(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

COVID-19: 2020 Peach Classic Triathlon cancelled

Athletes’ inability to properly train main reason for cancelling the long-running event

Childcare service in South Okanagan to serve just essential service workers

On April 1, eight OneSky childcare centres will only be available to essential service workers

COLUMN: Plenty of online reading options

Libraries are closed due to COVID-19 but downloads are available through Okanagan Regional Library

Summerland care facility orders reusable masks

Okanagan Valley quilters ready to produce cloth masks if needed

SORCO rescues ‘Hope’ the owl, their first of 2020

The organization is experiencing a large decrease in the number of injured birds being reported

B.C. records first at-home death from COVID-19, but 70+ hospital patients have recovered

Total of 970 novel coronavirus cases in B.C., with the majority in the Lower Mainland area

BC Ferries able to restrict travel for sick passengers

Ferries working on schedule shifts to keep workers safe

Virtual physio connects patients with Okanagan practitioners

Many local physiotherapists are ready to assist, online

Canada expands 75% wage subsidy to COVID-19 affected businesses of all sizes: Trudeau

Program will provide up to $847 per week for each worker

Pay parking suspended at B.C. hospitals due to COVID-19

Temporary free parking reduces need for keypads, contact

Helping those at risk, one piece of paper at a time through ‘isolation communication’

Simple paper tool during pandemic making its way across Canada thanks to social media.

‘Back to school, in a virtual way’ for B.C. students in COVID-19 pandemic

Province adds online resources to help parents at home

Don’t take hair into your own hands, urge Okanagan stylists

New Vernon shop expects high demand come May, since opening delayed

Most Read