FMA cuts off audacious scam
Police in Thailand have busted an international boiler-room scam run out of Bangkok using a New Zealand-registered shell company.
New Zealand regulator the Financial Markets Authority, which turned down the scam's audacious bid for registration as a Qualifying Financial Entity, said no New Zealand victims had come forward.
Elaine Campbell, the head of compliance monitoring at the FMA, said Capital Consultants Management (CCM) appeared to be part of a long-running and highly mobile transnational scam.
"There were a lot of names on the periphery that raised red flags," she said, citing warnings from authorities in Canada and Australia.
According to news reports out of Thailand, police raided the office of CCM in April and arrested nine foreigners, among them citizens of Latvia, Canada and the United States.
Reports said CCM was operating an internet-based call centre inducing investors in the US, Australia and Europe to make fictitious investments in the petroleum business.
Total losses are said to exceed $10 million.
Of four individuals listed as current or former directors of CCM, two - Latvian Janis Rozenblas and Canadian William Elik - were arrested, and a third - Rodolfo Salgado - was reported to be on the run.
CCM was registered on the New Zealand Companies Office in August 2010 and is understood to have cold-called victims seeking to sell shares in a Nevada-based natural gas drilling company.
It is understood CCM's New Zealand-registered subsidiary, Forest City Basin Resources, was used as an "investment" vehicle.
Campbell said CCM had applied for Qualifying Financial Entity (QFE) registration in July 2011 to sell directly to New Zealand citizens, but warnings from regulators in Australia and Canada had scotched the bid.
Campbell said the principals behind CCM appeared to have a long track record and regularly changed jurisdictions.
"They're not entirely stupid, they're clever enough to always create new entities," she said, citing similarly named companies in Malaysia and Luxembourg.
Campbell said the decision not to grant QFE status to the alleged scam - the first time the regulator had declined such an application - had likely protected New Zealand investors from losses.
"It's pleasing to know that our role as a gatekeeper, in terms of ensuring those who shouldn't be in the sandpit aren't permitted to play, is working," she said.
In 2011 the Australian Securities and Investments Commission included a CCM forerunner, the Malaysian-registered Capital Consultants, on a list of suspected scams.
ICM's founding director, Canadian citizen William Elik, has previously come to the attention of securities regulators.
In 1995, the Ontario Securities Commission permanently banned Elik from ever being involved in share-trading after he orchestrated a pump-and-dump scam.
The commission said in its ruling that Elik was "actively engaged in selling an amazingly large amount of highly speculative shares" and described him as a "super-salesman, prepared to say what is necessary to sell product to the customer".
The ultimate ownership of CCM is shrouded in mystery, with shareholdings transferred in July 2011 from Brave Light Holdings to Global Target Investment Group. Both shareholding companies are incorporated in the notoriously secretive British Virgin Islands.
According to the British Virgin Islands shell company database leaked to the International Consortium of Investigative Journalists, Brave Light Holdings was controlled by Elik and set up by Canadian Gunnar Helgason.
Helgason was also among those arrested in Bangkok.
Sunday Star Times