‘ DISASTER SEEMS TO FOLLOW HIM’
THE COMPANY SAYS IT HAS WORLD-CHANGING TECHNOLOGY AND MAJOR BACKERS. BUT AS ALLEGATIONS OF FRAUD FLY, A MONTREAL LAWYER IS EMBROILED IN INTERNATIONAL CONTROVERSY — AGAIN
Maybe it really is a “worldchanging technology” capable of foiling terrorists. Perhaps it really is attracting attention — and potentially hundreds of millions of dollars — from African governments and Saudi royalty, as some people behind the private company claim.
Based in Memphis, Tenn., Container Scan Holdings LLC has the marketing rights to a system it says can scan large shipping containers for explosives and other dangerous substances, in seconds. A scanning device of unmatched sophistication and efficiency, it could improve security at sea and land ports — or so goes the pitch.
Maybe it’s just hype. Container Scan was founded and managed behind the scenes by a disbarred Memphis lawyer sent to federal prison for his role in an unrelated US$10-million Ponzi scheme. Among the company’s biggest investors and enthusiasts is a hair-transplant doctor from Arkansas, who claims to be tight with Saudi Arabia’s royal family “at the top.”
And until very recently — before the lawsuits and bitter accusations started flying — the company’s chief promoter and consultant was Montreal l awyer Jacques Bouchard Jr.
Notorious in Canadian l egal circles f or his relationships with Third-World despots and former prime minister Jean Chrétien, Bouchard first made headlines five years ago when the National Post revealed he had signed a contract on behalf of a Montreal lobbyist, promising to deliver “at least” a dozen Russian attack helicopters to war- torn Central African Republic.
According to insiders, that contributed to a crisis of confidence at prestigious law firm Heenan Blaikie, where Bouchard and Chrétien worked together for several years. Two years ago, Bouchard said he was given formal approval by senior partners at the firm to work on “opportunities with the Russian Federation and some African countries,” and that he simply “followed their instructions.” The 500-lawyer firm with offices across Canada dissolved in 2014 amid acrimony and financial hardship.
Chrétien moved to a new firm, while Bouchard had already joined forces with obscure and secretive Container Scan, where he served as a contracted “consultant in international development.” Sometimes — in purported contracts and in letters to investors, for example — he described himself as the company’s chief executive officer.
Whatever his title, Bouchard’s role was clear: He was to travel extensively and use his overseas contacts to bring clients and investment to the company. From late 2013 until a few weeks ago, he was paid $25,000 every month, plus expenses.
According to a complaint filed March 2, 2016, in Tennessee Chancery Court, Bouchard delivered little more than “half-measures, excuses and ephemera.”
(JACQUES BOUCHARD) FOR MANY YEARS DEVELOPED HIS RELATIONSHIPS WITH FOREIGN HEADS OF STATE AND PREVIOUSLY WORKED ALONGSIDE FORMER CANADIAN PRIME MINISTER JEAN CHRÉTIEN.
The complaint, filed by a Container Scan director and investor named Daniel Pool, also accuses Bouchard of defrauding the company and trying to “steal” its marketing rights to the container scanning system.
He “knowingly used fraudulent documents to attempt to secure business opportunities with foreign officials,” read the allegations, which have not been proven in court and which Bouchard denies.
But no one disputes this: five months ago, before the lawsuit and turmoil, Bouchard welcomed an illustrious new person to the company’s “advisory board” — former Heenan Blaikie colleague Pierre Marc Johnson.
A former Parti Québécois leader, Johnson briefly served as Quebec premier in 1985. He currently acts as chief negotiator for the government of Quebec for the Comprehensive Economic and Trade Agreement between Canada and the European Union.
“Mr. Johnson’s vast knowledge and experience will be great assets to Container Scan and we are honoured to have him on board,” Bouchard gushed in a letter sent to investors in December. Johnson does not have a financial stake in the company.
Container Scan’s advisory board includes a number of other luminaries, among them J.C. Watts, a former Canadian Football League quarterback and U.S. congressman. According to company sources, Watts considered an offer to become Container Scan’s president last year, but declined after a meeting in Memphis went badly.
Bouchard was not happy with the prospect of having to report to Watts and seeing company control shift to Watts and Pool, sources claim. They point to emails Bouchard allegedly sent to other company insiders, including its founder, Louis Hamric. “I told you that I do not want to have to answer to them,” reads an email Bouchard allegedly wrote to Hamric in November. The email was shared with company investors at a meeting held last month in Memphis.
James Lee Witt, former director of the Federal Emergency Management Agency (FEMA), is another Container Scan advisory board member. Retired U.S. army general and 2004 Democratic Party presidential nomination candidate Wesley Clark was also an adviser until he resigned from the board sometime last year. Through a spokesman in Washington, Clark would not explain why or when he resigned. Neither Clark, Witt, nor Watts agreed to be interviewed for this story.
In February, Bouchard sent another cheery note to investors, “a status report” claiming there were “signed contracts” with the governments of Vietnam and Somalia. The deals would bring tens of millions of dollars to the company, he promised. “Immediate opportunities” also existed in the Republic of Congo, the Democratic Republic of Congo, Guinea and Ghana, Bouchard wrote.
All that was needed to complete the deals and get the money flowing was delivery of Container Scan’s vaunted scanning machines, he added.
But there weren’t any machines to send clients then, and there aren’t any now. There’s just a single scanner prototype, about the size of two small cars. It’s locked inside a rural Tennessee “laboratory” along with a com- puter and a printer that spits out graphs and charts for the benefit of potential new investors who come for scanning demonstrations.
It might look impressive to some, says one insider. The prototype has apparently identified certain contraband or hazardous materials. “But,” the same source added, “I can’t tell you if it was a working machine.”
Bouchard stopped working for Container Scan several weeks ago, around the time Pool’s complaint against him and several co-defendants was filed Tennessee court. He filed a response to the complaint in late March, denying every allegation.
In a counterclaim, Bouchard alleges Pool and two others defamed him, causing him “to suffer the loss of his good name and reputation and goodwill.” He notes he has “for many years developed his relationships with foreign heads of state and previously worked alongside former Canadian prime minister Jean Chrétien.”
References to Bouchard’s relationship with Chrétien were heard frequently at company meetings, Container Scan insiders and investors recall. “Bouchard’s involvement with Chrétien was a good deal of his resumé,” says one individual who is not involved or named in any of the court filings. “At first we were elated (to have Bouchard on the payroll). We were feeling like we were going to sit back and wait for the money to roll in.”
Instead, money went out the door. Millions of dollars raised from private investors were spent attempting to attract business; by the start of 2016, the company was cash-strapped, according to insiders. People started looking more closely at their jet-setting international consultant, and at his past.
Despite Bouchard’s efforts to clean up his reputation — he hired Internet consulting companies for their online reputation-management services in 2014 and 2015, and sent the bills to Container Scan — he couldn’t erase everything. “Disaster,” says one investor, “seems to follow him.”
In 2012, a year after resigning from Heenan Blaikie, Bouchard pleaded guilty before Quebec’s law society to to seven disciplinary infractions, on matters related to his work at another Montreal-based law firm.
He then became associated with something called the World Sports Alliance ( WSA), a curious outfit that described itself as a “public-private partnership in support of United Nations Millennium Goals.” It was led by Alain Lemieux, an artificial-turf impresario from Sherbrooke, Que., who was described in WSA literature as “His Excellency Ambassador.”
The WSA had no official UN affiliation, and Lemieux was not an ambassador. But he had ambitions in Africa, and engaged Bouchard to help WSA pursue business opportunities on the continent, including diamond and nickel mining.
Before Bouchard and Lemieux’s relationship soured in 2013, they met with Container Scan to discuss a possible business arrangement. Apparently, Bouchard liked what he saw in Memphis. He walked away from the WSA and signed on with the American company.
Container Scan’s founder, Hamric, was a colourful southern gentleman who liked to surround himself with antiquities, fine furnishings and interesting people. By the time Bouchard met him, Hamric was no longer practising law; he had just spent several years in federal prison for wire fraud and money laundering for his role in a crooked investment scheme that defrauded 97 investors.
Insiders say it was widely known that Hamric “ran the show” at Container Scan. His criminal history and disbarment weren’t big secrets, either. “Memphis is a small city, and everyone knew about Louis,” says one investor. Yet because of his crimes, Hamric chose to remain in the background; he was a company director, but he did not have an executive position with the company.
Instead, he hired several young men straight out of college to serve as Container Scan’s executive officers; none had any background or technical expertise in scanning technology. Hamric was generous with his fresh-faced recruits. He bought them custom-tailored suits and gold cufflinks as welcome gifts. They were expected to present themselves as conservative businessmen.
As to why Hamric appeared to favour youth over experience inside the executive suite, one Container Scan investor told the National Post: “Young people don’t ask a lot of questions.”
Not everyone was thrilled when Bouchard came aboard in 2013. He was a rank outsider who rubbed some people the wrong way. His $25,000 monthly retainer was more than anyone else at the company was paid, and his travel expenses were “extravagant,” according to one insider.
Hamric died in January after a lengthy illness, setting off a succession battle at Container Scan.
Bouchard’s selective use of the CEO title, before and after Hamric’s death, was a source of confusion for some. It wasn’t clear to everyone why he represented himself as the company’s chief executive when he was not. A lawyer acting for Bouchard explained this week that his client “was an independent contractor. He was authorized to use the title of CEO in a limited capacity and for credibility in dealing with parties on behalf of Container Scan.”
Bouchard did not agree to an interview for this story, but he previously replied to some questions the National Post put to him via email. Asked last year if he associated or worked with Hamric, Bouchard replied, “No.”
Company insiders say that’s absurd, noting the two men were frequently photographed together. They occasionally travelled together, as well.
One of Bouchard’s curious dealings on behalf of the company involved a mysterious Saudi businessman named Dr. Abdalelah al Hammadi. According to the complaint filed against him, in 2014 Bouchard signed a “purported joint venture” with the wealthy Saudi who was to provide Container Scan with US$2 billion, which the company would use to “finance the construction of scanners.”
The catch: Container Scan was to pre-pay al Hammadi and an associate “closing costs” of US$500,000, according to court documents. Another strange proviso was that “all Travel expenses will be in Business class, 4 Star Hotels, all Meals and Hotel Services by an open voucher system,” according to a document initialled and signed by Bouchard and al Hammadi’s associate. The document is attached to the complaint, as an exhibit.
One of Container Scan’s young executives investigated the alleged two investors “and determined that they were con artists,” according to the complaint. “Although appearing on its face to be quite literally an ‘African prince’ advanced-payment scam, Mr. Bouchard signed the agreement.”
The deal was never executed. It’s not clear whether al Hammadi even exists. The National Post asked Bouchard this week if he ever met al Hammadi; he did not respond to the question, nor did his counsel. The lawyer did note that “no money was ever provided or sent to Dr. al Hammadi or anyone else. We consider these elements to have been pleaded in the Complaint as irrelevant and meant to sensationalize.”
Pool’s complaint goes on to allege that, more recently, Bouchard and two other Container Scan investors “conspired to market the (scanner) technology by and through another entity.” Bouchard has denied this, as have his co-defendants.
In an effort to clear the air and avoid further litigation, a number of the company’s 112 investors met late last month at a Memphis hotel — a meeting that was recorded on video and posted to YouTube. Bouchard did not attend. There were some arguments and shouting, and at least one investor stormed out of the meeting room, cursing.
Arkansas hair-transplant doctor Dow Stough, whom people at the meeting were told has invested more than US$300,000 in Container Scan, took the podium. He said he had personally introduced the company’s “worldchanging technology” to Saudi Arabia, and “to the king himself.”
Stough said his goal was “to move forward with the kingdom of Saudi Arabia and to sell them a scanner.” But the company “got mired in internal strife.”
Another investor could be heard shouting from the back of the meeting room. “I’ve been through two wars and ain’t seen nothin’ as screwed up as this,” he complained. “Y’all need to get y’alls heads together and work it out. Y’all sound like a bunch of third-graders.”
The meeting ending with a majority agreeing not to support Pool’s complaint filed against Bouchard and the other defendants. But the case will proceed, regardless; a court appearance is scheduled for May 3.
Back in Montreal, meanwhile, Johnson said he’s heard that Container Scan is in turmoil. He’s aware that its founder Hamric died in January, but said he didn’t know of the man’s criminal past until the National Post brought it to his attention last week.
“I’m on an advisory board of that group, I have been for some months, and yes, I’m aware there are tensions between some of the shareholders,” Johnson added.
Asked about his relationship with Jacques Bouchard, Johnson said he’d “had enough of this,” and hung up.
I’VE BEEN THROUGH TWO WARS AND AIN’T SEEN NOTHIN’ AS SCREWED UP AS THIS. Y’ALL NEED TO GET Y’ALLS HEADS TOGETHER AND WORK IT OUT. Y’ALL SOUND LIKE A BUNCH OF THIRD-GRADERS. — CONTAINER SCAN INVESTOR BOUCHARD’S INVOLVEMENT WITH CHRÉTIEN WAS A GOOD DEAL OF HIS RESUMÉ.