The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators are investigating a Bahamas-based financial and corporate services provider that allegedly helped to conceal and transfer proceeds generated by a $77m securities fraud.

Tribune Business can reveal the Securities Commission is investigating after the company, which was not named in legal documents, was said to have been involved in “bogus loans” and generating phoney invoices to cover the true source of the monies it was purportedly handling on behalf of a Canadian client, Geoffrey Allen Wall. 

Christina Rolle, the Securities Commission’s executive director, told this newspaper that the Bahamian regulator - which is responsible for overseeing financial and corporate services providers - knew of the allegations made by its US counterpart but declined to comment further.

“We’re aware of the matter, but cannot comment at this time,” she said. Both Ms Rolle and the Securities & Exchange Commission’s (SEC) prosecuting attorneys declined to name the Bahamian financial services provider involved - a possible sign that it might be co-operating and helping to provide evidence. James Smith, the SEC attorney, said he could not comment outside the filings.

The legal papers, filed in the Massachusetts federal court, are concerning enough as they imply that the Bahamian provider was effectively involved in money laundering - knowingly or otherwise - by helping Mr Wall conceal the origin of proceeds from purported securities frauds.

The documents, which have been seen by this newspaper, assert that Mr Wall transferred funds from the so-called “Sharp Platform” to the Bahamian company, which represented proceeds from illegal securities transactions known as “pump and dump” schemes.

The “Sharp platform” was an entity that facilitated “illegal securities sales” for the Canadian, his co-conspirators and others by hiding their control of illiquid penny stocks, whose values they inflated via false and misleading promotional statements before subsequently dumping the worthless shares on unsuspecting victims.

“Wall’s requests for such external transfers, for example, often directed the Sharp Platform to send Wall’s illicit proceeds to a Bahamas-domiciled corporate and financial services firm of which he was a client,” the SECD is alleging.

“The Sharp Platform, throughout the years, sent these payments from an array of foreign bank accounts it controlled in the names of various front companies it had established, and that it used to park stock, sell it on its clients’ behalf, park proceeds thereof, or all three. These transactions were variously and falsely described.

“For example, in November 2016, a Sharp vehicle transfer of $85,000 to the Bahamian firm was papered as proceeds of a loan from the Sharp vehicle to the Bahamian firm, complete with bogus loan documents,” the SEC charged.

“Other times, Sharp vehicle transfers to the Bahamian firm were supported by invoices for services supposedly provided by the Bahamian firm to the Sharp vehicle sending the wire, such as ‘international consulting services’ (in the case of an August 2015 wire), and ‘provision of three months of services relating to the sourcing of IPO opportunities’ (in the case of a June 2017 wire).

“In many cases, shortly after such transfers were made, at Wall’s direction, to the Bahamian firm, the Bahamian firm, in turn, wired funds to people close to Wall, including his wife, his adult daughter, and his family. For example, in May 2015, the Bahamian entity transferred $700,000 to the Wall Family Trust.”

Wall was also referred to as “Bahamas” in encrypted communications that took place between himself and the Sharp Platform. Describing Wall as a resident of British Colombia, the SEC added: “Wall has been associated (as a stockbroker) with foreign brokerage houses, including a firm in The Bahamas.”

The latter firm was also not named, and it is unclear if that is the Bahamian financial and corporate services provider also referred to.