- Posted June 11, 2014 by
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U.S. SEC wins injunction against Fugitive St.Kitts-Nevis Economic Citizen
Financial authorities in Canada and the U.S. are searching for Babkian, who has passports from four countries including St.Kitts-Nevis and who amassed a $100-million fortune in a few short years before moving to Monaco. Babikian owns significant real estate and a number of shell companies on St.Kitts-Nevis as well as other idyllic paradise like locations such as the British Virgin Islands and Malta.
The St.Kitts-Nevis Economic Citizen took extreme measures to evade the watchful eyes of investigators.
“He runs his affairs solely with specially encrypted Blackberrys that he uses for a few days or weeks before he destroys and replaces them,” court documents allege.
After destroying each smartphone and breaking it into multiple pieces that he tosses into different garbage cans “so that it is absolutely impossible … to access the information that they hold”, according to those court documents.
John Babikian also has a special portable device from HSBC Bank in Hong Kong that lets him make international wire transfers from anywhere in the world.
The 26-year-old entrepreneur left behind In Quebec, Canada a number of luxury items including a $2-million mansion north of Montreal, a 2008 Bugatti Veyron and 2010 Bentley Continental, QMI Agency has learned.
Revenue Quebec is now chasing the millionaire for back taxes.
US Tax authorities allege $11.5 million in income was hidden from the government between 2008 and 2010. Babikian reported $47,677 in income in 2008, documents say.
Quebec’s AMF financial watchdog and its American counterpart, the Securities and Exchange Commission (SEC ), also want to know how Babikian earned his keep.
U.S. District Judge Paul Crotty in Manhattan refused to disturb an asset freeze he had imposed on March 13 against the defendant John Babikian, and again ordered him to account for his assets and respond to the SEC’s allegations. Babikian was 26 at the time of the freeze.
“The evidence establishes a strong likelihood that Babikian committed securities fraud through the alleged pump and dump scheme,” Crotty wrote. “There is also a high risk that, unless enjoined, Babikian may commit the alleged fraudulent acts again, given his control of penny stock websites and his aptitude at using anonymous email accounts, alter-ego front companies, and mass email distribution systems.”
In a court filing Babikian, through his lawyers, declined to address some SEC claims, invoking his right against self-incrimination under the U.S. Constitution.
Babikian was accused by the SEC of reaping an illegal $1.9 million profit by selling nearly 1.4 million shares of coal mining company America West Resources Inc after his emailed touts had boosted their price.
The SEC said Babikian sent the touts on Feb. 23, 2012, to about 700,000 email addresses through the AwesomePennyStocks.com and PennyStocksUniverse.com websites.
As other investors bought the stock and drove up the price, he sold his holdings at an average price more than quadruple the level where it had traded previously, the SEC said.
Among the assets subject to the freeze are two Los Angeles homes, property in The Dalles, Oregon, which according to The Oregonian newspaper Babikian hoped to develop as a vineyard, and proceeds from the sale of a stake in an airplane.
The SEC has said Babikian left Canada in 2012 following tax evasion allegations.
Revenu Québec, a tax authority, has said it had won a judgment last year to recoup millions of dollars of back taxes from Babikian, and frozen assets including a home in Laval, Québec, a Bugatti Veyron, a Bentley Continental and a BMW X6.
America West is not a defendant in the SEC case and was not accused of wrongdoing.
The case is SEC v. Babikian, U.S. District Court, Southern District of New York, No. 14-01740. (Reporting by Jonathan Stempel in New York; Editing by Mohammad Zargham)
Babkian Holdings include:
• John Babikian travels in a private Gulfstream jet owned by NetJets. His account with NetJets is in the name of the shell charity “Vertical International Relief Fund”
• Hong Kong – Babikian has bank accounts
• Seychelles – Multiple shell companies (Middlebay Trade Ltd., Liner Investments Ltd., Intelligent Alliance Corp., Auorora Intour Ltd., Monolith Ventures)
• Lebanon – Babikian is a citizen
• Malta – Babikian has bank accounts
• Monaco – Babikian has two bank acocunts
• St. Kitts and Nevis – Babikian is a citizen, has shell companies, and owns real estate
• Panama – Shell companies (Montblue Commerce, Nothingham Group, Normandia Capital)
• British Virgin Islands – Shell companies (Arrow Import & Export Corporation, Antica Ventures)
• Bahamas – Nine condos (seven of which are in the name of a shell company, John Jack Ventures), bank account, company (Kenora Overseas)
• Quebec – Numbered companies (9264-5076 Quebec Inc, Bargainoo Est), charity (Tidal East Global Relief)
• United States – Two houses in California worth $8.2m, a shell company (Oriwa Villas Ltd), shares of companies, charity organization
• Belize – Bank accounts, companies (Antica Ventures Ltd., Mediasky Holdings Ltd., Beddington Marketing)
• Guatemala – Diplomatic passport, had taken steps to start a private bank, shell company (One Berger Circle)
Babkian follows Russian Millionaire Rustem Tursunbayev who was a fugitive with a St.Kitts-Nevis Passport who was on the run before Canadian authorities caught up with him last year. He was on Interpol’s Most Wanted List prior. Oluwaseun Ogunbambo is another fugitive with a St.Kitts-Nevis Passport. A warrant was issued for his arrest in a Lagos, Nigeria High Court in May where he is charged for fraud and forgery after obtaining N610 million by false pretence. Dr. Arthur Porter the St.Kitts-Nevis Honorary Counsul to the Bahamas today sits in a Panama Jail Cell fighting extradition to Canada to face charges linked to what Canadian Authorities have described as the biggest corruption kickback in the history of Canada.