(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

‘I just felt I had to do something’: Vernon Black Lives Matter protest organizer

Young woman organizes peaceful protest to take place next week at Vernon courthouse

Woman injured as purse snatched downtown Vernon

Two young men were arrested following detailed statements from witnesses

Vernonites encouraged to get active for National Fitness Day

National Health and Fitness Day takes place this Saturday, June 6

Injured 71-year-old mountain biker rescued from Vernon trail

Vernon firefighters assisted with the rescue in Ellison Provincial Park

Get Outdoors! Our lake of many colours

Take a look at what’s behind Kalamalka Lake’s colours

Second video of Kelowna RCMP arrest shows Mountie punching suspect at least 10 times

The officer involved in the incident has been reassigned to administrative duties

‘I’m pissed, I’m outraged’: Federal minister calls out police violence against Indigenous people

Indigenous Minister Marc Miller spoke on recent incidents, including fatal shooting of a B.C. woman

Community backlash over Black Lives Matter rally in Kelowna

Some members of Kelowna’s black community stated they don’t support Friday’s rally

Plan in place for BC Ferries to start increasing service levels

Ferry corporation reaches temporary service level agreement with province

B.C. starts to see employment return under COVID-19 rules

Jobless rate for young people still over 20% in May

Flooding prompts closure of parks along Shuswap and Mara lakes

Boaters asked to respect No Wake policy protecting properties along water

Cyclist in serious condition after being hit by dump truck in Kelowna

The woman sustained injuries to one of her legs, according to RCMP

Olympic athlete sends shout-out to Cawston Primary students

Canadian Olympic sprinter Khamica Bingham participated in one of the school’s long-time traditions

Kelowna Mountie on desk duty following ‘aggressive’ arrest

The officer involved in an arrest that took place on May 30 in Kelowna has been placed on administrative duties

Most Read