The suspected mastermind of one of the largest penny stock fraud cases in history allegedly created shell corporations, used burner cell phones, conducted business across continents and operated under aliases like "Jerry Sarrano" and "Robin Cheer."

Sandy Winick, formerly of Stoney Creek, is alleged to have "orchestrated" a plot that bilked $140 billion from investors in Asia, Europe and North America. The scheme, involving penny stocks sold through call centres, was staged by four Canadians and carried out with the help of five Americans, took place starting in 2008, U.S. authorities said.

Winick, 55, is believed to be hiding out in Thailand and is said to have worked out of China, Vietnam and the U.S., in addition to his native Canada.

Fraud 'speaks for itself'

In a filing to the U.S. District Court (Eastern District of New York), prosecutor Loretta Lynch wrote that Winick and his associates wove "an intricate web of schemes to abuse the security markets, hide their thefts and then re-victimize investors" with additional schemes.

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United States Attorney Loretta Lynch outlined details of a penny stock fraud involving four Canadians and five Americans in New York this week. (John Minchillo/Associated Press)

"When it comes to the defendants' character, the breadth and duration of this scheme, which victimized people for more than a decade, speaks for itself…[T]he defendants can be truthfully described as living this crime, which defines their character."

A week before the fraud indictments in the U.S., Winick was convicted of securities fraud in Ontario for his involvement with two corporations with connections to Stoney Creek.

In the new indictment, Lynch alleged that Winick and the nine other accused were involved in a massive "pump and dump" scheme — buying controlling interests in sketchy startup companies, then artificially inflating their value by promoting them in fictitious emails, social media messages and news releases.

The fraudulent sales yielded more than $120 million in revenue from investors from the U.S., Canada and 33 other countries.

Working out of boiler room phone centres in Canada, Thailand and Britain, the defendants again victimized the same investors by convincing them to pay $20 million in advance fees in return for helping them sell their securities or join lawsuits to reclaim their losses, court papers said.

In some cases, it's alleged the accused pretended to work for the U.S. Internal Revenue Service.

The FBI arrested six men in the case this week, including Canadian Kolt Curry, 38. Another Canadian alleged to have participated in the scheme, Gregory Ellis, 46, was arrested in Toronto.

A fourth Canadian  — 63-year-old Gregory Curry, father of Kolt — is also at large.

All of the defendants, U.S. authorities say, "worked for" Winick.

In a detention letter, which flags Winick and his co-defendants as potential flight risks, Lynch provided insight into what she describes as Winick's "bad character."

"On December 4, 2012, Winick joked about how he could continue operating under fales names and shell corporations even if he were banned for life by the [U.S. Securities and Exchange Commission]."

The Canadian, Lynch also wrote, operated out of countries such as Thailand, Vietnam and China in order to "avoid extradition" and apparently bragged that he once bribed Thai officials to get out of jail.

Canadian fraud

This isn't the first time Winick's name has been attached to a $1-million-plus case of fraud. On Aug. 7, an Ontario Securities Commission adjudicator ruled that Winick had committed securities fraud and unregistered trading between June 2009 and late 2010 — when the penny stock scheme was alleged to have already been underway.

In his decision, the OSC's James D. Carnwath ruled that Winick used a "fictitious" investment bank, Denver Gardner, to sell shares to shell corporations, including Liquid Gold International Inc. and BFM Industries, Inc. Both Ontario companies were found to have been "entirely fraudulent" and to have had "no legitimate business."

And both, as it happens, have connections to Stoney Creek.

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The Ontario Securities Commission found Winick had committed securities fraud for his role in BFM Industries, Inc., a shell corporation that was registered to this house in Stoney Creek. (Cory Ruf/CBC)

Incorporated in Nov. 2008 and May 2009, respectively, BFM and Liquid Gold were registered to Andrea McCarthy, of Stoney Creek, with whom Winick lived, and who was involved in the creation and administration of the two shell corporations, according to the OSC.

According to records, BFM was registered to McCarthy's residence, while Liquid Gold was listed to an address in Toronto.

But in his ruling, Carnwath identified Winick as the "directive mind and management" of the companies, siphoning a total of more than $1.5 million from the BFM and Liquid Gold accounts for his "own personal benefit." Hundreds of thousands of dollars of that money was used to make payments on credit cards belonging to Winick, his wife Jodi as well as McCarthy.

Greg Curry, who's suspected of having participated in the larger penny stock scheme, was also found to have committed securities fraud related to his involvement with BFM. 

The OSC is expected to hand down sanctions in the case in September.

The body has not yet ruled on McCarthy's involvement with the companies, but documents show she has participated in the hearings, while Winick has not.

CBC Hamilton made multiple attempts to reach McCarthy by phone and also knocked on the door of her Stoney Creek home. None was answered.

A neighbour, who asked not to be named, said Winick hadn't been seen in the area "for years."