SEC Action Against Prime Bank Scam Investment Fraud Scheme Tri-West Investment Club Offering High-Yield Instruments
09/01 - The SEC filed a securities fraud lawsuit in connection with a scam that has raised at least $30 million, possibly $53 million, from 6000 investors by offering phony "Prime Bank" investments over the Internet.
According to documents Tri-West Investment Club of Belize City, Belize and San Diego, California and Alyn Richard Waage, a Canadian citizen residing in Puerta Vallarta, Mexico, through the now-closed website, www.triwestinvest.com solicited a minimum $1,000 investment in a "bank debenture trading program" secured by "certain key International Prime Banks" and claimed to guarantee a 120% annual rate of return with no risk to investors.
Tri-West's website claimed that the "bank debenture trading program" was managed by Haarlem Universal Corporation, purportedly "one of the largest and most prestigious trading companies in the world" with a thirty year history of generating high returns for investors.
According to the Commission, however, Haarlem is not a registered investment company, and has been in existence only since the scheme began in 1999.
Tri-West lists members of its management team as Jason Kingsley, Mark Goldman and Alan Richards. Authorities believe that all are aliases used by Waage.
Mexican authorities recently arrested Waage on suspicion of money laundering for entering Mexico with a suitcase containing $4.5 million in undeclared cashiers checks made payable to Haarlem.
Tri-West halted payments to investors on May 1, following this "unfortunate event," described on their site as, "A Tri-West courier with investment checks and payroll experienced trouble en route for deposit in our Latvian payment account."
"The courier had to make an unscheduled layover and didn't know he had to declare checks in excess of $10,000 USD."
Acting on a tip from the FBI, Costa Rican authorities recently captured Californian James Michael Webb, 39, and 55-year-old Alyn Richard Waage, a Canadian, who are wanted in California on charges that they set up a fake investment site, then used slick web advertising to swindle unsuspecting internet users.
Tri-West also offered a 15 percent "referral bonus" to investors who solicited new money, which prompted the creation of satellite Web sites recruiting new investors.
Shortly after police and soldiers arrested them at their office in downtown San Jose, authorities froze various Costa Rican bank accounts worth more than $US 5 million and also seized a mansion on the outskirts of Costa Rica's capital, a yacht, ten luxury cars and a helicopter, all belonging to the suspects.
Officials expected them to be extradited to the United States to stand trial within 60 days.
Waage has been a fugitive from Canadian judicial authorities since 1998, when he jumped bail following his arrest on 30 counts of fraud related to an Edmonton mortgage scam.
Internet-fraud suspect admits guilt
By KEITH BRADFORD, EDMONTON SUN
Albertan pledges to pay victims back
An Alberta man accused of masterminding a $60-million Internet investment scam has agreed to a guilty plea in a dramatic twist to the case, say U.S. authorities.
Alyn Richard Waage has been charged with six counts of mail fraud, 10 counts of wire fraud, seven counts of money laundering and one count of conspiracy to commit money laundering.
A document filed with a California court says Waage, from the Nisku area, will plead guilty to two counts of mail and wire fraud as well as the conspiracy charge after earlier pleading not guilty to all charges.
He has also agreed to pay "full restitution" to his victims.
"It's great news.
"I'm just hoping that everyone gets their money back," said Cheryl Eburne, of Coquitlam, B.C., who said she lost about $14,000 after getting involved with the Tri-West Investment Club.
"The money is gone and, basically, I'm struggling on a disability pension right now."
U.S. authorities claim Tri-West promised members a high return on their money, bonuses for finding new members and no risk on original investments.
They also said the "Ponzi scheme" used cash from new investors to pay earlier investors. About 15,000 people worldwide lost money, it is claimed.
Cary Waage - Alyn Waage's son - pleaded guilty in April 2002 to charges of mail fraud and conspiring to commit money laundering.
Alyn Waage and his alleged partner, Web site designer James Michael Webb of California - who jointly faced 24 charges after being extradited in December 2002 from Costa Rica - originally both pleaded not guilty to all counts.
Under the terms of Alyn Waage's agreed plea, he will forfeit to U.S. authorities any rights, titles or interests in the proceeds of the alleged mail- and wire-fraud scheme.
Waage will also not try to discharge any "restitution obligations" in any bankruptcy proceedings.
U.S. authorities will recommend a reduction in his sentence to as low as 10 years if he co-operates.
His assistance could also mean authorities will recommend Cary Waage is sentenced to just three years.
05/28/04 - EDMONTON -- U.S. Justice Department officials yesterday indicted a Saskatchewan man in connection with what they allege is the largest Internet investment fraud in history.
The scam's alleged mastermind, Nisku's Alyn Richard Waage, was arrested by Mexican authorities in April 2001.
Fourteen counts have now been laid against Keith Nordick, 41, of Saskatchewan in connection with operations of the Tri-West investment Club, which officials allege was a $60-million scam.
Nordick was arrested in Los Angeles on May 13 after he was expelled from Mexico.
U.S. authorities claim Tri-West, which operated between 1999 and 2001, promised members a high return on their money, bonuses for finding new members, and no risk on original investments.
Prosecutors also said the "Ponzi scheme" used cash from new investors to pay earlier investors. About 15,000 people worldwide lost money, they claim.
Waage pleaded guilty to mail fraud, wire fraud, and conspiracy to commit money laundering in 2003, and is awaiting sentencing.
Also awaiting sentencing is James Michael Webb, 41, a California website designer with Tri-West Investment Club, who was indicted on numerous charges and pleaded guilty in 2003.
Cary Waage, Alyn Waage's son, pleaded guilty in April 2002 to charges of mail fraud and conspiring to commit money laundering.
U.S. authorities are still looking for two other people, Lynn Waage Johnston, Alyn Waage's sister and Evan Theodore Pryor Smith.
07/04 - California - In a Sacramento courtroom on Friday, a 28-year-old Canadian learned he will spend 50 months in prison for his role in an Internet-based investment scheme that bilked $58 million out of more than 15,000 investors.
Even though he's been sentenced to more than four years behind bars, things could have been much worse for Cary Waage.
Because he cooperated with authorities, Waage was given a reduced term by U.S. District Judge Edward Garcia.
The scheme operated by Waage solicited investors to put money into what was termed a "bank debenture trading program."
Online promotional materials promised a 120 percent return on investments placed with the Tri-West Investment Club.
The investment program was run as a "Ponzi scheme," using money from new investors to pay off early participants.
As the number of investors grew, Wage and his partners siphoned off money that was used to purchase property in Central America, luxury cars, a yacht and a helicopter.
Two other men involved in the scheme have already entered guilty pleas to fraud charges. One of those men is Waage's father.
A third man is in custody and awaiting trial, while authorities are still looking for Waage's sister and another suspect.