The Toronto branch of the RCMP’s Integrated Market Enforcement Team has charged three senior corporate executives of the former Betacom Corporation Inc. with accounting fraud.

In a statement issued today, police allege that the executives (the former president and CEO, the CFO and the COO) created an elaborate scheme of paper-trails in order to exaggerate the financial position and the performance of the company and mislead investors, creditors and auditors. Each face three counts of fraud.

The accused are in custody. These allegations have not been proven.

Specifically, police allege that the company overstated revenues in successive quarters in 2002-2003 ranging from $700,000 to $2.3 million in audited and unaudited financial statements filed on SEDAR between October 30, 2002 and July 30, 2003. Police further allege that the company created false sales of approximately $1.1 million and did not disclose a $300,000 loan nor the interest payments the company was making on the loan in their audited financial statements for the year ended February 28, 2003, also filed on SEDAR.

Betacom traded on the TSX Venture exchange. In December 2003, it declared bankruptcy.

“IMET’s mandate is to investigate allegations of corporate malfeasance at the highest corporate level and to lay charges where appropriate,” said RCMP Superintendent Craig Hannaford, Officer in Charge of the RCMP-led GTA Integrated Market Enforcement Team. “The message here is that if you run a public company and if you engage in illegal activity, you run the risk of facing significant consequences to your criminal actions, no matter what your position in the company is or was.”

The IMET investigation into Betacom began in March 2004 as a referral from the Ontario Securities Commission.