The Securities and Exchange Commission (SEC) has filed another enforcement action related to the Frederick Sharp case, this one involving the operation of a boiler room in Colombia used to solicit investments from investors for little issuers.
The SEC alleges that the defendants ran a call centre boiler room in the cocaine capital of the world, Medellin, Colombia, which generated US$58 million in proceeds of stock fraud. They allegedly hurt elderly victims and other investors in Canada and the US, and using high pressure sales techniques, sold them stock they knew would be worthless because the stock was controlled by hidden control persons, and was being dumped on the market. The defendants allegedly charged a commission of 65% of the proceeds of stock fraud.
The defendants are Canadian residents Francis Jason Dean Biller, Raymond Christopher Dove, Troy Gran-Books and Justin Plaizier, and American Chester Bruce Alvarez.
Biller is a/k/a Frank Biller, who has a criminal record in British Columbia for fraud related to the Eron Mortgage Corporation securities fraud Ponzi scheme in Vancouver. He was permanently banned by the Ontario Securities Commission from serving as an officer or director of an Ontario issuer, and was found by the British Columbia Securities Commission to have engaged in illegal and fraudulent activities. 2,285 investors were defrauded of $240 million in the Eron Mortgage Corporation case.
Biller received a light jail sentence of three years, despite that it was BC’s biggest financial crime case at the time. The Frederick Sharp case, to which this is related, is now the biggest financial crime case in British Columbia and Biller is involved again in a now bigger financial crime case in British Columbia.
Jurists criticized the Biller sentence because it was devoid of deterrence or denunciation, required elements in sentencing, and sent out a clear signal that financial crime pays in Vancouver.
Frederick Sharp is a Vancouver-based “company service provider”, as that term is known under the FATF Recommendations. This enforcement action is a prong of a much larger case against Sharp and his associates in Vancouver which alleges that they orchestrated a US$1 billion stock fraud over a ten year period in Vancouver by running a type of fraud factory, servicing Vancouver capital markets players with the assistance of numerous professional facilitators who laundered securities and money.
In the new Biller enforcement action, the SEC added relief defendants including Lia Patricia Sepulveda Salazar, a/k/a Patricia Biller, who allegedly received over US$3 million from the stock fraud proceeds in accounts in her name and Edward Thomas Clark in British Columbia, who allegedly received US$630,000 from the proceeds in Canada.
In this complaint, the SEC focuses on three little issuers: (a) Oroplata Resources Inc. (“Oroplata”) in the Dominican Republic, now American Battery Metals Corporation, which alleges it is a lithium battery maker; (b) Vancouver-based Garmatex Holdings Ltd. (“Garmatex”), which is now Evolution Blockchain Group, which stated that it released an ICO and ran an online gambling service in Vancouver; and (c) New Jersey-based PureSnax International Inc. (“PureSnax”), now IQST, which allegedly sells FinTech, Blockchain, and electric vehicle services, as well as operates a digital currency exchange. Previously, it allegedly manufactured healthy snacks but reported having no employees or facilities.
The SEC says that Biller and Dove led the boiler room operation. According to the SEC, Biller and Dove promoted two little issuers at a time under a fictitious company name and set up a website for that fake entity. They expropriated the names of professionals and firm names for credibility and legitimacy, which they used during the sales calls. When that so-called “platter” of two issuers was pumped and dumped and became worthless stock, they started all over again with two more under new company names and new expropriated names of professionals.
The SEC says that the Oroplata (now American Battery Metals Corporation) pump and dump involved a situation where the hidden control persons controlled 100% of the issued and outstanding shares, and in the case of Garmatex (now Evolution Blockchain Group), 90% of the issued and outstanding shares were secretly controlled. In the latter, they earned US$7 million in proceeds of fraud for the alleged pump and dump of Garmatex (now Evolution Blockchain Group). One retired investor lost US$2 million buying Garmatex stock.
The defendants are charged with fraud and stock manipulation.
Note: To GenZs, a boiler room is a cool secret EDM concert that takes place in a small location. For anyone older than GenZs, a boiler room is an illegal cold calling sales centre.