(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

Salmon Arm pharmacies continue to experience flu vaccine shortage

One pharmacy has privately sourced vaccine in stock, available for purchase

Best in business: North-Okanagan Shuswap companies named top 10 semi-finalists

Small businesses from Salmon Arm, Vernon, Kelowna compete for top spot

White Lake firefighters go beyond call of duty with construction project

Storage shed built for sports equipment in South Shuswap park

Opening date for popular North Shuswap outdoor ice rink delayed

Warmer temperatures have pushed back the openings of several rinks in the region

New safety measures in place as snowmobile season gets underway in Sicamous

VHF radio channel posted at trailheads, assisted in rescue of stranded sledders

VIDEO: Success of wildlife corridors in Banff National Park has advocates wanting more

Demand for more highway protection escalated after seven elk were killed by a semi-trailer near Canmore

Column: Kid’s growing up fast on Old Town Road

In Plain View by Lachlan Labere

Fans sing Canadian anthem after sound system breaks at BMW IBSF World Cup

The Canadians in attendance made sure their team and flag were honoured on the podium

Frosty will have to pay rent to stay on Okanagan sidewalk next Christmas

Vernon Teach and Learn allowed to keep Frosty up, but will need a permit come January 1

Prince George RCMP use bait packages to catch porch pirates over the holidays

First-in-Canada program with Amazon looks to combat parcel theft

WATCH: Fire destroys Big White Ski Resort chalet

Social media eulogies peg the property, nicknamed “The Pharamacy,” as both loved and hated

Conservation officers on the hunt for North Okanagan moose poachers

Officers execute search warrant Friday morning, investigation continues

UPDATE: Highway 1 reopens after vehicle incident near Boston Bar

Initial reports of a jack-knifed semi truck had closed both directions of the highway

Nanaimo mechanical engineer creates thief tracking program

Nanaimo Thief Tracking lets users plot and share information about thefts online

Most Read