(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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

QUIZ: A celebration of apples

September is the start of the apple harvest

Woman refused entry after refusing to wear mask at store in Kelowna mall

The woman filmed the encounter at LUSH Cosmetics, where wearing a mask in-store is company policy

Smoky skies clearing throughout B.C. Interior

Environment Canada expects “widespread” improvement for all affected areas by Sunday

Stranger in truck grabs boy walking home from school in Kelowna

The 11-year-old boy escaped the incident, RCMP are investigating

Okanagan group calls for inclusive COVID-19 recovery plan

RAMA Okanagan wants full immigration status as part of COVID-19 recovery

3 new deaths due to COVID-19 in B.C., 139 new cases

B.C. confirms 40 ‘historic cases,’ as well

Supreme Court Justice Ruth Bader Ginsburg dies at 87

The court’s second female justice, died Friday at her home in Washington

‘This is a very difficult sentencing’; Judge delays Okanagan manslaughter trial to next week

The courts heard Friday that Bourque “did not intend to cause harm” but that her actions were “reckless”

Emaciated grizzly found dead on central B.C. coast as low salmon count sparks concern

Grizzly was found on Gwa’sala-‘Nakwaxda’xw territory in Smith Inlet, 60K north of Port Hardy

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

VIDEO: B.C. to launch mouth-rinse COVID-19 test for kids

Test involves swishing and gargling saline in mouth and no deep-nasal swab

Young Canadians have curtailed vaping during pandemic, survey finds

The survey funded by Heart & Stroke also found the decrease in vaping frequency is most notable in British Columbia and Ontario

B.C. teachers file Labour Relations Board application over COVID-19 classroom concerns

The application comes as B.C.’s second week of the new school year comes to a close

CHARTS: Beyond Metro Vancouver, COVID-19 cases in B.C. haven’t increased much recently

COVID-19 case counts outside of Metro Vancouver have been level since July

Most Read