Stockwatch Daily

Calgary’s Winsor sentenced to time served in U.S.

Must now face Alberta judge

- By Mike Caswell

A PENNSYLVAN­IA judge has sentenced Calgary’s Caroline Winsor for her role in a criminal bribery scheme, imposing a term equal to the time she has already served. The sentence amounts to about one year in jail. In addition, the judge has ordered her to serve three years of supervised release and to pay a $10,000 fine. (All figures are in U.S. dollars.)

Prosecutor­s claimed that Ms. Winsor (who is also known as Caroline Danforth and Caroline Meyers) was part of a scheme to pay a kickback to have corrupt brokers buy shares of two pink sheets listings, Viosolar Inc. and FACT Corp. She and a Cana-

dian broker named Rick Walchuk sought to have the brokers buy millions of shares using the accounts of retail customers. Unfortunat­ely for Ms. Winsor and Mr. Walchuk, the person who was arranging the buying was secretly co-operating with the FBI.

Ms. Winsor received her sentence in an appearance on Wednesday, April 13, before Pennsylvan­ia Judge Timothy Savage. Few details of her sentencing are available, as nearly every related document is sealed. The charges against her were conspiracy, wire fraud and securities fraud. Ms. Winsor previously pleaded guilty.

The guilty plea came after she and her co-accused, Mr. Walchuk, reached secretive deals with the government in 2014 to settle the charges. Just like the sentencing materials, all of the documents surroundin­g their guilty pleas were sealed. It is possible that both agreed to provide prosecutor­s with something in return for a favourable sentence recommenda­tion, but whatever that something may have been, the details are not public.

For Ms. Winsor, the sentence does not mark the end of her difficulti­es with the justice system. Her next appearance before a judge will be in Alberta, where she awaits sentencing for a separate pump-and-dump. The Alberta Securities Commission claimed that she and another man, Joseph Bucci, fraudulent­ly boosted an OTC Bulletin Board l isting call ed Coastal Pacific Mining Corp. in 2010. Ms. Winsor previously pleaded guilty to those charges. Her sentencing in that case was delayed until she resolved the U.S. matter.

Details of the U.S. charges are contained in an indictment prosecutor­s filed on Dec. 6, 2012, in the Eastern District of Pennsylvan­ia. The indictment identified Ms. Winsor, 67, as a Canadian who had also used the names Caroline Meyer and Caroline Danforth. It identified Mr. Walchuk, 58, as a Canadian who served as the president of Viosolar. Prosecutor­s cited the pair for the manipulati­ons of Viosolar and FACT, claiming that they tried to bribe brokers to buy the companies with client accounts.

The scheme came about in July, 2008, when Ms. Winsor was introduced to a person who claimed to represent a group of corrupt brokers. The person, only identified as “CW” (for co-operating witness), said he could have the brokers buy and hold shares in any company. In return, Ms. Winsor and Mr. Walchuk would have to pay a 20-per-cent fee. Unfortunat­ely for Ms. Winsor and Mr. Walchuk, the person was secretly co-operating with gov-

ernment agents as part of a sting (one that the FBI has carried out many times).

The CW then set up a test transactio­n in which he purportedl­y had brokers buy $5,000 worth of stock. In reality, the FBI used undercover accounts to buy the shares. Ms. Winsor then wired $2,000 to pay for the test transactio­n. There were no further buys, and it appears that the CW stopped all communicat­ions with Ms. Winsor and Mr. Walchuk after the test transactio­n.

When prosecutor­s initially filed the case in 2012, Ms. Winsor and Mr. Walchuk were not in the U.S. or even in North America. Ms. Winsor had been in Spain, where she was trying to obtain Spanish identifica­tion, according to prosecutor­s. Police there arrested her on the U.S. warrant in May, 2014. She did not contest her extraditio­n, and appeared before a U.S. judge on July 2, 2014. She served about a year in jail before she pleaded guilty and was allowed to live under house arrest.

U.S. authoritie­s located Mr. Walchuk around the same time as Ms. Winsor. He had been in Greece, where he was living on the outskirts of Athens. He also appeared before a U.S. judge relatively quickly. On Nov. 10, 2015, he received a sentence of time served, which amounted to 18 months.

(VIOSF)

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