I was in this thing from day 1, not really because I chose to be, but because of Sandy. If they ever find the guy I'm sure he'll be penniless
More details are coming to light about one-time Toronto resident Sandy Winick, the alleged mastermind of a worldwide pennystock fraud believed to be on the run in Thailand.
Winick’s track record in business includes bankruptcy filings, a dizzying number of subsidiaries and companies that traded over-the-counter, and co-founding testosterone-laden cable channel Fight Network, which features boxing and mixed martial arts.
Winick, who U.S. authorities alleged this week ran the $140 million fraud ring, also has a taste for the highlife, as can be seen in a Star article profiling his home in 2005.
Winick, an aquarium enthusiast, and his wife Jodi spoke about elaborate plans for one salt water and one fresh water tank in their north Toronto home.
“People find it very calming, and soothing, Winick told the Star. “When we entertain downstairs, everyone sits around it. That is the reason why most people get aquariums, for peace and tranquility.”
Several former business associates of Winick contacted by the Star either didn’t respond to messages, or declined to comment about Winick and the charges against him. Fight Network also wouldn’t comment.
Stock market regulators in Canada and the U.S. have examined allegations of wrong-doing against Winick and delivered default decisions against him when he did not respond.
Last September, Winick was ordered by a judge in a case brought by the U.S. Securities and Exchange Commission to repay ill-gotten gains of $3.2 million (all figures U.S. dollars) plus civil penalties of $130,000 in connection with Blackout Media Corporation.
The judge in the case found Winick showed “repeated misrepresentations and violations of registration requirements.”
Judge Debra Freeman sided with the SEC, which alleged that Winick created 59 subsidiaries in Blackout for the sole purpose of selling unregistered shares in the companies and pocketing the proceeds.
The companies “had no legitimate business purpose, assets or operations” and Blackout, then known as First Canadian American Holding Company, “failed to provide any legally required financial reporting information for them,” the decision in the case reads.
The subsidiaries were spun off from April 2002 to May 2004, the SEC alleged.
Freeman also cancelled all Winick’s stock in Blackout’s subsidiaries and their successors and barred him from operating in penny stocks.
Winick, 55, and Gregory Curry, 63, who were both charged in connection with the international fraud scheme this week, have yet to be arrested, according to the U.S. Department of Justice.
Both men are residents of Ontario and Bangkok, Thailand, according to documents filed by the Ontario Securities Commission.
In total, four Canadians and five Americans were indicted on conspiracy, securities fraud and wire fraud charges. The scheme raked in $140 million from victims in more than 35 countries, according to the indictment.
The defendants allegedly sold shares in worthless shell companies as well as collecting bogus regulatory and legal fees related to the phony stock.
If convicted, the accused could face up to 20 years of imprisonment for each count of conspiracy to commit wire fraud, as well as up to five years for conspiracy to commit securities fraud.
In 2011, the OSC issued a cease trade order against a group of respondents that included Winick and Curry in connection with companies called BFM Industries and Liquid Gold International Corp.
A website created for BFM said the company was in the fertilizer business. OSC later confirmed it had no assets or operations, and its only source of funds was the sale of its own securities to investors, according to OSC filings.
The OSC documents show that the respondents raised nearly $298,000 (Canadian) from selling shares of BFM. Of that, more than half was used to cover Visa and American Express credit card payments for Winick and other respondents.
The commission said in a written decision issued late last week that the companies’ activities were fraudulent.
Sanctions against Winick and Curry, who have not responded to the allegations, are slated to be handed down by the OSC in mid-September.
Records from the Office of the Superintendent of Bankruptcy show that Winick filed for bankruptcy in 1983. Then living in Willowdale, he listed his total liabilities at $170,000, with $2,500 in assets.
In 1998, Winick registered a commercial proposal, an agreement where creditors are repaid part of what they are owed. He reported no assets and $371,000 in liabilities.
In 2005, Winick was among six people who helped launch The Fight Network. He left the fledging digital station in late 2007.
Leonard Asper, former chief executive officer of CanWest Global Media, bought a 30 per cent stake in the Fight Network in 2010 and became its CEO. The channel, which covers combat sports and fight lifestyle is carried across Canada and has 1.4 million subscribers.
Through a spokesperson, Asper declined to comment.
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