Tuesday, December 17, 2019

B.C. seeks to seize Salt Spring property allegedly linked to fraud

The province has filed a lawsuit seeking to seize another property allegedly linked to a $200-million-plus international stock fraud.

The $2.4-million property on Salt Spring Island, north of Victoria off the east coast of Vancouver Island, is added to two properties the B.C. Civil Forfeiture Office is already pursuing in the Kelowna area.
The forfeiture lawsuit filed in B.C. Supreme Court on Dec. 11 alleges the Salt Spring Island property at 391 Baker Rd. is the proceeds of crime and was used to launder money.

Named in the civil suit are Geordie Lee, also known as Skye Lee; Alicia Lee; and Vincent Manalastas, the sole director of Beresford Estates Inc., the listed owner of the Salt Spring Island property.
The Lees live on the property, while Manalastas is believed to live in the Philippines, according to the lawsuit.

“Beresford was used in British Columbia to: (a) receive and distribute proceeds of the unlawful scheme to or on behalf of one or more of Mr. Lee, Mrs. Lee, and Mr. Manalastas; and (b) acquire or make improvements to the property,” alleges the claim filed by the forfeiture office.
None of the defendants has responded to the civil lawsuit. It contains allegations that have not been proven in court.
Other accusations in the suit levied against the Lees and Manalastas include offences under the U.S. Securities Act, the U.S. Exchange Act and the B.C. Securities Act. Also alleged in the lawsuit are fraud, affecting the public market price of stocks and failure to declare taxable income.
In 2018, a U.S. Securities and Exchange Commission investigation uncovered a US$165 million pump-and-dump stock fraud that used shell companies to hide the true and beneficial owners of shares.
In a pump-and-dump scheme, stock fraudsters falsely promote a penny-stock and then sell off their chunk of the shares when the price rises. The stock then often plummets, leaving other shareholders with a loss.
This alleged stock fraud involved as many as nine countries and money was moved through 18 banks including in Canada and more than a dozen brokers, according to filings in U.S. court proceedings. At least one person involved in the scheme has pleaded guilty to securities fraud and money laundering, while two other key players face securities and criminal charges in the U.S., according to the SEC.
The B.C. forfeiture lawsuit alleges that proceeds from the pump-and-dump scheme were used to purchase the Salt Spring Island property and undertake $526,000 in renovations. The renovation money was delivered in seven wire transfers, according to the suit.
B.C. property records show the house was purchased in 2014 in full for $1.16 million with no mortgage. It’s assessed value in 2019 is $2.41 million.
In a lawsuit filed in B.C. Supreme Court last summer, the B.C. Civil Forfeiture Office alleged an $1.6-million house on Mission Ridge Road in Kelowna and a $524,000 condo at nearby Big White ski resort are proceeds of crime and should be forfeited.
Those properties were also linked to the U.S. stock fraud, the forfeiture office’s lawsuit alleged.
The properties are owned by Cuatro Cienagas Inversiones Ltd., incorporated in Hong Kong in January 2017 and registered in B.C. three months later as an extra-provincial company.
Named in that suit are Benjamin Thomas Kirk and Kayley Tyne Johnson, last known to live in Kelowna, and Carlos Gomez Brana of Mexico.
In their legal responses, the trio deny any knowledge of the stock fraud, deny laundering money using the Kelowna properties and say the civil forfeiture claim should be dismissed.

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