.jpg;w=960)
Vancouver criminal lawyer Paul McMurray called the U.S. government’s case against his client and reported Hells Angel Courtney Vasseur a “house of cards” after Supreme Court of B.C. Justice Catherine Wedge denied his initial bid to toss the case on constitutional grounds Tuesday.
Vasseur’s extradition hearing continued for a second day alongside alleged co-conspirator Curtis Lehner, a former stockbroker and salesman for Eron Mortgage Corp. The two are charged in the U.S. with multiple counts of criminal securities fraud, conspiracy to commit securities fraud, wire fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering for their part in a set of alleged fraud schemes involving over US$1 billion in illegal trading.
Vasseur's network, including Lehner and Domenic Calabrigo, is alleged to have generated US$35 million in illicit proceeds alone, via a pump-and-dump scheme.
On Monday, McMurray argued a photo of Vasseur found in the charging documents was gathered by the Federal Bureau of Investigation (FBI) contrary to Canadian law.
A Canadian police officer had deposed that he took Vasseur’s photo in April 2012 outside the Hells Angel motorcycle club’s Vancouver East End clubhouse on East Georgia Street, as part of an information gathering exercise by the Combined Forces Special Enforcement Unit-BC. However, the officer did not provide it to the Vancouver Sun, which published a photo of Vasseur online in 2014.
McMurray argued the evidence (photo) was gathered in Canada and as such is subject to charter rights.
But Wedge ruled the photo was only created in Canada and gathered in the United States. Furthermore, Wedge said McMurray’s argument that digital access ought to be considered under the Extradition Act was not valid as the act doesn’t contemplate such a situation.
And since the photo was deemed to be gathered in the U.S., the charter argument that police violated Vasseur’s privacy became moot.
With that, McMurray went on to suggest the FBI’s evidence in the charging documents lacks details.
Under the act, Wedge must only find that there is “prima facie” evidence, or evidence at first sight; Wedge is not making any determinations of guilt or innocence.
Lehner’s lawyer Teresa Mitchell-Banks, a former Crown prosecutor and short-lived director of enforcement for the B.C. Securities Commission, argued the U.S. authorities had not proven the two committed fraud because they hadn’t proven the two knew stock promotion material to be false.
“You must know the act is a falsehood; that it’s a lie…at the time it's committed,” said Mitchell-Banks, adding fraud excludes mere negligence.
“A pump in dump is an act of deceit,” and in this case the “evidence is manifestly unreliable,” said Mitchell-Banks.
Ryan Dawodharry, counsel for the Attorney General of Canada, is expected to make submissions at the hearing this week.
The alleged scheme used a global network of shell companies to conceal beneficial ownership of company shares and trades. The U.S. Securities and Exchange Commission (SEC) stated the network’s “mastermind” was former Vancouver lawyer Fred Sharp, who also faces criminal fraud charges in a separate indictment. There are no extradition proceedings against Sharp.
Sharp, of West Vancouver, has been found liable in a civil case against him and ordered to pay disgorgement and prejudgment interest of US$28,934,433 and a civil penalty of US$23,990,781. Sharp is now barred from future trading in U.S. and Canadian stocks.
Vasseur, dubbed "Arctic Shark" by associates, allegedly worked with Sharp in orchestrating the “pump and dumps” of penny stocks, according to a related civil claim brought by the SEC on April 14, 2022.
For example, the SEC alleges Vasseur manipulated the stock of a Nevada shell company called Bingo Nation Inc., which purported to be offering televised bingo games. And it was Sharp and Lehner who are said to have controlled the corporations used to conceal Vasseur’s ownership of shares in Bing Nation.
In civil cases brought by the U.S. Securities and Exchange Commission, several British Columbians have been recently found liable of securities fraud in relation to their arrangements with Sharp.
None of the allegations against Vasseur and Lehner have been proven in court.
This article was update to correct information pertaining to the SEC civil claim
