(File Photo)

Kelowna properties tied to alleged $220M in stock fraud

B.C. Civil Forfeiture Office wants to seize $1.6-million Kelowna home and $524,000 Big White condo

A $1.6-million home in Kelowna on Mission Ridge Road and a $524,000 condo at Big White Ski Resort are alleged to have been bought with money from a stock fraud scheme that garnered nearly $220 million.

In a lawsuit filed in B.C. Supreme Court, the B.C. Civil Forfeiture Office claims the properties are “proceeds and instruments of unlawful activity” and should be forfeited.

Benjamin Thomas Kirk, Kayley Tyne Johnson and Carlos Gomez Brana are alleged to have set up the company that owns the properties – Cuatro Cienagas Inversiones Ltd., or CCIL – to receive and distribute funds from a stock fraud scheme.

The last known residence of Kirk and Johnson was the Mission Ridge property, while Brana is thought to be in Mexico, according to the document.

READ MORE: Feds invest a quarter million into B.C. cherry industry

READ MORE: One cyclist dead after being struck by a semi truck in Kelowna

The civil forfeiture office accuses the trio of violations of the U.S. Securities Act and B.C. Securities Act, possession of the proceeds of crime, fraud over $5,000, money laundering, tax fraud, and stock fraud.

The U.S. Securities and Exchange Commission determined the scheme generated $165 million USD in illegal sales of shares of at least 50 micro-cap companies (valued between $50 million and $300 million) between June 2015 and September 2018.

The commission claims the scheme was set up by Roger Knox of the United Kingdom, who operated a Swiss asset manager called Wintercap SA.

Michael Gastauer of Germany helped Knox establish several companies and unregistered virtual financial firms located in the U.S. for Wintercap SA to disburse the money, the lawsuit claims.

Some or all of the proceeds were then transferred to CCIL and one or more of Kirk, Johnson, and Brana.

CCIL, incorporated in Hong Kong and registered as extraprovincial in B.C., then allegedly used that money to buy the Mission Ridge Road home and the Big White Ski Resort condo.

The documents allege the following transactions occurred through bank accounts set up by Gastauer:

  • March 22, 2017: CCIL sent $101,000 to Norwich Real Estate Services in Kelowna
  • May 10 and 11, 2017: Another $1.529 million was sent to an unnamed Kelowna law firm
  • May 18, 2017: the Mission Ridge property was purchased for $1.6 million in cash
  • May 30, 2017 to Oct. 23, 2017: CCIL sent three installments of $250,500 to its Kelowna-based BMO account
  • Jan. 10, 2018: CCIL bought the Big White condo for $524,000 in cash

The unnamed law firm represented CCIL in all property purchases, according to the documents.

In 2013, Kirk was charged with violations of the U.S. Securities Act. In 2015, he admitted to breaches of the Alberta Securities Act and agreed to pay a $100,000 fine.

None of the allegations has been proven in court and none of the defendants has filed a statement of defence.


@michaelrdrguez
michael.rodriguez@kelownacapnews.com

Like us on Facebook and follow us on Twitter.

Just Posted

100 Homes Penticton gets a new name after year of success

The campaign, run by the United Way South Okanagan, housed an additional 130 people in 2019

Penticton council urged to consider finding student housing options

Students with the Okanagan College Penticton campus presented at the regular meeting on Oct. 15

Is your business ready for when disaster strikes? Find out at FutureBiz Penticton 2019

The event for entrepreneurs to learn and connect returns for its second year on Dec. 4

Shinedown pumped to return to Penticton

The metal band stops at the South Okanagan Events Centre on Oct. 15

Celtic Illusion coming to Penticton in 2020

The show features contemporary Irish dance paired with grand illusions and magic

Election 2019: Connie Denesiuk – Liberal Party candidate for South Okanagan – West Kootenay

Connie Denesiuk is running for the Liberal Party in the South Okanagan – West Kootenay riding

Okanagan ski hills highlighted on website’s ‘most affordable’ list

HomeToGo looks at rentals, lift passes, accommodations and food to compile list of Top 50

UPDATE: British couple vacationing in Vancouver detained in U.S. after crossing border

CBP claims individuals were denied travel authorization, crossing was deliberate

After losing two baby boys, B.C. parents hope to cut through the taboo of infant death

Oct. 15 is Pregnancy and Infant Loss Awareness Day in B.C.

Quantum 1 cannabis retailer scheduled to open in Similkameen Nov. 1

Owner Russ Rossi promises modern shopping experience

Cheating husband sues mistress for gifted ring after wife learns about affair

The husband gave his mistress $1,000 to buy herself a ring in December 2017

B.C. boosts legal aid funding in new payment contract

‘Duty counsel’ service restored in some communities, David Eby says

Okanagan man killed in head-on collision on Highway 1 near Salmon Arm

Police say 21-year-old died at scene after pickup truck collided with transport trailer

Rugby Canada helps recovery efforts in Japan after typhoon cancels final match

Canadian players wanted to “give back in whatever small way they could”

Most Read