U.S. authorities have arrested a Vancouver man in connection with an alleged US$300-million securities fraud and money-laundering scheme.
U.S. police arrested Gregg Mulholland, a 45-year-old dual citizen of Canada and the U.S., after his flight from Mexico to Canada stopped for a layover in Phoenix. He is now facing charges in connection with an alleged market manipulation involving numerous U.S. public companies and the laundering of approximately US$300 million in profits through at least five offshore law firms. He is scheduled to appear in a Phoenix court later on Wednesday.
The allegations against him have not been proven.
U.S. law enforcement claims that Mulholland was the secret owner of an offshore broker dealer, Legacy Global Markets SA, based in Panama City and Belize City, which was indicted in September 2014. According to a complaint unsealed in Brooklyn federal court, between 2010 and 2014 Mulholland controlled a group of individuals who devised three interrelated schemes to: induce U.S. investors to purchase stock in various thinly-traded U.S. companies through fraudulent stock promotions, conceal their ownership interests in the companies and manipulate the stocks’ trading; circumvent the U.S. Internal Revenue Service’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and launder the fraudulent proceeds from the stock manipulation schemes to and from the U.S. through five offshore law firms.
The complaint claims that the “Mulholland Group” laundered approximately US$300 million in fraudulent proceeds through the schemes by using shell companies in Belize and Nevis, which had nominees at the helm, to conceal its ownership in the companies and to facilitate these interrelated schemes.
“As charged in the criminal complaint, Mulholland used an elaborate offshore corporate structure built on lies and deceit to defraud U.S. investors in publicly-traded companies and profited to the tune of US$300 million,” said Kelly Currie, acting U.S. attorney for the Eastern District of New York, in a statement. “[Mulholland] concealed his leadership role in this fraudulent network, which included stock promoters, lawyers, and broker-dealers, by using aliases and sham companies and fled the U.S. when his secretly-owned brokerage firm was indicted last summer.”
The U.S. Securities and Exchange Commission (SEC) also charged Mulholland with illegally selling more than 83 million penny stock shares that he obtained secretly through at least 10 different offshore front companies.
The SEC had previously charged Mulholland with participating in a fraudulent pump-and-dump scheme. In 2013, the SEC obtained a monetary judgment against Mulholland for more than US$5.3 million in disgorgement, prejudgment interest and penalties that remains unpaid.