BC officials allege $46 million fraud by Metro Vancouver residents [Advance Cash ]

Bc Officials Allege $46 Million Fraud By Metro Vancouver Residents

The BC Securities Commission alleges the scheme was implemented between 2017 and 2019.

The BC Securities Commission has alleged that six Metro Vancouver residents, including a former securities lawyer, orchestrated a pump-and-dump scheme at three Vancouver-based companies, raising about $46 million.

Core Capital Partners Inc. and its sole director Kamaldeep Thindal, a Langley resident, and its chief financial officer Amandeep Thindal, of Surrey, are at the heart of the alleged multi-faceted scheme.

The Thindal brothers are appointed to hear respondents to administrative charges of violating British Columbia securities law alongside: Vancouver resident Yazan Al Homsi, former Vice President of Investments at Core; Delta resident Pardeep Luddu, a Core associate; Aarun Kumar, a former registered stockbroker living in Vancouver and Vice President of Corporate Development at Core; and Kumar's uncle, Mani Chopra, a retired securities lawyer residing in West Vancouver.

The commission alleges that Core was the unregistered investment vehicle used to raise funds for the three companies that claimed to be in industries particularly popular with investors at the time: health technology, cryptocurrency mining and cannabis production.

The group, together and separately, obtained cheap shares of corporations and then concealed their control over them through relatives, corporations, and nominees. The group then coordinated misleading press releases and promotional campaigns to increase interest (the pump) in the stock before selling these hidden stocks (the dump) during promotions, for net proceeds of $46 million.

Kamaldeep Thindal, who resides in a $3.7 million home on a half-acre in south Langley, according to securities filings, made $22.2 million from the alleged illegal dealings.

Following its investigation, the commission claims that Al Homsi grossed $11.4 million; Kumar took in $5.1 million; Amandeep Thindal grossed $4.5 million; Luddu got $1.7 million; and Chopra profited to the tune of $1.2 million.

"The respondents executed a pump-and-dump scheme that created a misleading appearance of trading activity or an artificial price for the securities of three reporting issuers in British Columbia," said the commission's Notice of Hearing signed by Executive Director Peter Brady on July 21.

The commission also alleges that Core committed market manipulation, assisted by the group.

"While they were directors, officers, employees or agents of Core Capital, K. Thindal, A. Thindal, Al Homsi, Chopra, Luddu and Kumar authorized, permitted or acquiesced in Core Capital's violations" of the BC Securities Act, the notice states.

As alleged, in July 2015, the group began accumulating a significant stake in healthcare technology company Reliq Health Technologies, which traded on the TSX Venture Exchange and over-the-counter markets in the United States. They did this by replacing Reliq's board and CEO with candidates under their control, as Amandeep Thindal became CFO and bank signatory. By September 2017, the group had amassed about a quarter of the company's 68.4 million freely tradable shares under hidden beneficial ownership structures.

Next, according to the commission, are promotions; "Al Homsi posted highly promotional tweets about Reliq using the @MakingMoneyNow1 Twitter account" and did so without disclosing his interest in the company.

And, Core Capital helped Reliq raise funds through private placements during Reliq's promotional period, according to the commission.

Reliq misled investors in January 2018 when it claimed it had achieved profitability, the commission further alleged.

While Reliq brought in about $2 million in revenue from its "patient monitoring platform" during the purported promotional period, it actually only raised $51,540, or about 2.6% of that amount, the commission noted.

Reliq's alleged scheme earned the group $19.4 million, in total, the notice said - the largest single company proceed.

The second largest alleged net proceeds came from the promotion of Integrated Cannabis Company Inc., a cannabis company listed on the Canadian Securities Exchange.

The group reportedly secretly took control of 60% of Integrated's 14 million shares in February 2017.

“The Respondents nominated candidates for the positions of directors and officers of Integrated, including Kumar's brother, who was also a bank signatory. The directors and officers followed the instructions of the respondents with respect to the company. A. Thindal was also a signatory bank to Integrated,” the notice states.

Core helped Integrated sell new shares to investors through private placements and as of June 2018 the group owned 49% of the company's 36 million shares.

Through promotional campaigns, Integrated's stock price rose from a low of $0.05 in January 2017 to a high of $2.02 in October 2018.

“During the Integrated Promotional Period, Respondents sold approximately 20 million shares for net proceeds of approximately $19 million,” the notice reads.

The third company allegedly used as a fraud vehicle was Block One Capital Inc., formerly Essex Angel Capital Inc. (Essex Angel), and now known as AI Artificial Intelligence Ventures Inc., also listed on the TSX Venture Exchange.

Similar to the other two alleged pumps and dumps, the group amassed shares of the company, this time from 2014. Amandeep Thindal then became a director and steered the company into cryptocurrency mining. Then Al Homsi promoted the company with misleading information and Core raised funds by selling private placements.

Part of Block One's promotion was the acquisition of a cryptocurrency miner, according to the commission.

Despite the company's claims about revenue generation, "Block One did not generate revenue from mining any cryptocurrency during Block One's promotional period," the commission said.

The notice does not provide specific examples of Luddu and Chopra's involvement in the scheme.

The group is due to attend its first appearance before the commission on October 12, in order to set a hearing date.

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