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$14m. probe

by Shawn Cumberbatch

securitiesandexchangecommissionBarbados’ banking sector is again under external scrutiny, with American securities officials claiming that more than $14 million gained through an illegal scheme operating up to last year was deposited in a bank account here.

While the related acts are alleged to have taken place three years ago, it has now come to light as part of a United States Securities Exchange Commission investigation and subsequent complaint against several companies and individuals the agency alleged were involved in “a fraudulent international ‘pump-and-dump’ scheme involving two publicly-traded US-based companies: Tradeshow and Pacific Blue”.

The US SEC has filed litigation in a New York court in an attempt to get the millions of dollars it believes are still in Barbados “repatriated” to the US.

The name of the Barbados bank was not given, but documents seen by Barbados TODAY, said the money was sent here in four separate transactions between February and June 2010. American securities regulators alleged that in February 2010, Ben Kirk and Dylon Boyle wired more $6.8 million in Tradeshow proceeds “from nominee accounts they held at Scottsdale to an account at a bank in Barbados”.

Then, they claim, the same duo sent another $3.4 million in Pacific Blue proceeds “from nominee accounts they held at Scottsdale to an account at a bank in Barbados”.

Additionally, the US SEC told the court that in June 2010 Kirk and Boyle wired more than $900,000 in Pacific Blue proceeds “from nominee accounts they held in Turks and Caicos to an account in Barbados”, and also that in that same month $3 million more in Pacific Blue proceeds was also wired from nominee accounts Ben Kirk held at Gibraltar to an account in Barbados.

“The primary goal of the scheme was to enrich certain stock promoters by ‘pumping’ up trading in the stock of Tradeshow and Pacific Blue with false and misleading promotions, purportedly based on ‘independent’ research, and then secretly ‘dumping’, that is, liquidating the promoters’ shares into the artificially inflated demand they created,” the US SEC said in its complaint.

“Tradeshow and Pacific Blue were controlled by a group of Canadian stock promoters: John Kirk, Ben Kirk, Dylan Boyle and James Hinton. The Kirks, Boyle and Hinton secretly took control of the companies and then ‘pumped’ those companies’ stock price by sending investors false and misleading email blasts from two stock-touting websites they controlled – Skymark Research and Emerging Stock Report. They also hired a ‘boiler room’ of individuals who called US investors to tout the stocks, falsely claiming they were providing independent research,” it also alleged.

The US SEC’s Regional Director, Andrew M. Calamari, in a 50-page March 2013 submission US District Court Southern District of New York submission said the Kirks, Boyle and Hinton earned more than $22 million in “illegal profits” Selling Tradeshow and Pacific Blue Shares.

“The Kirks, Boyle and Hinton profited by selling millions of shares of Tradeshow and Pacific Blue into the increased demand created by their promotions. Most of these sales were made using at least eight different offshore nominee entities, through accounts controlled by Ben Kirk and Boyle,” he said.

“Proceeds of the sales were then wired to the Gibraltar accounts of the Kirks, Boyle, Hinton and others, to accounts held at a bank in Barbados, and to the Carrillo Huettel Trust Account.

“Carrillo and Huette! allowed the Carrillo Huette! Trust Account to be used by John Kirk and Hinton as their de facto bank account. Fraudulent ‘pump-and-dump’ proceeds were funneled from offshore accounts to the Kirks, Hinton, and other conspirators through the Carrillo Huette! Trust Account,” the allegation added.

The US SEC wants the court to take a number of measures, including ordering the defendants to repatriate the identified funds from Barbados and elsewhere.

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