Securities swindler Gregg Mulholland has been sentenced to 12 years in prison after pleading guilty in May 2016 to money laundering conspiracy charges in New York.
Mulholland has languished in Brooklyn’s Metropolitan Detention Center since his arrest in June 2015, when Federal Bureau of Investigation (FBI) agents converged on his private jet while it was on a stopover in Phoenix, Arizona.
Mulholland and his alleged co-conspirators were accused of perpetrating pump-and-dump schemes on dozens of publicly traded penny stocks, eventually netting $300 million in illicit profits funnelled through a network of offshore shell companies in Belize and Panama.
Mulholland and his co-accused, Robert Bandfield, were sentenced February 6 in U.S. district court in Brooklyn. Bandfield was sentenced to six years in prison for his part in the scheme, which enabled corrupt clients to “evade reporting requirements to the IRS [Internal Revenue Service]by concealing the proceeds generated by the manipulated stock transactions through the shell companies and their nominees,” according to a release from the United States Department of Justice office in Brooklyn.
By the time Mulholland was caught in an undercover sting that had begun in 2012, the dual U.S.-Canadian citizen was no stranger to dodging regulators.
In July 2015, the U.S. Securities and Exchange Commission (SEC) sued Mulholland and Vision Crest Consulting Group Ltd., claiming a nearly $5 million West Vancouver mansion had been bought with the ill-gotten gains from an earlier pump-and-dump scheme. The lawsuit was later amended to include a property in Whistler, at which point Mulholland’s wife, Delia Mulholland, laid claim to Vision Crest and the properties. But the BC Supreme Court on July 26 denied her bid to keep the proceeds if the properties sold. Despite her claiming “hardship and inconvenience” over the SEC’s lawsuit, Justice Gordon Funt denied Delia Mulholland’s claim, finding it “particularly troubling” that she failed to disclose her ownership in two properties in California.
Justice Funt’s ruling, however, didn’t consider the SEC’s latest evidence submitted in the case, which includes a lengthy transcript of an interview conducted by Alberta Securities Commission (ASC) investigators with David Schindler. Schindler, a Calgary businessman, paints himself as a patsy used by Gregg Mulholland to set up 14 shell companies, including being listed as Vision Crest’s “attorney” at a fake West Vancouver address.
“I’m the guy under the bus,” Schindler told ASC investigators Alessandro Tocco and Myles MacPherson in November 2015. (Tocco is no longer with the ASC, and MacPherson declined to comment for this story.)
Schindler, who also declined to comment when reached by Business in Vancouver, told investigators how he set up the firms through Canada’s federal registry, which doesn’t require public listing of corporate share structures – only names of directors. Mulholland, Schindler told investigators, had claimed that the U.S. wasn’t a “favourable” place to incorporate, and that he needed someone to deal with the incorporations for entities that would deal with specialized Standard Industrial Classification codes, assigned by the U.S. government help identify and classify businesses. Later in the interview, Schindler said he set up the companies in his name because Mulholland wanted to keep a low profile, especially in California, where “gold diggers” would search out rich men to date.
Schindler detailed how he struck up a friendship with Mulholland, keeping in contact with him and hoping to one day cash in on his involvement with what he thought were legitimate endeavours.
Throughout the interview, Schindler denied any knowledge of how certain payments were moved through the many companies. He expressed frustration with his U.S. counterpart, a Utah lawyer named Terry Turner, who eventually gave evidence against Mulholland as a confidential witness for U.S. investigators.
After Gregg Mulholland’s arrest, Delia Mulholland told Schindler not to talk to police or go to the United States, Schindler said.
In addition, Schindler told the ASC investigators that Delia Mulholland’s lawyer, Robert Millar with Fasken Martineau DuMoulin, had phoned him and asked him to step down as a Vision Crest director and nominate Delia as a company director in a last-ditch effort to facilitate her keeping the Mathers Avenue mansion in West Vancouver. Millar declined to comment when reached by BIV.