Province asks court to order accused to produce documents in B.C. forfeiture case
Gordon Hoekstra
The Vancouver Sun
B.C. is alleging money from an international stock fraud ended up in Kelowna
The province has applied to court to force a Mexican businessman to produce documents in a B.C. forfeiture case.
The case involves Kelowna-area properties that the province alleges are linked to a $200-million-plus international stock fraud.
In an application filed in B.C. Supreme Court on July 27, the B.C. Civil Forfeiture Office requested that within two weeks, Carlos Gomez Brana and his company Cuatro Cienagas Inversiones Ltd. deliver a list and full copies of documents related to the case.
If the list and copies of documents are not produced, the civil forfeiture office has called on the court to allow it to apply to take more than $1 million from the sale of the two properties.
As of Aug. 20, there has been no response by Brana filed on the civil forfeiture office’s application. A hearing scheduled for Aug. 12 was adjourned.
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.
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In the July 27 application, the civil forfeiture office 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. The $1 million from their sale has been paid into court pending the outcome of the forfeiture suit.
The request also calls for documents to show whether Brana and Cuatro Cienagas had sufficient lawful net income to purchase and maintain the properties, 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 $165 million US ($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.
Cuatro Cienagas used that money to buy the Kelowna properties, according to the civil forfeiture office’s claim.
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In 2017, money was transferred to a real estate firm and a Kelowna law firm to purchase the Kelowna house and the Big White condo using, in part, entities and accounts implicated in the U.S. stock fraud, according to the civil forfeiture suit.
For example, in December 2017, Cuatro Cienagas directed a Swiss firm, formerly known as Silverton, involved in the U.S. stock fraud to transfer three instalments totalling $548,000 from a Bank of Montreal account to the Kelowna law firm.
In an earlier response, Brana stated the civil forfeiture office launched the lawsuit primarily on its own initiative and in the absence of a bona fide Canadian or other law enforcement investigation regarding proceeds of the unlawful scheme being linked to British Columbia.
The civil forfeiture action was done in a “cavalier and abusive manner,” says Brana’s response.
Brana, a Mexican resident, says he is a businessman who purchased the properties in B.C. through the company Cuatros Cienagas, of which he has sole control.
© 2020 Vancouver Sun
