rampart Securities dating back to early 1997, just after Rampart Mercantile acquired Merit Investment, a troubled, small 35-year-old Toronto-based brokerage which had taken a disastrous $1-million hit from offshore client accounts in a Vancouver-Calgary rig job. Rampart Mercantile bought Merit for just $1.2-million in August, 1996, and changed the brokerage's name to Rampart Securities in mid-1998.
Although Merit head Barry Kasman had the misfortune of watching his firm sink after being torpedoed by at least one barely supervised broker and a number of dubious offshore accounts, he went on to head Rampart Securities, which now finds itself accused of failing to supervise its brokers, verify identities of offshore account clients and other compliance troubles, including failing to take acceptable antimoney-laundering measures.
The IDA alleges Rampart Securities failed to supervise a number of its brokers, including Marc Guillemette and Roger Rambhajan, the only two mentioned by name. Mr. Guillemette and Mr. Rambhajan have both faced fraud-related criminal charges in recent years, although Mr. Rambhajan's charges were later stayed by the Crown and Mr. Guillemette's case remains before the courts.
Mr. Guillemette won a lifetime ban and a $110,000 fine from the IDA in July, 2000, after misappropriating five share certificates from a client and divvying them up into accounts of his mother, his father and an unrelated client.
Mr. Monardo also downplays suggestions that Rampart ran a loose shop in the supervision department. "How can you supervise every individual at all times? Let's be realistic," he says.
Merit had its own troubles, which ultimately drove it into the arms of Rampart.
In 1995, the brokerage's Toronto head branch took a million-dollar hit when regulators halted trading in Ultra Pure Water Systems (Canada) Inc., a wash-trading rig job masterminded by controversial Vancouver promoter Gordon Brent Pierce. The Ultra Pure ring left $2.36-million in unpaid debits at seven brokerages when the Alberta Stock Exchange abruptly halted the stock in March, 1995, led by $960,000 in debits in UPW accounts handled by Merit broker Stephen Traub.
Although Mr. Pierce's behind-the-scenes Ultra Pure involvement was first revealed by Stockwatch in April, 1995, rumours of Merit's million-dollar hit had already been the talk of Howe Street and Bay Street. A number of Mr. Pierce's fronts, including Ultra Pure president Grant Atkins and Harvey Gorsuch, key players in the promoter's former Vancouver Stock Exchange disaster, Cost-Miser Coupons, opened or dealt in dubious offshore accounts at Merit, although Mr. Pierce was careful to keep his name off any public documents for Ultra Pure.
The troubled brokerage embarked on an internal investigation, headed by executive vice-president Jeff Olin, in conjunction with chairman Barry Kasman. The Ultra Pure case was the feature of a major probe by the commercial crime section of the RCMP.
The Mounties capped up a 13-month criminal investigation in April, 1996, with a recommendation that charges be laid, but a Crown prosecutor subsequently "no-charged" the file, in a controversial decision. The RCMP received co-operation during co-ordinated searches of 13 brokerage firm offices in Vancouver and Toronto, and no brokers were named as targets of the police investigation.
Merit fired Mr. Taub over its million-dollar debit, and the broker soon landed at Brant Securities. He was fined a total of $60,000 by the Toronto Stock Exchange and suspended for a month.
After the Ultra Pure Water affair was all water under the bridge, Merit changed names to Rampart Securities.
Since salvaging the remains of Merit, Rampart has eagerly embarked on an expansion campaign with an eclectic mix of deals. The brokerage opened a Calgary branch office in February, 1999, and a branch in Fredericton, N.B., that June. (The IDA claims Rampart forgot to ask for the regulator's approval and blessing before opening the Fredericton branch.)
Last year, Rampart boosted its customer base by picking up 18,000 customer accounts of Marchment & Mackay, a notorious Ontario boiler room which flogged dubious Canadian Dealing Network stocks before being shut down by the Ontario Securities Commission. Most of the Marchment accounts were valued at less than $500. (The transfer of the Marchment accounts to Rampart was approved by regulators.)
Rampart now hopes to double its broker base to 200 within the next year or year and a half.
The brokerage's latest and greatest deal is its planned acquisition of BayStreetDirect, which has struggled to market initial public offerings and private placements over the Internet with a notable lack of success.
Rampart's visionary Mr. Monardo remains confident his brokerage can still consummate its $6-million acquisition of BayStreetDirect, but he suggests the transaction is not critical. "The deal is not a 'do-or-die' deal for us, it never was," he says.
While Mr. Monardo notes it is premature to comment on the impact of the IDA prosecution on the closing or terms of the BayStreetDirect acquisition, he is adamant about the $6-million pricetag. "We've been very fair with the pricing. The pricing will not change, I can assure you," he told Stockwatch.
Mr. Monardo also says that despite Rampart's four-year history of capital deficiency periods and SIPC's serious concerns, the risk to clients has been and still is "zero." "None of our clients have ever been at risk," he says.
The Bay Street executive also professes to be puzzled by the IDA's sudden decision to jump all over his firm. "This is not crimes of moral turpitude," he says.
Mr. Monardo reassures clients that Rampart Securities has not been "deluged by any problems" and "the company is strong."
"We're open for business as usual... same place, same channel."
(c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com
- Street Wire
OSC-aided SEC fines, bans Merit rig-job promoters
*USSEC
Friday September 21 2001 Street Wire
by Brent Mudry
In the latest American prosecution of a penny stock fraud featuring a Canadian penny stock brokerage as a key conduit, the United States Securities and Commission has charged two New York men and three associates with the early 1998 pump-and-dump rig job of Mountain Energy Inc.
The ring made at least $3.6-million in illicit profits trading shares through Merit Investments Corp., a trouble-plagued now-defunct Toronto brokerage. (All figures are in U.S. dollars.)
During the fraudulent promotion, Merit changed names to Rampart Securities, a subsidiary of Canadian Venture Exchange-listed Rampart Mercantile.
The Ontario Securities Commission is believed to have played a key supporting role assisting the SEC in its lengthy investigation.
In consent settlements, George W. Guttman and Joseph M. Blumenthal, both of Brooklyn, N.Y., were ordered to pay disgorgement of $1.35-million. Mr. Blumenthal, fined $350,000, also agreed to a permanent bar from participating in future offerings of penny stocks. Mr. Guttman, fined $1-million, agreed to a penny stock bar with liberty to reapply after five years.
The consent settlements were filed Thursday in conjunction with the filing of an SEC civil complaint in the United States District Court for the Southern District of Texas in Houston.
The other defendants include Donald John Christensen II and Jack E. Uselton, both of Houston, and Marc R. Tow, an attorney in Costa Mesa, Calif. Mr. Blumenthal's business partner, Karlton Zamost of New York, is named as an uncharged co-conspirator.
Several of the Mountain Energy participants are familiar faces in penny stock circles, including in Canada.
U.S. authorities noted that Mr. Guttman works as a consultant to several companies in the U.S. and Canada whose shares trade on the OTC Bulletin Board market.
Mr. Guttman worked as a broker at a series of U.S. firms between 1980 and 1996, when he began working as a consultant for a number of OTC companies, which later included International Casino Cruises Inc., Mountain Energy's predecessor.
In 1999, Mr. Guttman was permanently barred by the National Association of Securities Dealers from association in any capacity with any member firm, for making unauthorized transactions in a client's account. In June, 1999, he pleaded guilty in the Southern District of New York to a felony charge of making false statements to the SEC.
Mr. Blumenthal ended an eight-year brokerage career in 1996. Since then, he was worked as a purported consultant for several OTC companies, specializing in arranging financing and business combinations.
Mr. Christensen served as chairman and chief executive officer of International Casino until late May or early June, 1998. He had operated the public shell until a variety of names for three years. Mr. Christensen also now works as purported consultant to penny stock firms in the Houston area.
Mr. Tow, the California attorney, has been quite busy himself in the penny stock world, with his finger in a variety of deals. This spring, he received 1.5 million shares, an 8.7-per-cent stake, of World Am Communications Inc., a Colorado-based penny stock shell, purportedly as payment for his legal services.
In another deal in February, Mr. Tow's Pelham Associates Inc. gave an exclusive product and distribution licence for its domain name registration software to JustWebIt.com, a Utah-based penny shell, in return for five million shares.
The entrepreneurial lawyer appears to specialize in communications-related penny stock deals. In 1999, he received options for shares of Total Communications Inc., a company he formerly served as a director and lawyer.
Mr. Tow also popped on Howe Street in 1997, as a shareholder of Cancall Cellular, then listed on the former Vancouver Stock Exchange.
In its current complaint, the SEC claims the Mountain Energy quintet pulled off an illegal pump-and-dump operation.
During an eight-week period in the spring and summer of 1998, Mountain Energy issued six fraudulent press releases, allegedly authored variously by Mr. Christensen, Mr. Uselton and Mr. Tow, the lawyer. The false press releases misrepresented the ownership, nature and value of various mineral rights the company either acquired or was about to acquire.
Boosted by this lawyer-aided-and-abetted puffery, shares of Mountain Energy jumped from four or five cents in mid-May, 1998, to a peak of $1.75 by June 2, 1998. The daily trading volume was up to 30 times the average of the previous months. During a three-week period leading up to the peak, the average daily trading volume hit 7.4 million shares.
The SEC claims that Mr. Christensen authorized the issuance of more than 10 million shares, almost doubling the company's issued and outstanding tally at the end of 1997, to Mr. Guttman and his business partner Mr. Blumenthal.
"All three men immediately resold their stock in the open market for total profits of approximately $3.6-million. Guttman kicked back at least $896,000 of his profits to Christensen," state SEC attorneys Carleasa Coates, Tom Newkirk, Richard Sauer, Robert Besse and Juliet Gardner in the complaint.
Most of the group's millions of shares were funnelled into and laundered through Merit Investments in Toronto, in accounts of a series of dummy companies, including Mr. Guttman's Growth International and C. Saw Investments Ltd. Shares were also deposited in the name of Merit itself, which held the shares on Mr. Guttman's behalf.
This period, May and June of 1998, was a particularly auspicious one for Merit, a troubled Canadian brokerage. Merit was just in the midst of changing names to Rampart Securities Inc., with the change effective on June 11, 1998.
Last month, Canadian regulators shut down Rampart due to a host of problems. In one of its harshest prosecutions in recent memory, the usually slow, tame and lame Investment Dealers Association of Canada cited Rampart and four top executives with numerous allegations of capital deficiencies, supervision and compliance lapses, and management action over a four-year period.
The brokerage industry regulator, Canada's equivalent of the National Association of Securities Dealers, chronicled capital and compliance deficiencies at Rampart dating back to early 1997, just after it acquired Merit.
Merit, a small 35-year-old Toronto-based brokerage, was forced into Rampart's arms after taking a disastrous $1-million (Canadian) hit in 1995 from offshore client accounts in the Vancouver-Calgary rig job of Ultra Pure Water Systems (Canada) Inc. Rampart wound up buying the remains of Merit for just $1.2-million (Canadian).
The Ultra Pure wash-trading rig job, masterminded by controversial Vancouver promoter Gordon Brent Pierce, left $2.36-million (Canadian) in unpaid debits at seven brokerages. Merit was hit the hardest, with $960,000 (Canadian) in debits in Ultra Pure accounts handled by broker Stephen Traub.
While Merit chairman Barry Kasman had the misfortune of watching his firm sink after being torpedoed by at least one barely supervised broker and a number of dubious offshore accounts, he went on to head Rampart Securities, which was accused last month of failing to supervise its brokers, verify identities of offshore account clients and other compliance troubles, including failing to take acceptable antimoney-laundering measures.
Ultra Pure, Mr. Pierce and his associates, meanwhile, were the subjects of an extensive criminal investigation by the Commercial Crime Section of the RCMP. After spending years and extensive taxpayer resources preparing a solid case, the RCMP handed over the file to a senior Crown prosecutor a few years ago.
In a controversial move that remains an open wound between the RCMP and the Crown, the prosecutor "no-charged" the case, basically torpedoeing the investigation, on the grounds there was insufficient evidence for a conviction. The prosecutor has since been demoted to handling welfare fraud cases.
Vancouver law enforcement authorities, however, were so enamoured with one of Mr. Pierce's closest Ultra Pure associates that they hired him in a trusted high-ranking position to handle tens of millions of taxpayer dollars.
In the SEC case, one of the most intriguing characters is an uncharged co-conspirator, Mr. Blumenthal's business partner Mr. Zamost.
(Amongst other common ventures after Mountain Energy, Mr. Blumenthal and Mr. Zamost served as executives or consultants with J.B. Marc and Associates, a New York investment banking firm, in 1999.)
In an unrelated deal, Mr. Zamost popped up on Howe Street in mid-1995, in a brief stint as an advisory board member for Robert B. Klein's Beecher Energy Ltd., when the tiny Vancouver company, listed on the former Vancouver Stock Exchange, hired Russo Securities, a New York Stock Exchange member, for purported investment banking assistance.
Later that year, tiny Beecher, which had a handful of oil and gas exploration leases in Oklahoma and Kansas, embarked on a plan to set up a casino on the Chinese island of Hainan, as well as exploit the island's gold, tin and lead deposits.
Internet tout George Chelekis of the Hot Stocks Review claimed that "one of the world's most famous investment names" was about to jump into Beecher, lured by the exciting potential of the Chinese casino project.
Alas, even with George, king of the touts, on board, Beecher could not make it above the 90-cent level, half its $1.92 peak the previous year, and the Chinese casino promotion crapped out. (All Beecher prices are in Canadian dollars.)
A few years later, in early 1997, Mr. Chelekis, who touted for pay scores of penny stocks besides Beecher, including many in Vancouver, was fined $163,000 by the SEC, which claimed he "recklessly made materially false and misleading statements," among other transgressions.
Russo, a small brokerage on Staten Island in New York, also had its share of troubles with regulators, with Mr. Zamost mentioned in at least one case.
After an SEC investigation in the spring of 1996, Russo and two principals were fined a total of $150,000 in early 1999 for net capital violations after boosting its capital with three questionable penny stock holdings.
Brokerage president and chief executive officer Patrick Russo was banned from the industry, with liberty to reapply after two years.
Mr. Zamost, described as a Russo Securities "consultant" who knew the Russo brothers for more than 20 years, was a star witness for the defence, but his testimony was discredited as it was contradicted by sworn testimonials and other documentary evidence.
In early 1997, Russo Securities and co-owner Ferdinand Russo, Patrick Russo's brother, were charged by the SEC with aiding and abetting a fraud by providing a sham reset opinion to help a client, Cooper Companies Inc., manipulate its $200-million issue of high yield bonds in 1991.
The SEC claimed Russo's opinion contained numerous false and misleading statements, and the document, printed on Russo letterhead, was actually drafted by an employee of Cooper.
After an extensive hearing, Russo was found not guilty. Russo's regulatory record dates back to at least 1993, when it was censured and fined by the NYSE for a number of violations, including failing to maintain adequate net capital and filing inaccurate reports.
Nine months later, in September, 1994, the small brokerage was sanctioned by the Office of the Secretary of State Securities Division for the State of Massachusetts, for filing false or misleading documents in its application for registration in the state.
The closely watched firm was cited twice in 1998 by the NYSE for net capital violations.
In the most recent run-in with authorities, last December three Russo brokers were acquitted in an insider trading trial, while four clients who made illicit profits trading shares of Lotus Development Corp. in 1995, were among 22 members of a tipping network found guilty.
(c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com
Securities and Exchange Commission - Street Wire
SEC, feds target Cons. Fortress ex-president Andrews
Securities and Exchange Commission *SEC
Tuesday November 13 2001 Street Wire
See Consolidated Fortress Resources Inc (CFR) Street Wire
by Brent Mudry
While Vancouver broker Trevor Koenig of Union Securities has been the star Howe Street target of American authorities in the past three months, London-based penny stock promoter Graham Andrews, Colorado broker Eugene Geiger and Spanish-based Dutch financier Alfred Peeper have also emerged in starring roles in the past month.
The trio are named as defendants in the United States Securities Exchange Commission's prosecution of Absolutefuture.com, while Mr. Andrews is also named in a related criminal complaint regarding the OTC Bulletin Board promotion, one of Mr. Koenig's rig jobs.
Mr. Andrews quietly stepped down as president of Consolidated Fortress Resources Inc., a Canadian Venture Exchange promotion on Oct. 26, more than three weeks after he was named in an Oct. 1 sealed criminal complaint filed in the Southern District of New York. The Absolutefuture.com complaint was unsealed by Oct. 3, when the other criminal defendant, New York penny stock promoter Roger DeTrano, was arrested.
Michael Graye was arrested the next day, Oct. 4, in a separate SDNY criminal complaint with Mr. DeTrano, who allegedly conspired to help the controversial Vancouver accountant rig his embryonic Vinex Wines promotion. Mr. Andrews, Mr. DeTrano, Mr. Graye and Mr. Koenig, arrested crossing the border on the Labour Day weekend, were all snared in co-ordinated stings featuring the same dirty promoter-turned-informant. (By coincidence, Mr. Graye and Mr. Andrews both have dual citizenships in the exotic offshore enclave of Monaco.)
The SEC troubles of Mr. Andrews came as a surprise to the folks at Cons. Fortress, according to company lawyer James Harris of Watson Goepel Maledy. "We all know him to be a person of great integrity. We are all quite shocked," Mr. Harris told Stockwatch on Tuesday. "Our understanding is that he has to spend his full time fighting that full situation to protect his reputation."
Lawyer Mr. Harris confirms Mr. Andrews faxed his resignation in late October, and there have been a number of E-mails back and forth since then, with company officials offering their support to their hastily departed president. Neither Mr. Harris nor rookie replacement president Ali Alibhai were aware of the criminal prosecution of Mr. Andrews until informed by Stockwatch.
"We really know nothing about the Absolutefuture situation," says Mr. Harris. The corporate counsel explains that Mr. Andrews is an "oil guy," and Cons. Fortress is no longer an oil and gas promotion.
Mr. Andrews had been a senior director of Cons. Fortress and its predecessor, Fortress Resources Inc., since April, 1997, and served stints as its president since about 1999. The controversial financier acquired a 27-per-cent stake in Fortress in 1997 by buying the company's 750,000 escrow shares.
In recent years, Mr. Andrews has been a familiar face in deals on Howe Street, the centre of dealings for the former Vancouver Stock Exchange, which was dubbed Scam Capital of the World by satirist Joe Queenan in Forbes magazine a decade ago. Mr. Andrews has served directorship stints with a number of penny stock companies listed on the Canadian Venture Exchange, its predecessor the Vancouver and Alberta stock exchanges, and the Montreal Exchange.
The British businessman had a rather odd career trajectory, slipping into the penny stock world after achieving some success in more distinguished quarters. According to regulatory filings, Mr. Andrews graduated with a first-class honours degree in mathematics at Oxford University and a PhD in mathematics from a university in Edinburgh. After that, the mathematician moved on to senior corporate finance positions with such blue-chip firms as British Petroleum, Chase Investment Bank, NatWest Bank and W I Carr, which is part of the Banque Indosuez Group.
Mr. Andrews then took his upper-crust credentials to the penny stock hotbed of Howe Street, where he apparently kicked off with a one-year stint in 1992-93 as a director of Robert G. Hunter's ADI Technologies Inc., starting soon after ADI's debut on the VSE and leaving just before secretive Swiss financier and purported money launderer Carlo Civelli's Clarion Finanz AG emerged as a major shareholder.
After getting his feet wet on Howe Street, Mr. Andrews popped up a few years later, in 1995-96, as a director of Robert Atkinson's Dimitra Developments Corp., renamed Jeda Petroleum Ltd. In 1999, Mr. Andrews also joined the board of another Canadian penny stock promotion, Vantex Oil, Gas & Minerals Ltd., which moved from the Montreal Exchange to the CDNX on Oct. 1, and he recently served as chairman of York Energy Ltd., which is listed on the OFEX Trading Facility in London.
Until Mr. Andrews's troubles with U.S. authorities came to light, Cons. Fortress's most notable directors were Richard Bullock, who replaced Sydney Belzberg as president of the VSE shell in April, 1995, and headed the company until passing the reigns to Mr. Andrews in about 1999, and his son Craig Bullock.
The father-and-son Bullocks resigned as Cons. Fortress directors in June, 2000, coincidentally two months after some unflattering coverage by The Vancouver Sun. Reporter David Baines revealed that Keith King, a former Nevis stockbroker wanted on fraud and forgery charges in South Africa and kicked out of the Isle of Man, had set up shop in Vancouver and had apparently hired Craig Bullock.
The sole officer of Mr. King's Vancouver-based FN Services (Canada) Ltd., an apparent derivation from the fugitive's Nevis-based First Nevisian Stockbrokers Ltd., was the junior Bullock. The Sun noted that father Richard Bullock, although not accused of any wrongdoing, was a close associate of Gary Stanhiser of California, the former Seventh Day Adventist minister who fleeced his flock through an illegal offshore private placement on Howe Street and was banned from the B.C. stock market for life by the British Columbia Securities Commission.
This March, Stockwatch and The Sun reported that Richard Bullock was dubbed a shill for controversial offshore consultant Jerome Schneider in a detailed unsealed Internal Revenue Service affidavit. The document, supporting a search warrant raid on the Vancouver offices of Mr. Schneider, referred to Mr. Bullock as a key associate of Mr. Schneider, fronting for the consultant's Premier Corporate Services Ltd. and Premier Management Services Ltd.
"On paper, it will show that Bullock owns the majority of the shares of stock of these companies while Schneider owns a minority share. The corporations are set up this way so that it appears that Schneider doesn't own or control them," stated IRS Special Agent Harold Durrette in a 44-page affidavit, sworn before United States Magistrate Judge Carla Woehrle in U.S. District Court for the Central District of California.
(Jack Blum, who kicked off the Schneider investigation in January, 1997, told Stockwatch at an international money-laundering conference in Vancouver in the fall of 2000 that Mr. Schneider had reportedly last been seen in Mexico City. Mr. Blum, an offshore finance and money laundering expert, is best known as a key investigator for the U.S. Senate Foreign Relations Committee on the Bank of Credit and Commerce International probe.)
Prior to shilling and fronting for Mr. Schneider's Vancouver operations, Mr. Bullock had the misfortune of appearing in various controversial B.C. cases in recent years. The BCSC sought records from a Vancouver law firm on now-defunct Vancouver brokerage Vantage Securities, regarding an alleged March, 1998, asset diversion from Vantage, allegedly involving fraudster Mr. Stanhiser.
Mr. Bullock has also served stints as a director of various companies listed on the former VSE, and he stepped in as a director of Ultra Pure Water Systems (Canada) Inc. in May, 1995. This was two months after the former Alberta Stock Exchange halted trading in shares of the controversial promotion of Gordon Brent Pierce and referred the case to the RCMP for a 13-month criminal investigation.
Mr. Bullock was not a target in the criminal or regulatory probes of Ultra Pure, or any other probes.
In the serendipity of Howe Street, offshore connections and mysteries are often intertwined.
The star client of Union Securities broker Trevor Koenig, in the Absolutefuture.com rig job, which featured Cons. Fortress's Mr. Andrews, the New York Mafia-linked promotion of WAMEX Holdings Inc. and related bulletin-board rig jobs was career fraudster Edward Durante, whose record of run-ins with U.S. authorities dates back 26 years. Mr. Durante funnelled most of his Union proceeds through a money laundering account at Bank of Montreal's main Vancouver branch, held by Itex Corp. fraud mastermind Terry Neal's Exchange Bank & Trust.
Mr. Neal founded EBT in Nevis and nearby Nauru in the wake of the Itex fraud, and he purportedly relocated to Nevis himself for a while. Nauru was also the prime offshore domicile used by Mr. Schneider, who was fronted by Mr. Bullock, another former president of Cons. Fortress.
Although Mr. Schneider and Mr. Neal both ostensibly operated through sham banks in Nauru and allegedly recruited potential clients in Vancouver, their operations appear to be independent.
(c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com |
