DD Support Board and Research Team

[nodummy]

Alleged fraud linked to Victoria property deals

By David Baines, Vancouver Sun March 5, 2011

http://www.vancouversun.com/business/Alleged+fraud+linked+Victoria+property+deals/4389193/story.html#ixzz1FkVc4pWC

I have found more information about Colin Heatherington, the Victoria stock trader who has been cited by the U.S. Securities and Exchange Commission for his role in an alleged $63-million stock fraud.

On Wednesday, I reported that Heatherington had used the proceeds of this alleged scheme to live large. In June 2007, he bought a beautiful mansion in the affluent Uplands area of Victoria for $7.74 million, and the following year he acquired a 70-foot luxury motor yacht (estimated retail value $2.5 million) with his alleged co-conspirators, Florian Homm of Majorca, Spain, and Todd Ficeto of Malibu, Calif.

In July 2009, Heatherington sold his mansion and rented a waterfront home at 518 Lands End Road in North Saanich from well-known Arizona lawyer Daniel Cracchiolo. The property's assessed value is a more modest $1.74 million. He stayed for about a year, then moved out. That's when the trail went cold.

SEC officials are anxious to keep Heatherington on their radar screen. In a complaint filed last week in U.S. District Court in California, the agency alleged that, from September 2005 to September 2007, Heatherington, Homm and Ficeto acquired shares of a handful of junior companies, manipulated their share prices upward, then caused a hedge fund company to buy those shares at artificially inflated prices.

When the scheme collapsed in September 2007, the hedge funds, managed by London-based Absolute Capital Management Holdings Ltd., were left holding $440 million to $530 million in essentially worthless stock.

The SEC alleges that Heatherington, who worked in Spain during the relevant period, and his two associates generated "at least $63.7 million in illicit proceeds," of which $11.6 million accrued to Heatherington.

The Absolute hedge funds are also interested in keeping tabs on Heatherington's whereabouts. They have filed a lawsuit in New York alleging he reaped "enormous personal benefits, perhaps as high as $25 million."

While I speculated that Heatherington was probably still living in Victoria, I wasn't able to confirm this until Friday. That's when I learned he lives in a condominium complex at 1206 Fort St.

I also learned that he is 36 years old, separated or divorced, and has a child who attends St. Michaels University School, an exclusive private school in Victoria. The annual tuition cost is $16,000.

Until a few days ago, he was leasing a fire-engine red 2010 Ferrari 458 Italia, which has a base retail price of $288,000, but runs to $340,000 with options.

According to personal property records, he also leases a 2009 BMW 328i convertible (base price $56,000) and a 2010 Mercedes-Benz GL550 (base price $88,600).

More substantially, I learned Heatherington is a co-director of a B.C. numbered company, 870992 B.C. Ltd., along with Victoria businessman Tim Quocksister.

The numbered company is the registered owner of a former Traveller's Inn at 626 Gorge Road East in Victoria, which, according to the Times Colonist, was acquired by Quocksister and an unnamed partner in December 2009 for $1.38 million.

The numbered company is also the registered owner of another former Traveller's Inn at 2828 Rock Bay Ave. in Victoria. According to the Times Colonist, Quocksister and an unnamed partner bought the property in February 2010 for $1.9 million.

Both facilities are run by City Metro Properties Ltd. under the name City Metro Suites. The units are rented to people who live on modest incomes or government assistance.

I called City Metro Properties' office on Friday and asked for Heatherington. I was told that he was out of the office but would be back at about 2 p.m.

When I called back later in the afternoon, a person named Scott Davies answered the phone. He said Heatherington used to work there, but no longer did. "He just comes in to get the mail," he said.

When I noted that the numbered company, of which Heatherington is a director, is the registered owner of both properties, he said Heatherington used to have an interest in them, but no longer did. He said he and Quocksister are the owners.

I told Davies that I had heard that Heatherington was the money behind this company, but he denied this. "At one point he was, but not any more," he replied.

That poses the question: If Heatherington has pulled his money out of this venture, where has it gone? There are regulators in California and lawyers in New York who would no doubt like to know.

[e-mail]

Read David Baines' blog at www.vancouversun.
© Copyright (c) The Vancouver Sun

http://www.vancouversun.com/business/Alleged+fraud+linked+Victoria+property+deals/4389193/story.html#ixzz1FkVc4pWC