BCSC Eron figure Chambers no money launderer
B.C. Securities Commission *BCSC
Wednesday February 5 2003 Street Wire
by Brent Mudry
Controversial former Vancouver lawyer Martin Chambers is pulling out all the stops in his latest bid to get released on bail after more than five months in jail in Miami since his arrest as a key target in the Bermuda Short money laundering sting. Los Angeles celebrity defence lawyer Donald Re has filed affidavits from two Vancouver lawyers, Robert John Palkowski, a player, like Mr. Chambers, in the Marlat Resources debacle a decade ago, and Barry Promislow, who has known Mr. Chambers since 1980, back when the alleged money launderer was starting his 10-year battle against cocaine conspiracy charges in Canada.
Both lawyers, who have worked for Mr. Chambers, attest that they saw no prior evidence of money laundering before his unfortunate snaring in Bermuda Short.
Mr. Re, the star defence lawyer for Mr. Chambers, is fighting hard to overcome what he claims is a 23-year smear campaign waged on his unfortunate client by the RCMP. In the earlier bail round, the government claimed Mr. Chambers is an organized crime associate, is on friendly terms with the Hells Angels, the image-challenged organization of entrepreneurial biking associates, and ordered the contract killing of a major cocaine conspiracy figure. More recently, the government claims it has to relocate a figure in Mr. Chambers's money laundering case due to a serious threat.
To attest to the fine character of Mr. Chambers, and show that he would never stoop to money laundering, Mr. Re has now filed affidavits from Mr. Palkowski and Mr. Promislow, "each attesting to having represented Martin Chambers over the years in legitimate business enterprises."
Mr. Re notes these latest Chambers testimonials buttress previous letters from such supporters such as ranchland developer Derek Trethewey, who hopes to bid on Worldcom ex-head Bernie Ebbers's massive ranch, and Vancouver lawyer David Lunny, a principal of Devlin Jensen, who has represented him for several decades, including a threatened libel suit against Stockwatch.
"Martin Chambers is highly respected by those who know him," states Mr. Re, summarizing the earlier character letters. "These numerous letters of support are from reputable and distinguished friends, lawyers and business associates who have worked with and/or represented Martin Chambers over the years in his legitimate business enterprises."
Mr. Re takes particular issue with the assertion by Assistant United States Attorney Richard Hong, the lead prosecutor, that Mr. Chambers's "business is money laundering." "These filings contradict AUSA Hong's flagrant misrepresentations suggesting that Chambers's only business is money laundering," states Mr. Re.
Of the two affidavits, Mr. Promislow's is the shortest, a mere few lines. Mr. Promislow confirms that he has known Mr. Chambers since 1980. "I have taken instructions from Martin Chambers and proceeded to act as a barrister in litigation matters from time to time," states Mr. Promislow. "In all of these matters I have seen no indication of money laundering."
Mr. Palkowski offers much stronger support of Mr. Chambers in his affidavit, noting he has done "commercial solicitor's work" for the alleged money launderer for at least 10 years. "The work I did for Martin Chambers was the purchase of property, refinancing of existing property, some litigation and Maritime law," he states.
"I have never seen any indication that any monies paid into my trust account or otherwise paid to me were the proceeds of drug transactions or of any other illicit transactions. I have seen no indication of money laundering," states Mr. Palkowski.
"As a member in good standing of the Law Society of British Columbia, I would have an obligation to cease acting if I had seen anything to indicate money laundering. All of the transactions I undertook on behalf of Martin Chambers were normal commercial transactions."
(Although not noted, the B.C. Law Society and other provincial bar associations are vigorously fighting Canada's new money laundering law, and have won a temporary injunction exempting their members from ratting on clients in breach of solicitor-client privilege.)
While Mr. Promislow has enjoyed a relatively good reputation in Vancouver as a respected lawyer, Mr. Palkowski has the misfortune of carrying some baggage. Although quite dated now, Mr. Palkowski even had some troubles with the law society which took away his "member in good standing" status for a while.
The B.C. Law Society suspended Mr. Palkowski for 18 months in 1984 for "professional misconduct and conduct unbecoming." In a Nov. 7, 1984, decision, the law society found Mr. Palkowski guilty of professional misconduct for writing a letter which threatened criminal proceedings and guilty of conduct unbecoming for making false statements under oath in the disciplinary proceeding.
The case dated back to Jan. 9, 1984, just after Mr. Palkowski's sixth anniversary as a practising lawyer. On that date, Mr. Palkowski, representing a club or society as client, sent a letter a club official, Bela Lorincz, in a dispute over $2,609 withdrawn from the society's bank account on Nov. 3, 1983, allegedly without authorization. (No criminal prosecution was ever launched in the matter.)
In the threatening letter, Mr. Palkowski demanded the return of the disputed funds, all books, records and files of the club, and all club equipment in the possession of Mr. Lorincz. While the law society takes a dim view of lawyers making threats of criminal action, Mr. Palkowski had an explanation, the blame-it-on-the-secretary defence.
Unfortunately, Mr. Palkowski's secretary had a different recollection of the facts, and was found to be a more credible witness. "We had the impression from her evidence and her demeanour in giving it that although she was as protective of her employer as she honestly could be, she was a reliable and straightforward witness. Accordingly we accept her evidence rather than that of the member (Palkowski) wherever their evidence conflicts," stated the benchers.
Seven years later, with this law society matter all in the past, Mr. Palkowski popped up as a director of Marlat Resources, a former Vancouver Stock Exchange promotion which featured Mr. Chambers, promoter Robert Bozo Lalich and financier Paul Deyong. Marlat, which touted a proposed deal to market Russian helicopters in North America, was a highflier on the VSE in 1993.
(Mr. Lalich was acquitted in the late 1980s in the manipulation of Audit Resources after crucial wiretap evidence was thrown out. He was later convicted in 1991 of stealing $179,000 from another Canadian penny stock deal, Payday Resources, and ordered to endure four months of electronic monitoring.)
Other Marlat players included Howe Street promoter Bram Solloway, who was involved in one company recently promoted by Wally Dekanich, the small-time stock promoter shot dead in North Vancouver in January, 2001, in a hit believed linked to the Hells Angels.
In June of 1997, a notable client-associate of Mr. Deyong, former Hells Angel leader Ernie Ozolins, was executed. Mr. Ozolins and his girlfriend Lisa Michelle Chamberlain were shot to death in his West Vancouver home, a pricey residence which had been financed by Mr. Deyong.
In early 1997, Mr. Palkowski had his own troubles, when the British Columbia Securities Commission made serious allegations against him and Vancouver-area businessmen Daniel Maarsman and Lorne Laatsch, related to dealings in shares of Continental Waste Conversion Inc., listed on the former Alberta Stock Exchange, and Canadian Superior Oil Inc., an unlisted company.
Mr. Maarsman, now 69, was later banned for five years, including a prohibition on engaging in investor relations activities or serving as an officer or director of any public company. Mr. Laatsch, who admitted to perpetrating a fraud on the investor, using Mr. Palkowski's services, was banned for seven years, including a prohibition on engaging in investor relations services or serving as an officer or director of a public company. Both were also fined $5,000. The BCSC adjourned its case against Mr. Palkowski.
Within a year of Mr. Laatsch and Mr. Maarsman entering their regulatory guilty pleas, the banned market players, along with Ranbir (Ron) Dhaliwal, a banned broker, were introduced by Mr. Palkowski in mid-1998 for an Indonesian vend-in relating to Fortune Oil & Gas.
Mr. Dhaliwal managed to get banned for life by the former VSE, a rare honour bestowed on only the exchange's most deserving members, and to score a personal paper fine of $270,000, in addition to the $125,000 fine imposed on his former employer, now-defunct brokerage Brink Hudson & Lefever Ltd. Mr. Dhaliwal's official VSE file dates back to Oct. 29, 1996, when the exchange's executive committee issued a rare interim order, immediately suspending the broker's exchange registration. Two days later a formal citation was issued, with a hearing set for Jan. 8, 1997.
The hearing did not last long. Mr. Dhaliwal arrived at the first day of the disciplinary proceedings with a settlement offer in which he agreed to a permanent withdrawal of VSE approval, payment of a fine of $100,000, disgorgement of "inappropriate" commissions of $125,000, and assessment of investigative costs of $45,000. In its Jan. 16, 1997, notice to members, the VSE noted that Mr. Dhaliwal's career-ending offence was that he "accepted remuneration" from someone other than his employer, Brink Hudson, in respect to activities in connection with the sale or placement of shares of Hollywood Trenz Inc., an OTC Bulletin Board promotion.
While the exchange noted this unusual remuneration consisted of 20,000 shares of Hollywood Trenz, there is no allegation of bribing, greasing or juicing in VSE's official notice.
The VSE also revealed that Mr. Dhaliwal had opened accounts for a client with a criminal record involving securities-related convictions. Naturally, no mention was made of the crooked client's name.
Brink Hudson was not exactly in the dark. "In September, 1993, Brink, aware of a client with a criminal record for security-related convictions, accepted the client with their firm. Brink, having accepted the account failed to adequately supervise the client's activities," stated the exchange. While the mystery felon-client's account was inactive by April, 1994, Brink continued to permit the crook to attend its offices without question.
The VSE also revealed that Mr. Dhaliwal's misconduct was far broader than he was earlier given credit for. The exchange noted that Mr. Dhaliwal was broker central for a dubious local promotion, Auriga Resources Inc. The Auriga trading handled by Mr. Dhaliwal was impressive. With enough shares in Auriga nominee accounts to constitute a control position, Mr. Dhaliwal handled more than 400 trades in unauthorized third party accounts, for a total of $2.27-million. In 17 related client accounts, Mr. Dhaliwal handled almost 3,200 trades for a total of $12.24-million. The nominee fronts had no clue what was going on in their accounts.
With all this baggage hardly a secret in Vancouver penny stock circles, Mr. Dhaliwal soon after emerged in the Fortune Oil deal.
In early 2001, Fortune launched a $15.37-million (U.S.) suit over 14.1 million disputed shares. In a 19-page court filing, Fortune sued Mr. Palkowski, his firm Palkowski & Co. Law Corp., Mr. Dhaliwal, Mr. Maarsman, Mr. Laatsch, and offshore lawyer Philip Johnston of Johnston and Associates, who operates out of an office located on aptly named Front Street on the island of Grand Turk in the Turks and Caicos Islands.
bmudry@stockwatch.com
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