Voyageur founder Philip Jarman (centre) is a retired helicopter pilot; his daughter, Angela Jarman (right) is a former journalist with an undergraduate education degree and a certificate from a Baptist college, while Philip's Toronto-based son, Jeff Jarman (left), worked as a helicopter mechanic.
Photograph by: ., .
MONTREAL - Two offshore companies that recently won more than $72 million in a Belize court judgment against a firm controlled by a Ponzi scheme mastermind will probably never be able to collect the award, says a lawyer working to recover money for U.S. victims of a $300-million gold mining investment scam.
The two companies are controlled by the family that runs the Voyageur Foundation, a Costa Rica-based “investment club” that is being investigated by securities officials and the RCMP to determine whether criminal activity occurred in Canada.
“You can get a judgment in another country but if they don’t have assets there, what do you do with it?” asked Ivan Reich, a Florida trustee lawyer charged with securing – and eventually selling – the worldwide assets of the individuals and companies involved in running the Merendon gold mining Ponzi scheme.
“There is an old statement in the legal world which is that a judgment is worth the paper it is written on,” he added.
Voyageur claims it is unable to return $65 million invested by close to 1,000 Canadian members, mostly from Quebec and Alberta, in a clutch of offshore funds.
An unknown amount of that money was shifted into Gary Sorenson’s Merendon Mining Corp. Ltd. – the same gold mining and refinery firm at the heart of the Ponzi scam.
The Jarmans, the family that controls Voyageur, have trumpeted the May 24 Belize court ruling as a major step forward in their purported attempts to recover the missing investments.
Belize Court documents obtained by The Gazette confirm the judgment, which if enforced, would likely be paid out of the proceeds of the sale of Merendon Mining’s assets.(The actual judgment was against the Belize holding company that controls Belize-based Merendon.)
Although the ruling appears to be a victory, of sorts, it is only one of a growing list of court rulings against Sorenson and his assets, which have been frozen by U.S. and Canadian court orders.
Last November, the U.S. Securities and Exchange Commission (SEC) ordered Sorenson and his partner to pay $310 million in fines and penalties related to the Ponzi scheme.
Sorenson will face charges related to the same Ponzi scheme in an Alberta courtroom next year.
In the meantime, a Calgary judge has appointed Dallas-based Michael Quilling as a receivership lawyer for Canadian investors involved in the case. He is working in tandem with Reich to preserve the assets of Sorenson and his companies.
In light of these claims and Sorenson’s upcoming Alberta trial, Reich expects the Jarmans will have difficulty collecting the more than $72-million award.
“Why would Gary Sorenson turn money over to these people instead of anybody else?” he asked. “Why not to the Alberta Securities Commission to get him off the hook? ... Why wouldn’t he turn it over to the SEC in the U.S.?
“What leverage do they have that everybody else doesn’t seem to have that suddenly $72 million is a grand victory?”
He said the Jarmans would have trouble enforcing the ruling in the U.S. or Canada, where courts have given control of the assets there to Reich and Quilling.
He was equally skeptical of the Jarmans’ purported plan to take control of Merendon’s operations in Ecuador:
“To be quite honest with you, unless they’ve got the equivalent of the mob or the ability to bribe public officials down there, I don’t really see a whole lot going on.”
Moreover, a 2008 report by Quilling casts doubt on the actual worth of the assets in those two countries. Quilling did not respond to several requests from a reporter for an interview.
But the report, which is referred to in an April 2010 Alberta court filing, states that despite Sorenson’s claims of unexploited riches, the mining properties in Honduras and Ecuador “have no value.”
Quebec securities officials are alarmed that the Jarmans have encouraged Voyageur members to invest millions of dollars in Merendon’s unproven Ecuadorean mining venture. The Gazette reported how the foundation continued to do so – even after Sorenson’s Ponzi scheme fell apart.
Reich regrets that the Jarmans didn’t team up with him or Quilling to try to recover money from Merendon.
“It would have been much more effective,” he said.
But in the end, he feels that it will be difficult for Voyageur investors – or Ponzi scheme victims – to recover any money from Sorenson’s companies.
“I think that money is gone, to be honest with you,” he said. “I don’t know where the other assets are. I don’t have any idea. Maybe they have hidden it somewhere. It is going to take a lot of effort to find it. It is a complicated scam that used multiple jurisdictions.”
In March, Sorenson told a Calgary courtroom he had no assets and that he had transferred ownership of his companies to a relative. Reached by phone in Calgary, Sorenson’s lawyer, Kenneth Warren, declined to comment on the Belize court ruling. Repeated attempts to reach Angela Jarman by phone and email in Costa Rica were unsuccessful.
But in an online blog post this week, Jarman said the Belize court win “should put to rest the insinuations” published in a series of Gazette articles about Voyageur and its members’ missing investments.
She also sought to reassure investors about the chances of them recovering their money due to the court ruling:
“Now we have to collect enough (of Sorenson’s company’s) assets to repay members what they are owed.”
Asked about the likelihood of the Jarmans actually being able to enforce the ruling and pay back members, Autorité des marchés financiers (AMF) spokesperson Sylvain Théberge said in an email that AMF investigators are aware of the Belize court ruling – and of the Jarmans’ claims to members – “and our investigation into this affair continues.”
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