(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

Penticton business icon closing doors after 80 years

The owners of Grant King Menswear are retiring after 35 years

Bag of white substance found near Summerland water park

Resident concerned crystal meth was left near children’s play area

Property crime has been increasing in Penticton since 2014

Of the 5,457 criminal code violations (excluding traffic violations) reported in Penticton… Continue reading

TGIF: Penticton and South Okanagan events listings

Live theatre, concerts, events, art exhibits and more from around the South Okanagan

Casey Affleck’s movie Light of My Life features Southern Interior of B.C.

Film features Academy Award and Emmy Award winners

Osoyoos woman who threatened mom and baby with butcher knife sentenced

Sharon Constance Forner pleaded guilty to one criminal charge and was sentenced

Concerns raised about crossing in Okanagan Falls

RDOS director says safety issues have been raised

Injured hiker rescued in Peachland

The woman fell while hiking Pincushion Mountain on Friday

‘Easy Rider’ star Peter Fonda dies at 79

Actor and writer was nominated for an Oscar for co-writing the 1969 psychedelic road trip movie

Car of missing Victoria pair found in Vernon

RCMP encourage people to call with information, not just post on social media

Families receive support from ‘Living Flag’ fundraisers

A young man and a boy who both live with limited mobility were supported by the Canada Day events

Haida artist to perform at George Ryga Festival in Summerland

Interweavings features music from Terri-Lynn Williams-Davidson and Bill Henderson

Princeton hosts Western Canada’s only festival devoted exclusively to traditional music

From a Doukhobor choir to folk singers, singer songwriters, Celtic music and… Continue reading

Most Read