Wednesday, July 25, 2012
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by Martin van den Hemel Staff Reporter A prominent Richmond software developer found guilty of fraud over $5,000 late last month in B.C. Supreme Court, was ordered Friday to pay a $100,000 fine for helping businesses evade taxes. InfoSpec Systems Inc., which currently goes by the name Profitek, located at 2688 Shell Rd., near Bridgeport Road, was convicted in connection with the sale of electronic sales suppression software, otherwise known as the zapper, which is designed to work with point-of-sale systems and electronic cash registers to erase sales records. The guilty finding against InfoSpec brings to two the number of convictions in connection with the company. In December of 2010, InfoSpec salesperson David Au was convicted of one count of fraud over $5,000 and was sentenced to
two years and six months in jail. According to the B.C. Supreme Court, Au continued to sell the software even when he knew Canada Revenue Agency was conducting an investigation. “It is particularly aggravating that Mr. Au continued to sell the zapper to customers after he became aware of the CRA investigation of InfoSpec and attempted to assist his customers to evade detection during the CRA’s audits. As a consequence, Mr. Au’s actions are highly blameworthy and attract a sentence that both denounces his misconduct and acts as a general and specific deterrent for him and like-minded others,” B.C. Supreme Court Justice Catherine J. Bruce said. Details of Au’s case were previously banned from publication by the court. The court found that Pius Chan, president of InfoSpec, was the “directing mind of the corporation”
and that he “intended to defraud the public by providing or distributing a zapper program that allowed customers to suppress income and thereby evade tax. Infospec sells computers and software to restaurants and retail outlets. In December of 2010, Vancouver restaurateur Woei Kwong Teo received a conditional sentence of 20 months house arrest and fined $142,934 for tax evasion. Others charged with evading taxes at four sushi restaurants in Vancouver and North Vancouver were: Bo Ping He, Yun Mei He and Yi Ming Jiang of Sushi Man Japanese Restaurants, Qian Jing Zeng of Kitsilano Sushi Japanese Restaurant and Woei Kwong Teo of Honjin Sushi Japanese Restaurant and Honjin Sushi Japanese Restaurant. Infospec was founded in 1985 by home-based software developer Cindy Chan.
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Trading halted after local firm’s value soars 20 times
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B.C. Securities Commission investigating unusual trading activity involving Forum National Investments Ltd.
For breaking news www.richmondreview.com
by Martin van den Hemel Staff Reporter A Richmond-based firm is under investigation by the B.C. Securities Commission after its value (market capitalization) suddenly went from $6 million to $120 million. The commission has issued a temporary order and notice of hearing against Forum National Investments Ltd. and president Daniel Clozza, chief financial officer Martin Tutschek and shareholder Grant Curtis. A halt trade order was initially issued on June 28, and that was followed up by a temporary order and a notice of hearing, the commission said Friday in a press release. The temporary order bars all trading and transferring of the shares of Forum National Investments Ltd., which trades on the Over-the-Counter bulletin board market in the U.S. In the notice of hearing, securities commission staff express their concern with the “unusual trading
volume and price increase for shares of Forum National that took place between May and June of 2012. Staff is also concerned with apparent attempts to violate or circumvent the halt trade order by transferring or issuing shares of Forum National,” the commission said in the press release. During the sudden increase in trading volume and price, Forum National was the subject of an Internet promotional campaign funded by undisclosed individuals, and the company issued seven news releases related to the expansion of its “viatical settlement business.” The allegations against the company have not been proven. The commission is the independent provincial government agency responsible for regulating trading in securities within B.C. On April 11, Forum National’s share price was US $0.15 and the trading volume was 110,000, and the firm’s market capitalization was about US $6.3 million on 42.4 million shares outstanding. On July 18, the firm’s shares closed at US $2.80, on 43.1 million outstanding shares, giving it a market capitalization of US $120 million. During the internet promotion, some internet stock promotion websites stated that more than $650,000 had been spent to promote Forum National, though who funded the campaign wasn’t disclosed. The internet promotion predicted a significant increase in share price, projecting a target of US $10 per
“Staff is also concerned with apparent attempts to violate or circumvent the halt trade order by transferring or issuing shares of Forum National.” share. During the relevant period, accounts in the names of individuals associated with Clozza engaged in significant trades, including Clozza’s 74-year-old mother, who bought 98,600 shares and sold 314,600 shares for gross profits of $121,679. Curtis’ account received a transfer of one million shares, he bought an additional 54,275 shares and sold 735,625 shares for gross profits of $738,041. After the June 28 halt trade order, Clozza and Tutschek attended Forum National’s transfer agent in Vancouver on July 5, 2012, and allegedly carried with them certificates representing about 2.7 million shares of Forum National, with some of the certificates in the names of Curtis and Tutschek. The notice of hearing alleges that Clozza instructed a transfer agent to “overnight” transfer the share certificates into the name of a Bahamian company by way of a U.S. brokerage firm. This transfer agent informed the commission. A hearing has been scheduled for Tuesday, July 31 in Vancouver.
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Richmond Community Foundation announces a scholarship in memory of Michael Diston, offered on behalf of the 2002 Graduating Class of London Secondary School eligibility criteria will be available on the RCF website www.richmondfoundation.org for the 2012 - 2013 school year. Michael Diston June 17,1984 - December 26, 2009 Michael was born in Richmond and attended London High School and graduated in 2002. He received his university degree from UBC in 2006 majoring in Japanese, and upon graduation moved to Tokyo and had a career as a translator and teacher until he died from suicide. Michael loved learning and Michael also loved helping others. Because of his many friends from London High School, and from Richmond in general, and their support to us we felt the idea of a Scholarship Fund on behalf of his graduating class at London was one way to honour our son’s memory and thank all his friends for their support over these past years. Bill and Sandra Diston
Visit us at richmondfoundation.org