Bob's Lessons Learned

Bre-X Minerals, Calgary, AB

Securities Investor Fraud Many Fools’ Gold May 5, 1997 Headlines: Bre-X Minerals Limited was a “Canadian mining exploration company that falsified the gold strike (in Indonesia) and then hyped its stock price to the heavens” from Wall Street Journal. The Washington Post headlines read “A Lode of Lies: How Bre-X Fooled Everyone No Deposit, No Return”. The Calgary Sun, home city of Bre-X in Canada headlines read “Bre-x: There’s No Gold - MASSIVE FRAUD”. Two days earlier, before the story had broke, I had arrived in Calgary to attend a meeting in the boardroom of Bre-X the next day with...
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IBM, Amsterdam, Netherlands

Securities Investor Fraud A Personal Pension? The internal auditor for this Fortune 100 Company raised kickback allegations involving someone in management responsible in Europe for investments made with the company’s pension fund. Counsel retained me to conduct an investigation in the Netherlands. When company documents were examined, it became apparent that these allegations had been raised without considering alternative explanations and situations that, in the end, did answer the issues. However, to be safe, the investigation was extended to include meetings with certain brokers used extensively by the pension director. There was no foundation for the allegations.
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Regina vs. Carnie

Real Estate Investor Fraud Argosy and the Backward Horse This $24 million fraud case was the largest ever mortgage fraud case in Canada, catching 1,600 investors who had placed their funds into syndicated mortgages with Argosy Financial Group of Canada Ltd. Argosy started in 1975 and in 1980 it was placed into receivership. Most of the investors were from the province of Ontario with the real estate projects located in Ontario, Alberta and Florida. John David Carnie, the President of the company eventually pled guilty and received a 6 ½ year sentence. It was fun to piece this case together,...
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Regina vs. John Pullman (Switzerland), Roger St. Germain and Robert Keyser

Securities Investor Fraud Buy Stock and Rent a Corner Gas Station Robert Keyser was the President of Aquablast Inc., and pled guilty to conspiracy to defraud European investors in a stock promotion involving a water blast industrial cleaning system in March 1977. While renting a corner gas station in Toronto, Aquablast boasted in Europe that it had a paper value of $5 million. My role was that of a consultant and not a witness. Accordingly, I was able to examine financial records seized in Switzerland by the RCMP from John Pullman who was the apparent moneyman for Meyer Lansky, a...
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Regina vs. Sid Rosen, Irving Kott and others

Securities Investor Fraud Flogging in Somed Mines This was a stock market scheme involving shares of an obscure Quebec company called Somed Mines Ltd. The case heard in May, 1976 involved allegations of stock market manipulations, which included bribes to stockbrokers to encourage selling to their clients. Unique to this case was my role as a witness. Crown Counsel (now Honourable Justice) David Doherty felt it unnecessary to call me as his final witness because his case submissions had gone well. However, defense counsel decided to call me as their witness and in the box I went. This was an...
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Regina vs. Katz, Swanbrough

Real Estate Investor Fraud Fraud in a law practice In this case, Katz and Swanborough operated a successful law practice for many years, but financial problems arising in their related mortgage company, Yorkfield Agencies, led to fraud charges in 1980. ‘Yorkfield’ was responsible for creating Hess Village located in Hamilton, Ontario where older homes were converted into shops, restaurants and galleries. This case was particularly interesting from the perspective of studying human behavior within a fraud context. Clearly, from the use of funds, one could study the mindset of the accused as the business pressures built, not only at the...
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