368538 Ontario Inc.
On February 23, 2009, Magaly Bianchini, President and a director of
Leader, indirectly through 368538 Ontario Inc. ("368538") acquired 2,421,000
common shares of Leader at a price of $0.51 per share pursuant to private
agreements with two shareholders. After completing the acquisitions, 368538
will hold 2,587,320 common shares, representing 17.79% of the outstanding
common shares of Leader.
368538 is making the acquisitions to increase its ownership of Leader for
investment purposes and may acquire ownership or control over additional
common shares of Leader depending on market conditions and other strategic
BTW, Leader ended up being a total failure
Deep River Holdings are associated with the Best Western Barclay Hotel in Port Alberni, with the principle owner known to once be best buddies with Charlie Dass.
What happened to $3.9 million?
Two families are suing a Port Alberni stockbroker, saying he took off with their money
David Baines
Saturday, October 11, 2008
For several generations, the Haack and Emblem families worked as dairy farmers on Vancouver Island. Their farms lie side by side, a half-hour drive north of Port Alberni.
LANCE SULLIVAN/SPECIAL TO THE VANCOUVER SUN
George Haack and his family sold their cows and milk quota and gave the proceeds of $625,000 to a Port Alberni stockbroker named Charles Dass. Haack says Dass absconded with the funds.
Several years ago, they each decided to sell their cows and milk quota and invest the proceeds with a Port Alberni stockbroker named Charles Dass.
The Emblems invested $3,275,000; the Haacks $625,000.
According to lawsuits they filed last year in B.C. Supreme Court in Victoria, Dass absconded with the money. Dass admits he provided the families with false account statements, but denies he misappropriated any money.
When it comes to their reactions, the commonality between the two families sharply diverges. The Emblems, crushed by the loss, are refusing to speak to the media.
The Haacks -- eager to put pressure on an RCMP commercial crime investigation into Dass's dealings, and a concurrent disciplinary action by the Investment Industry Regulatory Organization of Canada (the regulatory body for stockbrokers) -- are speaking out.
"That was my pension money. It's gone," George Haack, 51, the second of three generations of Haack dairy farmers, said in an interview this week.
Haack said Dass provided account statements showing the family had invested in low-risk investments. The statements were printed on the letterheads of the various financial services firms where Dass worked.
"It doesn't appear that any of them were real," Haack said.
Haack said that, of the $625,000 the family placed with Dass, only $100,000 has been accounted for.
"The rest disappeared," he said.
Dass, meanwhile, was living a life of luxury. He drove expensive cars and dined in high-end restaurants. In February 2003, he bought a two-acre lakefront property near Sproat Lake for $500,000. He subsequently took out three mortgages totalling $2.8 million, and did extensive renovations. He is now believed to be living in North Vancouver. He could not be reached for comment.
According to their statement of claim, Haack and his wife Colleen, and his parents, Lothar and Edith Haack, gave Dass $625,000 in various amounts from January 2000 to May 2001.
(Last week, I incorrectly reported that Dass had induced the two families to sell their cows and milk quota and invest the proceeds with him, but this is not the case. Both families did this on their own initiative. Similarly, there is no evidence that Dass induced any other clients to mortgage their assets to raise money for investment purposes.)
The Haacks said they paid the money to Dass personally, or to two private companies that he controlled, EFI Financial Services Ltd. and C.N.D. Investments Inc., where he was registered as an insurance agent from December 1998 to November 2006.
They claim Dass assured them he had invested their money in low-risk securities with either Dundee Insurance Agency Ltd., where he was also registered as an insurance agent from December 2002 to December 2006, or with Dundee Securities Corp., where he was registered as a stockbroker from January 2002 to July 2004, or with S&V Planning Corp. in Victoria. (Dass denies he was ever employed there.)
The lawsuit alleges that instead of buying low-risk securities, Dass diverted the money for his own use.
In an almost identical lawsuit, Reg and Marjorie Emblem, their son, Jerrald, and his partner Linda Hilmo claim they gave $3,275,000 to Dass in various amounts from January 2002 to July 2005 for investment in GICs and other low-risk investments.
According to their statement of claim, the Emblems paid the money to Dundee Securities, C.N.D. Investments and another private company Dass controlled, 658417 B.C. Ltd. (Why they gave money to Dass's numbered company is not explained.)
The lawsuit alleges that, instead of investing the money in low-risk securities, Dass "misappropriated and converted" the funds for personal purposes, including the purchase and improvement of his lakefront property on Sproat Lake.
In answer to each lawsuit, Dass has filed statements of defence, which thicken the plot considerably.
With regard to the Emblems, Dass agrees that Reg and Marjorie Emblem initially instructed him to invest in low-risk securities. But he says they later gave investing authority to their son, Jerrald, who instructed him to invest in high-risk investments, "specifically Micromem Technologies Ltd."
He said Jerrald told him not to tell his parents, as they would not approve.
Dass said he invested $1.2 million in Micromem in April 2005 and another $1.5 million the following month, as per Jerrald's instructions. To hide these investments from the parents, Dass said he sent false statements indicating the funds were invested in low-risk securities. He denied he misappropriated any money.
With regard to the Haack family's complaint, Dass denies they instructed him to invest their money only in low-risk securities. He claims all the family members asked him to invest "in an array of products, both low risk and higher risk."
More particularly, he claims, Colleen Haack instructed him to invest the parents' money in Micromem and not to tell them, as they would not approve. Once again, Dass said he sent false statements to hide the investment, as per her instructions.
In an interview, George Haack said the idea that his wife asked Dass to buy Micromem is "nonsense."
"I never heard of Micromem until Dass filed his statement of defence," he said, adding that, if the family bought any Micromem shares, they never received them.
Haack says he has met several times with RCMP commercial crime investigator Sgt. Andrew Cowan in Victoria and handed him relevant documents.
"I can confirm we are investigating the matter," Supt. Gordon McRae, the officer in charge of the section, said in an interview Friday.
Both families are also suing Dundee and all the other financial services firms that Dass worked for, on grounds they either breached their fiduciary duty or are vicariously responsible for their employee's conduct. The firms deny any liability.
So what is Micromem Technologies?
Micromem is a Toronto-based company which purports to be developing "next generation memory technology." Its shares trade on the notorious OTC Bulletin Board, a virtually unregulated trading forum in the United States.
The company's chairman is Salvatore (Sam) Fuda and the president is his son, Joseph Fuda. Both are controversial Toronto businessmen.
The Fudas and two other Toronto businessmen -- former stock salesman Louis Shefsky and former lawyer Simon Rosenfeld -- were directors in a Vancouver Stock Exchange company called Silversword Corp. in the late 1980s.
The stock soared to $7 in August 1989, then VSE officials learned that the company's majority shareholder, Terence Ramsden of London, had a murky business record.
In particular, Ramsden had been banned from Britain's racing courses after amassing $4.5 million in betting debts. He had also been accused of committing a $1.2 million VAT fraud. (He was later acquitted.) Furthermore, his company, Glen International, had just collapsed, leaving $367 million in debts and prompting a Scotland Yard investigation.
VSE officials halted Silversword stock for several weeks until they were assured that Ramsden had severed all ties with the company.
In 1990, a few years after leaving Silversword's board, Rosenfeld was fined $2.82 million by the U.S. Securities and Exchange Commission for masterminding a fraudulent U.S. stock scheme. In 2005, he was sentenced to four years in jail by a Toronto judge after being caught in a FBI-RCMP money-laundering scheme.
In 1995, Ontario Securities Commission enforcement staff alleged that Joseph Fuda's brokerage firm, Glendale Securities, along with salesman Louis Shefsky (who figured in the Silversword promotion), had directed or caused the manipulation of penny stock called Selby Green Information Services Ltd. This enabled the firm to make about $750,000 in illicit trading profits.
In January 1997, Shefsky agreed to a three-suspension of his broker's licence. Fuda maintained he was not aware of any wrong-doing, but nevertheless agreed that Glendale would pay $100,000 in costs and submit to a third-party review of its practices.
The Fudas have since been implicated in other controversies by the Toronto media. Several years ago, Salvatore Fuda complained that he was being falsely tied to organized crime. Believing that these rumours stemmed from police files, he asked an Ontario court to force RCMP to turn over any information they had on him and his business interests. The court refused.
Under Fuda's stewardship, Micromem's share price rocketed to more than $21 in early 2000, but the company failed to live up to its billing. Since its inception, it has not generated any sales and its cumulative losses now exceed $65 million. The stock is now trading at 90 cents.
Last week, I talked to several Port Alberni residents who said Dass was very keen on the stock and recommended it to them and many other people in the area. Many of them bought shares.
Micromem is believed to figure in IIROC's disciplinary action against Dass, but particulars have not been released. Dass is arguing that IIROC has no jurisdiction to pursue former members, as he is.
Arguments were heard by B.C. Court of Appeal in May and a decision is pending. Meanwhile, IIROC's notice of hearing is being kept under wraps.
dbaines@vancouversun.com
Market Data 
Markets 
