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Canadian authorities warn of First Global Ventures SA

Panama remains a venue of preference for foreign scamsters

by Eric Jackson

Has anything changed since Ana Matilde Gómez replaced the notorious pro-corruption José Antonio Sossa as Attorney General? To be fair, some things have indeed changed. But also to be fair, a worldwide criminal element still sees Panama as a good headquarters for international fraud; the crooks who run various investment scams have been able to recruit leading Panamanian public officials as fronts; and there are still very few prosecutions for international frauds by this country's Public Ministry.

The latest example in point is First Global Ventures SA. On May 12 the New Brunswick Securities Commission ordered this Panamanian company and its promoter, one Allen Grossman, and all persons acting as officers, directors, employees or agents for this company or this individual, to cease and desist from promoting or trading in any securities in that Canadian province. The provincial order followed upon similar actions taken against prior Grossman operations, Maitland Capital Ltd, Limelight Capital Management Ltd, and Limelight Entertainment Inc.

Later, on May 30, the Newfoundland and Labrador Department of Government Services warned investors in that province that First Global Ventures SA is operating illegally there to the extent that its telephone boiler rooms "cold call" people to sell securities in the company. In both New Brunswick and Newfoundland, authorities have relied on the easiest cases to prove, that First Global Ventures is selling securities while not being registered to do so.

That also seems to be the case here. The company is not registered with our Comision Nacional de Valores (CNV) to sell securities in Panama. Our calls to the company here encountered nobody answering the telephone, and we don't see the company listed as a licensed securities broker with the CNV, which it must be in order to sell any sort of investment securities here.

Yet on its website --- http://www.firstglobalventures.com --- First Global Ventures, which lists its address as on the 18th floor of the Edificio Ocean Business Plaza in Panama City, spins a tale about an "investment team" that "combines a range of disciplines" with a "track record of success in venture capital." It sure sounds like what they are selling is shares in an investment portfolio.

The website describes an investment in oil and gas exploration, wherein they claim to be on the ground floor of "play currently under investigation in the state of Israel [which] has the potential recoverable hydrocarbon reserves to match the current output of Iraq!" (Gee, hasn't warfare all but shut down the Iraqi oil and gas industry? So when you think about it, this claim may not be absolutely false on its face, even if it uses exclamation points to implicitly describe possibilities that amount to nothing.)

No shady international investment scheme is complete without a Nigerian angle, and First Global Ventures claims one of those, too: PCTC, which the website says "is establishing a television operation in Lagos, Nigeria."

There is also a miracle cure pitch, in the form of a company in which they imply First Global Ventures has an interest:

         SCPI a Nevada corporation plans to open, subject to Nevada’s legislative approval, a Stem Cell Clinic, the first one of this type in Nevada and in the US. Its main asset, the stem cell telomerase modulated placenta implant, had been developed by Alfred T. Sapse M.D. (ret) who many years ago had used placentas, the richest source of stem cells, in the treatment of diseases, some of them with unknown origin, and unknown treatment. Among them Alzheimer’s, Parkinson’s, Aging Diseases, Multiple Sclerosis, Lupus Erythematosus, Strokes, Heart Repair, Prostate and Breast Cancer, Spinal Cord Injury, Retinitis Pigmentosa, and Macular Degeneration. At that time Dr. Sapse witnessed with amazement the outstanding results obtained, without knowing that they were due to stem cells....

The website goes on to add:

Portfolio’s [sic] Pending

Canadian Gold Mine Opportunity

Canadian Diamond Mine opportunity

African Gold Mine opportunity

Anticipated subscription completion date: May 2006

It all sounds very much like a pitch for investors to buy securities, but see the boilerplate denial on the opening page of the First Global Ventures website:

Disclaimer

Please read our disclaimer before proceeding into our site.

The information and material presented herein are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments in any jurisdiction. We have not taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. The investments contained or referred to herein may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing herein constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. We do not advise on the tax consequences of investments and you are advised to contact an independent tax adviser.

BY CONTINUING TO USE THE SITE, YOU ARE INDICATING YOUR AGREEMENT TO BE BOUND BY THE TERMS OF THIS AGREEMENT. IF YOU DO NOT AGREE, FIRST GLOBAL VENTURES S.A. IS NOT WILLING TO PROVIDE YOU WITH ACCESS TO THE SITE AND YOU SHOULD IMMEDIATELY DISCONTINUE YOUR USE OF THE SITE.

FIRST GLOBAL VENTURES S. A. may modify this Agreement from time to time in its sole discretion and your continued use of the Site shall constitute acceptance of such modifications.

FIRST GLOBAL VENTURES S. A. believes the contents of this Web Site to be accurate and reliable but makes no guarantees as to its completeness and shall assume no responsibility for errors or omissions contained therein.

NEITHER FIRST GLOBAL VENTURES S. A. NOR ANY OF ITS INFORMATION PROVIDERS, PARENTS, MEMBERS, SUBSIDIARIES, AFFILIATES, SERVICE PROVIDERS, LICENSORS, OFFICERS, DIRECTORS OR EMPLOYEES SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR RESULTING FROM THE USE OR THE INABILITY TO USE THE SITE, INCLUDING BUT NOT LIMITED TO DAMAGES FOR LOSS OF PROFITS, USE, DATA OR OTHER INTANGIBLE DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

Such purported disavowals are also one of the classic badges of fraud, but in a series of cases involving the notorious Marc M. Harris, the CNV held and the Supreme Court upheld the principle that the requirement to register and be licensed before engaging in the investment business is a function of one's offering to sell or broker the sale of interests in business propositions, no matter the label that one puts on the activity or the disclaimers that one makes.

The fact that they have been selling securities out of Panama and in Canada is not the only thing that Mr. Grossman, his associates and First Global Ventures might want to disavow. There is also a troublesome past that they may want to spin or deny.

As Rick Hancox, the executive director of the New Brunswick Securities Commission, put it, "this appears to be the work of a serial scam artist." In fact the New Brunswick and Newfoundland - Labrador authorities were investigating Grossman with respect to his alleged violations of standing orders issued by those and other Canadian provinces to stop his promotions of investments in his Maitland and Limelight networks of companies. In the course of those investigations New Brunswick's commission discovered the First Global Ventures website which, the commission said, was created by an Ontario web design firm and "appeared to be largely copied from the website of a legitimate equity-management firm."

Why would Canadian securities regulators have acted against Grossman's prior ventures? This past January 24, the Ontario Securities Commission held that:

Maitland and its representatives including the individual respondents, have made misleading misrepresentations to investors, including representations regarding the future listing and future value of Maitland shares with the intention of effecting sales of Maitland shares contrary to s. 38 of the Securities Act and contrary to the public interest.

This action followed similar conclusions made by securities regulators in the provinces of Alberta and Saskatchewan. Through its boiler room callers Maitland claimed to have oil leases in Alberta and an agreement with an obscure Chinese company, Waeet International Ltd, and, predicting that energy prices were about to go through their already high roof, said that people who bought shares stood to quickly increase their investment eight-fold.

The Limelight companies, purportedly in the television production business, were promoted using similar tactics.

In both the Maitland and Limelight cases, the underlying assets that were claimed appear to be essentially worthless, and the legal requirements to file prospectuses and other statements with securities commissions --- and to undergo registration procedures that, among other things, are designed to weed out the criminal element --- were ignored.

And it seems that there would likely have been problems had Maitland, Limelight or First Global Ventures tried to register in any Canadian province. Mr. Grossman's scam series, so it seems, does not start in Canada. Before moving to Toronto he was involved in a US-based scheme to sell sight unseen gemstones to gullible investors. At least one Canadian who claims to have been taken for $2,500 by the Maitland pitch says that there are American charges pending about the gem business, but as Canada and the United States have extradition agreements for that sort of thing and The Panama News has not been able to confirm the existence of any such US charges, that claim may be erroneous. The gemstone affair did, however get some television coverage that Grossman surely would not have wanted.

In a vitriolic response to Canadian regulators published on the Maitland website, Grossman said that "for the most part, the allegations are frivolous and without merit. They are fabrications, fantasies and in some instances outright lies being propagated by over zealous arrogant bureauocrats more concerned about justifying their own existence...." He also sets up an excuse no doubt to be raised in the event of criminal proceedings and in response to investors who claim that they were the victims of a swindle: "The capital that should be used to develop and further the project for the benefit of shareholders is now being diverted to our legal teams to fund our defense of the illegal attacks of the various commissions. How long can we fund these legal battles? That remains to be seen. It is an outrage!"

Similarly, on the First Global Ventures website, one "Alan Marsh, Sr. V.P." issued the following missive:

Recently, one of the many Canadian securities commissions have seen fit to make frivolous allegations about FGV and its business practices and to issue their version of a cease trade order. Those of you that have been with us for sometime know that these types of allegations are without merit and not worthy of a response. We anticipate the redundancy of the Canadian securities regulatory system to have a ripple effect and therefore we expect all of their other jurisdictions to follow the same misguided direction.

Those of you new to FGV will appreciate our first priority…which is to provide you with maximum confidentiality. We will not under any circumstances divulge any of your private account information to any regulatory body for any reason.

This is not the first time we have had these kinds of intrusive information requests made under the guise of a regulatory body of a foreign jurisdiction. These types of outlandish demands regarding investor’s private information are made by bureaucrats whose sole function and purpose is to undermine and eventually eliminate your democratic right to privacy.

As mentioned above, under no circumstances will we capitulate to this kind of harassment. Rest assured, unless you specifically request us to release your account details to a third party, we will ignore all such intrusions.

It all sounds so familiar to those of us who have covered the use of Panama as a base for international wire frauds over the years. But from this end, the questions to be answered in deeds rather than words are definitely not about the private affairs of those who have invested their money in Al Grossman's schemes. They are about which, if any, Panananian government officials' protection may have been obtained, and what the CNV and the Public Ministry will do about this latest hustler incursion.