Bermuda Short: Indictment facts
Three directors of Bermuda companies have been arrested in connection with a two year undercover securities fraud and money laundering investigation involving over $200 million in attempted fraudulent securities sales. In total there were 23 indictments, against 58 individuals, made last week.
In the case, three indictments are against the directors of Bermuda companies including Paul Lemmon, managing director of the Voyager Group with offices at 129 Front Street and Mark Valentine, the former head of now bankrupt Toronto brokerage Thomson Kernaghan and director of a number of Bermuda companies and Andrew Proctor, also a director of the Voyager Group of Companies. The men are charged with several counts of securities fraud, wire fraud and mail fraud.
The three men were arrested last week in the US and Germany.
The indictments were made by the US District Court of the Sourthern District of Florida on August, 15.
Mr. Lemmon was arrested last week in Florida and is currently being held in the Palm Beach County Jail, pending a court decision.
Mr. Proctor, was arrested in the central district of Los Angeles, but was let go on a $50,000 personal surety bond with 20 percent in cash. He is wearing an electronic monitor.
Mr. Valentine was arrested in Frankfurt and is awaiting extradition to the United States.
Indictment 15:
US against Paul D. Lemmon and Mark Valentine.
The defendants are charged, in this matter, with one count of wire, mail, and securities fraud conspiracy and two counts of securities fraud.
An indictment brief from the office of the United States Attorney, Southern District of Florida read: "Lemmon was the founder and managing director of Voyager Group Ltd., a financial services company based in Bermuda. Valentine was the chairman of Thomson Kernaghan and Company, a securities broker-dealer based in Toronto, Canada.
Valentine is alleged to have owned and controlled a majority of the stock of C-Me-Run Inc., SoftQuad Software Ltd. and Jag-Notes.com Inc; three companies the stock of which was publicly traded on the over-the-counter market.
The indictment charges that Lemmon and Valentine conspired to sell C-Me-Run Inc., SoftQuad Software Ltd. and Jag-Notes.com Inc. stock to the Fund* for a total of $29.4 million in return for their payment of a kickback of $7.8 million to the FBI UCA and others.
in addition, the indictment charges that Lemmon and Valentine were to cause securities brokers to receive undisclosed kickbacks in return for their helping to manipulate the market prices of C-Me-Run Inc., SoftQuad Software Ltd. and Jag-Notes.com Inc. stock by selling the stock to unsuspecting clients.
Indictment 16:
US against Paul D. Lemmon, Andrew K. Proctor, Michael T. Reiter and Justyn S. Feldman.
The defendants are charged, in this matter, with one count of wire, mail, and securities fraud conspiracy and one count of securities fraud.
A brief on the indictment said: "Lemmon was the founder and managing director of Voyager Group Ltd., and Proctor was a director of the Voyager Group; a financial services company based in Bermuda.
Proctor was also chairman and chief financial officer and a director of CT Cosmetics Inc, the stock of which was being registered to become publicly traded in the United States. Reiter was a stock promoter and Feldman was a licensed securities broker.
The indictment charges that Lemmon and Proctor conspired to sell CT Cosmetics Inc. stock to the Fund* for a total of $6 million in return for their payment of an undisclosed kickback payment of $3 million to the FBI UCA and others.
Reiter and Feldman were also to receive undisclosed kickbacks to help manipulate the market price of CT Cosmetics Inc. stock in connection with the kickback scheme.
Indictment number 17:
US against Paul Lemmon, Paul Derome and Andrew Proctor.
The defendants are charged, in this matter, with one count of wire, mail, and securities fraud conspiracy and one count of securities fraud.
A brief on the indictment said: "Lemmon was the founder and managing director of Voyager Group Ltd., and Proctor was a director of the Voyager Group; a financial services company based in Bermuda. Derome was the president and majority shareholder of New Anaconda Company, the stock of which was publicly traded on the over-the-counter market.
The indictment charges that the defendants conspired to sell New Anaconda Company stock to the Fund* for a total of $8 million in return for their paying an undisclosed kickback of $2 million of the sale proceeds to the FBI UCA and others.
If convicted, the men could face could face, at a maximum, statutory terms of imprisonment of five years for conspiracy to commit securities fraud, wire fraud and mail fraud respectively and 10 years for securities fraud.
*A fictitious fund set up as part of the FBI's undercover investigation.
