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Volume 17, Number 11
October 24, 2011
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economy

Also in this section:
Anton beach land grab scandal reaches into Martinelli's inner circle
Local forex trading scam victims win partial victory in a Canadian court
Italy's foreign minister denies what photos show, more questions raised about aid to Panama
Santo Tomas doctors walk out, others may join them
Changes in the regional oil market
NAFTA starves Mexico
Crisis reaches far beyond the European Union
CEPAL, FAO call for region to close technology gaps and increase food production
Chinese investments boost Brazil's rise as a regional power
International climate change negotiations in Panama
Latin American conference on marine energy
Free trade is not so free
Tax printers: a big expense for many small businesses


The seal from the letterhead created by Mary Sloane's London Asset Management and used on documents concocted by David Roland and given to the scam victims, and which were accepted into evidence by a Canadian court. Despite this, the judge found that there was no misrepresentation that Sloane's "London Asset Management" had an office in London. In fact, its only office was Mary Sloane's house in Playa Blanca, and the incorporation under the name "London Asset Management" in Panama and claims on its documents that the company had a London office were for the purpose of misleading people into confusing Sloane's operation with the established Royal London Asset Management that does operate out of London.

Court cites Canadian concept of the corporate veil to limit ruling against broker who concocted false back-dated forex trading report, finds negligence instead
Playa Blanca scam victims win partial victory in Canadian court
by Eric Jackson

Ms. Sloane had arranged for Mr. Roland to meet with potential investors on that occasion, after learning that he was going to be in Panama to do some banking business for LAM. It was at this reception that the representations at the heart of this lawsuit were made. ... She introduced Mr. Roland as a person she had met through mutual business associates and stated that LAM was involved in forex trading and that Mr. Roland would discuss the “wonderful opportunity” that he had become aware of. ... Mr. Roland said he had met the traders and was “very impressed” with them. He had prepared trading histories to distribute to the plaintiffs and others as marketing materials demonstrating the traders' skill. Finally, he gave his presentation in response to the specific request of Mary Sloane to meet with the individuals with whom she had been speaking about a potential investment in LAM in order to provide further information about LAM and his role with the company. ... Mr. Roland made two material misrepresentations of fact. The first related to the historical trading statements he created for the January 2007 presentation and provided to potential investors showing rates of return in excess of 50% per annum. Mr. Roland created his summaries and bar graphs from account statements disseminated by Mr. MacCaull and Mr. Eisner which the defendant admits were based on fictitious trading activity.
British Columbia Supreme Court judgment
Brausam v. Roland
Justice Lauri Ann Fenlon

Mary Sloane and London Asset Management did not, in fact, steal their money or try to defraud.... I have not seen any thing (at all) convincing that would indicate any intend to defraud or "scam" members of the English speaking expatriate community here in Panama or elsewhere on the part of London Asset Management or Mary Sloane. ...
Don Winner
Panama Guide

Not mentioned in the judgment is the fact that Sloane was cited by the BC Law Society in January 1992 for misappropriating client funds, making false statements to the law society, breaching accounting rules, and failing to notify the law society of court judgments against her. She admitted her misconduct, tendered her resignation and agreed not to apply for reinstatement for three years. As it turned out, she never reapplied.
David Baines
Vancouver Sun

I realize that you may have no interest in any of this but it would certianly enable you to expose Eric Jackson totally for irresponsible reporting and lying for gain. [Sic.]
Mary Sloane
Panama Guide

When the BC civil suit was filed against Roland, meeting the legal definition of residency made it difficult to include Mary Sloane as she was no longer living in BC.
Mike Brausam & Wendy Reaman

Great job Don. Even handed and well researched. Thank you. Live Abundantly,
Mary Sloane
Panama Guide

In about May 2006, Mr. Roland was retained as a consultant by two Richmond businessmen, John Gillespie and Keith Wilson, to provide them with advice about structuring a limited partnership they were considering in British Columbia. During his dealings with Mr. Gillespie and Mr. Wilson, he learned that they were principals of a Panamanian company, Europa West Investments, S.A. ... About three months later, Mr. Gillespie and Mr. Wilson contacted Mr. Roland and told him they had incorporated a new entity in Panama called London Asset Management Inc. (“LAM”) to trade in forex on behalf of Europa West's clients. ... Mr. Wilson and Mr. Gillespie introduced Mr. Roland to Mary Sloane, a retired lawyer from British Columbia who was living in Panama and working for Europa West. Ms. Sloane arranged for clients to sign a contract with LAM and deposit funds into LAM's Panamanian bank account. ...
British Columbia Supreme Court judgment
Brausam v. Roland
Justice Lauri Ann Fenlon

There is no background information on Gillespie or Wilson in the judgment, but I know something about them. Both are former associates of now-deceased Richmond businessman Nick Thill, who for decades packed and promoted charitable donation and other tax-driven schemes that were routinely disallowed by Canada Revenue Agency and subjected to cease trade orders by securities commissions throughout Western Canada. One of the disallowed schemes promoted by Gillespie and Wilson, the Canadian Literary Enhancement Society, which I reported on in December 2003, involved Europa West.
David Baines
Vancouver Sun

In the case before me, Mr. Roland had a direct financial interest at stake: if the plaintiffs invested in LAM he stood to receive a fee per lot traded. Further, his remarks were part of a deliberate presentation to potential investors about putting money into forex through LAM. The fact that the presentation was delivered at a wine and cheese reception held to attract investors to that presentation does not make the advice less deliberate. This was not a chance encounter between Mr. Roland and the plaintiffs during which Mr. Roland casually mentioned an opportunity. ... There is no doubt that Mr. Brausam relied on the advice Mary Sloane gave him about investing through LAM. ... I find that Mr. Brausam relied on both Mary Sloane's advice and the representations made by Mr. Roland. ... The parties agree that the plaintiffs lost close to $600,000 due to their investment in LAM. ...
British Columbia Supreme Court judgment
Brausam v. Roland
Justice Lauri Ann Fenlon

Not mentioned - either at the reception or in the judgment - is the fact that Roland, through his company Quadrant Pacific Capital Corp., has packaged and promoted many investment deals that have been disastrous for investors. They include orange groves and coffee plantations in Costa Rica, and a hemp processing plant in Quebec. Investors were enticed by glossy brochures, aggressive cash flow projections and large tax deductions. But this was very risky business, exacerbated by related-party transactions and hefty fees. Few of these deals lived up to their billing. Investors lost tens of millions of dollars.
David Baines
Vancouver Sun

[T]he plaintiffs cannot establish the absence of a juristic reason for Mr. Roland receiving compensation from LAM. Mr. Roland was paid by LAM because he had a contract to provide services to the company.
British Columbia Supreme Court judgment
Brausam v. Roland
Justice Lauri Ann Fenlon

Reading the Reasons for Judgment has stirred up mixed emotions. Immense relief to finally have some form of justice, but also disappointment to discover that although Justice Fenlon ruled negligent misrepresentation was proven, David Roland can keep all the fees he made on the funds investors lost. ... Although Roland is technically a victim of the Razor FX Ponzi scheme due to the investment of $70,000 he made in Elite FX, it is hard to accept him as a victim since he collected fees in excess of $600,000 on the total funds invested and subsequently lost by the LAM investors.
Mike Brausam & Wendy Reaman

I find that the plaintiffs' conduct in the case before me contributed to their loss for two reasons. First, the rate of return described at the reception and confirmed by the monthly trading statements they received for their investments would cause a reasonable person to question how that could be so. To put it colloquially, if something seems too good to be true, it probably is. ... Second, the plaintiffs should have read and considered the contract provided to them by LAM which described in great detail the risky nature of forex trading.
British Columbia Supreme Court judgment
Brausam v. Roland
Justice Lauri Ann Fenlon

A Canadian court has found one member of a team of veteran Vancouver scam artists liable for what it characterized as a "negligent" misrepresentation that bilked a Playa Blanca couple out of nearly $600,000, but held that the victims' own negligence contributed 40 percent of the loss that they suffered. That's still a judgment for $357,390 (all figures herein are in US rather than Canadian dollars) plus interest, however without any guarantee that the judgment can be collected.

The court rejected arguments that all of the money collected from from the victims should be refunded as an unjust enrichment, holding that the individual who forged fake income reports used to lure people into investing their money was not the "alter ego" for London Asset Management, SA (LAM) a Panamanian corporation formed and promoted to imitate the name and reputation of a British company, Royal London Asset Management, as he was shown to be neither an owner or officer of the company. The founders, officers and probable beneficial owners --- Panamanian corporate secrecy doesn't allow people to know the latter fact --- of London Asset Management included Mary Sloane, a sometime Playa Blanca resident who had been run out of the legal profession in British Colombia for stealing from her clients and lying about it to the Law Society of British Colombia; and John Gillespie and Keith Wilson, two veteran phony charity scam operators who had frequent run-ins with Canadian authorities. But some of the checks made out to London Asset Management by the victims turned up going into the accounts of Roland's own companies, including a horse farm in Costa Rica.

There are pending cases and unanswered questions still dangling in this affair, some of which may never be resolved. These include:

  • The precise relationships among Roland, Sloane, Gillespie, Wilson and several other Canadian hustlers and their companies, and the US-based Razor FX ponzi scheme, which was run by Bradley Eisner and Michael MacCaull. MacCaull was on probation for a prior securities fraud conviction when he hatched Razor FX and any Google search of his name would have revealed his conviction. That Sloane, Roland, Gillespie and Wilson, all veteran scam artists in their own rights, would have not known about the man is curious. They say that they lost money to Razor FX, too --- but they took much more in commissions from the people whom the operation bilked through their efforts and it leads one to wonder if the alleged losses were in good faith, or just accounting exercises to set up defenses for when the scheme would inevitably fail.

  • There are millions of dollars worth of cash and assets in the custody of a US federal court resulting from seizures from MacCaull, Eisner and Razor FX. London Asset Management, Mary Sloane and David Roland are among the claimants for these funds, as are a number of other victims in Panama. Sloane and her supporters in Panama reached out, through Don Winner's Panama Guide and otherwise, to some of the victims to turn them against Brausam and Reaman, with pitches ranging from the crudest of personal slurs to arguments that if Brausam and Reaman won their legal battles, it would diminish the chances for other London Asset Management victims to recover any of their losses. It remains to be seen how the Canadian case might affect the distribution of seized assets to Razor FX victims. One possibility is that a US court could take the Canadian factual findings as to Roland at face value but apply US law and bar him from recovering anything from the Razor FX asset pool.

  • There is a Panamanian criminal complaint outstanding, effectively blocked in the Panamanian courts. In the Canadian case it turned out that acting on behalf of London Asset Management, Roland transferred some $70,000 to Sloane for legal fees. Panamanian lawyers are very expensive, but it generally takes only $20,000 to bribe Panama's Supreme Court to make a case like this go away, and meanwhile neither Sloane nor Roland were ever called in to testify, let alone put on trial, over the criminal complaint. A US court could look at those circumstances, find that $70,000 in legal fees could not be justified, take judicial notice of what has happened in the case and of the Panamanian legal system's reputation, and find that neither Sloane, Roland nor London Asset Management have the clean hands required to get such equitable relief as a share of the forfeited assets pool. There is also the possibility that the criminal case here could be brought back to life, with an unpredictable ending.

Meanwhile, Wendy Reaman said that she and her husband got a judgment, not a check. The former Ontario farmer couple found it hard to summarize what they have been through in three years and nine months of legal battles, but had this to say to people in the community here:

There is so much that people should know, especially the LAM investors. To those who have supported us, we are so very grateful. To those who did not judge us nor took sides, we are also grateful. Perhaps the anger some of the other LAM victims displayed against us would have been better served working with us.

We still hope to find justice here. There is far too much white collar crime all over the world, with very few of the perpetrators being held accountable for destroying people's lives.







Also in this section:

Anton beach land grab scandal reaches into Martinelli's inner circle
Local forex trading scam victims win partial victory in a Canadian court
Italy's foreign minister denies what photos show, more questions raised about aid to Panama
Santo Tomas doctors walk out, others may join them
Changes in the regional oil market
NAFTA starves Mexico
Crisis reaches far beyond the European Union
CEPAL, FAO call for region to close technology gaps and increase food production
Chinese investments boost Brazil's rise as a regional power
International climate change negotiations in Panama
Latin American conference on marine energy
Free trade is not so free
Tax printers: a big expense for many small businesses

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