Brian De Wit, Cem Can indicted by FBI in $500M offshore tax fraud scheme
Two Canadian citizens living in Belize have been indicted in the United States for their alleged role in a $500 million US offshore money-laundering and tax-evasion scheme, according to U.S. prosecutors and the FBI.
The indictment was unsealed late Tuesday in New York.
Brian De Wit and Cem Can, also known as Jim Can, along with one American and three others from the Caribbean, face multiple counts for the alleged fraud.
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The charges include conspiracy to commit securities fraud, tax fraud and money laundering. The U.S. government will request extradition of the Canadians, along with Andrew Godfrey, from Belize and Kelvin Leach and Rohn Knowles from the Bahamas.
The American charged in the case, Robert Bandfield, appeared in court on Wednesday.
"Bandfield and his co-conspirators devised not only a fraudulent scheme but an elaborate corporate structure based on lies and deceit designed to enable U.S. citizens to evade and circumvent our securities and tax laws," U.S. Attorney Loretta Lynch said in a statement.
"They set up sham companies with figureheads at the helm in an attempt to deceive U.S. law enforcement and regulators and bragged about their scheme to their clients."
U.S. authorities claim, between January 2009 and September 2014, the men masqueraded as financial professionals and developed three interrelated schemes on behalf of themselves and their clients. Authorities claim they:
- Defrauded legitimate investors in several U.S. stocks by manipulating prices.
- Helped their own corrupt clients to evade paying U.S. taxes on those bogus profits.
- Laundered approximately $500 million US in criminal proceeds.
According to U.S. authorities, the “corrupt clients” included more than 100 unnamed U.S. citizens and residents.
In one example, the FBI alleges De Wit and one of his clients manipulated the price of a thinly traded penny stock known as Cannabis-Rx, a small U.S. company in the marijuana industry, with the ticker symbol of CANA.
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Shares in the company hadn't traded since July 2013, before a flurry of trades between the end of March and mid-April 2014 pushed the company's value up sharply. The company's shares ranged as high as $13.77 US per share on March 27, 2014 to 50 cents on April 15. Today, the shares are trading hands at about 30 cents each.
“As alleged, the defendants concocted an intricate scheme using sham companies to make money while repeatedly evading and violating U.S. securities and tax laws. The indictment of these defendants should serve as a stern reminder that such greed-based behaviour comes at a cost,” the FBI said in a statement.
A voicemail message left by CBC News requesting comment from De Wit for this story Wednesday wasn't immediately returned.