14 Sep 2020
B.C. Supreme Court has stipulated that a Mexican businessman must produce documents within 30 days in a B.C. forfeiture case.
The case involves two Kelowna-areas properties the province alleges were used to launder money linked to a $200-million plus international stock fraud.
Following the consent of the parties, the court ordered on Aug. 27 that Carlos Gomez Brana and Cuatro Cienagas Inversiones Ltd. must deliver a list of documents and full copies of those documents to the legal counsel for the B.C. Civil Forfeiture Office within the 30-day period.
Under the order, the civil forfeiture office, which launched a 2019 suit to seize the properties as proceeds of crime, must also produce a list of documents and copies of documents that are relevant to the case.
The court order stipulates that if Brana or the company do not produce the documents the civil forfeiture office can resubmit an earlier application that included a request to the court to allow it to apply to take more than $1 million from the sale of the two properties.
In an earlier response, Brana and Cuatro Cienagas denied any wrongdoing and said the civil forfeiture claim should be dismissed, arguing the forfeiture office has no evidence whatsoever linking the defendants to the stock fraud and money laundering.
The civil forfeiture office has said the requested documents should include the source of funds used to purchase and maintain a house on Mission Ridge Road in Kelowna and a nearby condo at Big White ski hill.
The two properties were purchased in 2017 and 2018 for more than $2 million. More than $1 million from their sale has been paid into court pending the outcome of the forfeiture suit.
The request for documents includes whether Brana and the company had legitimate business or investment operations in B.C., and whether Kelowna-residents Kayley Tyne Johnson and Benjamin Thomas Kirk were “effectively” hired to maintain the properties.
Initially, Johnson and Kirk were included in the civil forfeiture case launched in 2019, but the proceedings against them were discontinued.
The global stock fraud generated more than US$165 million ($215 million Cdn) in illegal sales of shares of at least 50 penny stock companies, according to an investigation by the U.S. Securities and Exchange Commission. One of the key players pleaded guilty in the U.S. in 2020 to the scheme.
According to the B.C. civil forfeiture office’s court filings in 2019, proceeds from the global stock-fraud scheme were transferred to or on behalf of one or more of Cuatro Cienagas, Kirk, Johnson and Brana and used to buy the Kelowna properties.
By Gordon Hoekstra, Vancouver Sun, 11 September 2020
Read more at the Vancouver Sun
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