In one of the most intriguing twists, one of the offshore companies, Hemsley Finance Ltd. of Jersey in the Channel Islands, ended up as a significant shareholder of Iran-Contra key figure Oliver North's controversial stock promotion, Guardian Technologies International Inc.
Pertacal ex Bloomfield, ally Creggy get probation, fine
2003-02-11 17:25 PT - Street Wire
Also (U-*SEC) Securities and Exchange Commission
by Brent Mudry
Prominent Montreal criminal lawyer Harry Bloomfield, who faced the prospect of several years in jail for his 21-year career aiding offshore stock fraudsters, will not have to spend a day behind bars, thanks to the ill-health card played by his partner-in-crime, London solicitor Stuart Creggy, 63. In a two-hour sentencing hearing Tuesday in New York, the pair of crooked lawyers were each sentenced to five years probation, a token $5,000 fine and 500 hours of community service. (All figures are in U.S. dollars.) The indictment covers an impressive 21-year span, from Jan. 1, 1980, through March 20, 2001, bridging a two-decade period which saw Mr. Bloomfield, 58, serve in high positions with numerous organizations, including the Quebec Securities Commission.
Mr. Creggy, who maintains a residence in West Palm Beach, Fla., may also be subject to deportation, which cannot be a pleasant prospect, as he faces an arrest warrant issued in mid-2001 in Britain not covered by extradition treaty. His former law partner, Andrew Warren, is currently fighting an surrender order issued last fall by the British Home Office, for extradition to New York on a case similar to the Bloomfield-Creggy matter, an enterprise corruption indictment dating back to 1999.
Mr. Bloomfield, a once-respected prominent member of Montreal's Jewish community, collects titles like lesser mortals collect postage stamps, including stints as a commissioner of the Quebec Securities Commission from 1981 to 1987, a Quebec member of the Business Development Bank of Canada from 1987 to 1996, and chairman of the Business Development Bank from 1987 to 1991. During his BDBC reign, Mr. Bloomfield also served as a director of Cycomm International, a malodorous Howe Street penny stock promotion which featured Australian expatriate promoter Phil Garratt.
Mr. Bloomfield has also served as Honorary General Consul of Liberia in Montreal, while Cycomm associates Mr. Garratt and Irwin Singer hold similar titles in Vancouver and Toronto, respectively. The criminal lawyer abruptly resigned from the board of Pertacal Energy, a penny promotion on the former Alberta Stock Exchange, after Stockwatch revealed his criminal plight in April, 2001. Mr. Bloomfield was a senior partner of Bloomfield Bellemare, a once highly-respected Montreal law firm, although partner Dominique Bellemarre, not named in the indictment, left the firm in 1998.
Judge Bernard Fried of the New York Supreme Court in Manhattan handed down the surprisingly light sentences after agreeing with defence counsel that Mr. Creggy, currently in remission from leukemia, might be at risk if he was sent to jail. Judge Fried sentenced Mr. Creggy first, noting his health concerns, then stated it would be unfair if Mr. Bloomfield was sent to jail, as Mr. Creggy was equally or more culpable in the offshore shell scheme.
The sentence was a win for defence counsel, who sought a conditional discharge, a fine similar to that imposed and a term of community service. The prosecutor, Assistant District Attorney Clark Abrams, sought the maximum for the charges, a sentence in the range of two years -- either consecutive one-year definite sentences for felony and conspiracy, or an indeterminate sentence of 1-1/3 to four years.
The Bloomfield-Creggy sentences are a rare setback for Manhattan District Attorney Robert Morgenthau, the most aggressive stock market prosecutor in the United States since Rudy Giuliani cut a swath through Wall Street in the Boesky-Milken era.
Mr. Bloomfield and Mr. Creggy were convicted on Nov. 21 of 16 counts related to conspiring to aid crooked clients in breaching securities regulations and tax laws. Prosecutors claimed the once-respected Montreal and London lawyers were key participants in an international stock fraud conspiracy operating in New York and Britain, related to A.R. Baron & Co. Inc., a now-defunct Mafia-linked brokerage described as a notorious boiler room by the United States Securities and Exchange Commission. The criminal Montreal and London lawyers used companies and bank accounts established in a number of secretive offshore havens, including Liberia and Belize.
Mr. Creggy also reportedly set up offshore shell companies in Jersey used for Russian money-laundering operations in the Bank of New York scandal in 1999, but this was not central to the current prosecution.
Three key associates have already pleaded guilty to attempted enterprise corruption: George A. Carhart of New York, chairman of Westfield Financial Services, the late Salvatore J. Mazzeo of Old Westbury, N.Y., the president of the company, and James E. Cohen of Lattington, N.Y., a consultant. The late Mr. Mazzeo pleaded guilty on Oct. 30, 1997, followed by Mr. Cohen on Aug. 18, 1998, and Mr. Carhart on July 22, 1998.
Another major associate, Felice F. Mischel, a partner in New York law firm Schneck Weltman Hashmall & Mischel, pled guilty on Jan. 22, 1999, to offering a false instrument for filing. Mr. Mischel acted as legal counsel to several of the public companies that sold shares in the massive Regulation S diversion scheme to the offshore Liberian and British Virgin Islands companies owned by Mr. Carhart, Mr. Cohen and Mr. Mazzeo.
U.S. officials note their New York portion of the Bloomfield-Creggy investigation began with the probe of A.R. Baron, a corrupt brokerage. After Baron and its officials were indicted, the London portion of the probe was launched. The A.R. Baron prosecution's targets included Bear Stearns Securities, the boiler-room's clearing house, and Richard Harriton, the president of Bear Stearns Securities. Mr. Harriton's career was destroyed after he was fined $1-million in August, 1999, in a negotiated settlement with the SEC for aiding and abetting scores of A.R. Baron's securities violations.
Mr. Bloomfield also allegedly helped tax evaders, including one client who hid $400,000 from Revenue Canada, now known as the Canada Customs and Revenue Agency. The Montreal lawyer likewise helped paper the file for his Middle Eastern banker client to cover up the fact the banker was "receiving extremely large amounts of compensation from a client with whom he was working while at the bank," according to U.S. officials. In one of the most intriguing twists, one of the offshore companies, Hemsley Finance Ltd. of Jersey in the Channel Islands, ended up as a significant shareholder of Iran-Contra key figure Oliver North's controversial stock promotion, Guardian Technologies International Inc. |
