The accused in a B.C. government suit to seize a Saanich house, allegedly used to launder money, deny they have any connection to a $325-million international stock fraud scheme.
In a B.C. Supreme Court action filed at the end of 2019, the B.C. Civil Forfeiture Office alleges that a house at 1819 Hillcrest Ave. is the proceeds of the stock fraud and was used to launder money.
Named as accused in the suit are Paula Adriane Psyllakis; her spouse, Brian Alexander De Wit; Paula’s sister, Penelope Elizabeth Psyllakis, also known as Poppy Psyllakis; and Amalthea Properties Ltd.
In a B.C. Supreme Court response filed Feb. 14, Paula Psyllakis, De Wit and Amalthea Properties deny all the allegations and say the property was bought as an investment. It was not used to launder money, obscure the source of funds or obscure the true beneficial owner, says their response filed by lawyer Patrick J. Sullivan, with Whitelaw Twining Law Corp.
In 2017, the house was purchased by Amalthea Properties, whose sole director was Penelope Psyllakis, Paula’s sister. The civil forfeiture suit alleges that Paula Psyllakis and Brian De Wit are the true owners of the house.
The response acknowledges that Paula Psyallkis is a beneficial owner but states that De Wit and Penelope Pysllakis have no interest in the property.
The response says that De Wit earned money as a successful securities trader in Central America and gave money to his wife Paula.
Paula Psyllakis and De Wit are accused of being involved in a money-laundering conspiracy led by Greg Mulholland, a joint Canadian-U.S. citizen, and U.S. citizen Robert Bandfield. The pair pleaded guilty in 2017. Mulholland was sentenced to 12 years in a U.S. jail and Bandfield was sentenced to six years for setting up an elaborate structure of shell companies and brokerage firms in Belize and the West Indies that enabled clients to manipulate the stocks of dozens of publicly traded U.S. companies. The so-called pump-and-dump scheme netted US$250 million.
Psyllakis and De Wit were indicted in 2015 in the U.S. for money laundering related to the pump-and-dump stock scheme.
In the indictment filed in the U.S. District Court for the Eastern District of New York, De Wit was named as president and prime broker of a company accused of being involved in the money-laundering scheme. He worked at the company’s offices in Belize and Panama.
Psyllakis managed the back office of that company, also working at offices in Belize and Panama, according to the U.S. indictment.
According to the B.C. civil forfeiture suit, criminal charges in the U.S. remain open against De Wit and Psyllakis.
No criminal charges have been laid in B.C. against De Wit or Psyllakis. Civil forfeiture proceedings in B.C. can be launched without a criminal conviction.
The threshold for conviction under civil forfeiture is lower than criminal proceedings, a balance of probabilities rather than beyond a reasonable doubt.
In their response, Psyllakis and De Wit state that the U.S. has taken no steps to proceed in the indictment against them.