Pharm Control Ltd. (fka PMCL)

[PhillyPA65]

SEC Target Boock Says He Confessed Under Duress

2011-02-07 14:44 ET - Street Wire

by Mike Caswell

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1806608&symbol=*SEC&news_region=C

Irwin Boock, the Ontario man facing a civil suit in New York for hijacking the identities of 43 public companies, has asked the judge to ignore a videotaped deposition in which he admitted to the charges he faces. In an affirmation filed on Feb. 2, 2011, he says that he made the admissions while under "severe duress." His wife had been in hospital with heart problems, and he had slept very little.

The U.S. Securities and Exchange Commission claims that Mr. Boock and others stole the identities of inactive companies and sold them as shells. The stocks produced from the scheme included a shell that became Paramount Gold and Silver Corp., a Toronto Stock Exchange listing. (The SEC did not accuse Paramount of any wrongdoing.) Mr. Boock initially ignored the case, which resulted in the judge finding him in default. Since then, Mr. Boock has been trying to have the default overturned, and has been attending pretrial matters as directed.

One of those matters was a videotaped deposition, which was conducted by SEC lawyer Justin Chretien. The interview took place in Toronto on Jan. 13, 2011, and Mr. Boock attended alone, without a lawyer. According to a transcript of the deposition, Mr. Boock agreed that he would admit to the allegations as a sign of good faith, and that nobody had promised him anything in return. The transcript includes Mr. Chretien confirming that Mr. Boock was not under duress, and nobody was coercing him.

Two weeks after the interview, the SEC filed a motion asking the judge to uphold the default order, and included a partial transcript of the interview with its request. It said any attempt to set aside the default would be moot, as Mr. Boock had admitted to the allegations.

Boock says he was under duress

In his self-filed affirmation, Mr. Boock says the judge should consider the total circumstances of the interview. He claims that his wife's heart problems affected his mental and physical state that afternoon. Two days earlier, an emergency room doctor had informed her that she had a one in seven chance of suffering a heart attack in the next few weeks. He slept very little after that, he says.

The affirmation also states that Mr. Boock was suffering the effects of medication that he was taking for heart problems of his own, which reduced his general awareness. "Quite frankly, Mr. Chretien could have had me admitting to murders in countries I had never been to if he so wanted," the document reads.

Mr. Boock further contends that he discussed a settlement with Mr. Chretien off the record, before he made any admissions. "The crux of the discussion was that in order to reach a settlement, I would expect that my wife [who is a relief defendant] would be removed from any further actions; any monetary discussions would take place down the road and Mr. Chretien stated that he would file a request with the court to stay any further actions against both myself and my wife," the affirmation reads.

Mr. Boock claims that the SEC has ignored the truth "in order to have its way." He reiterates his earlier request that the judge set aside the default, and allow him to file a proper defence to the case.

SEC's complaint

The SEC filed a civil suit against Mr. Boock and others on Sept. 29, 2009, in the Southern District of New York. The other defendants were Stanton DeFreitas, 33, of Toronto; Jason Wong, 32, of Markham; and two Houston lawyers, Roger Schoss, 64, and Nicolette Loisel, 52. The SEC also named Select American Transfer, a transfer agent run by Mr. Boock, Mr. DeFreitas and Mr. Wong. Mr. Boock's wife, Birte Boock, was a relief defendant, which means that the SEC may ask for a monetary order against her.

The suit claimed that the men ran a four-year scheme, starting in November, 2003, in which they hijacked the identities of inactive pink sheets companies. They typically sought stocks that still traded, but lacked a current transfer agent or contact person. Once they located a suitable target, they reactivated the company through the appropriate secretary of state, providing false names and addresses for contact information, the complaint stated.

In some instances, the men discovered that the secretary of state had declared a company void, the SEC said. When this happened, they incorporated a new entity with the same name and used it to assume the identity of the old company. They would then roll back the stock, change the company's name and obtain a new Cusip number, the SEC claimed.

The SEC did not state exactly how much money the defendants made in the scheme. According to the complaint, Mr. Boock received $267,625 in 2007 by selling shares of five of the hijacked companies through a Florida brokerage account. The SEC also claimed that Mr. DeFreitas sold shares of 30 hijacked stocks through offshore companies. He had his brokerage, New Jersey-based Franklin Ross, transfer $2.2-million in proceeds to a Toronto bank account.

The SEC sought appropriate civil penalties and penny stock bans.

Other defendants in the case have filed answers in which they generally deny any wrongdoing. Mr. Wong also filed a motion to dismiss the charges, in which he said that he was simply a software developer at Select American Transfer. The judge denied his motion on Jan. 29, 2010.

The judge temporarily stayed the case against the two Houston lawyers, Mr. Schoss and Ms. Loisel, while they answered criminal charges in Florida for a separate hijacking scheme. According to prosecutors, they were part of a group that hijacked 54 companies and sold shares in those companies to residents in the United Kingdom, taking over $100-million from investors. Mr. Schoss and Ms. Loisel have pleaded not guilty and await trial.

On March 13, 2008, the SEC halted 26 of the stocks that were produced in Mr. Boock's scheme, citing questions about their status as publicly traded companies. The companies have since resumed trading, and the SEC did not name any of them as defendants in its lawsuit.

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1806608&symbol=*SEC&news_region=C