A former national vice-president of B'Nai Brith Canada . . . Bloomfield is charged with 16 criminal counts of falsifying business records and one count of conspiracy.

Local lawyer's U.S. fraud trial opens

Bloomfield mired in complex web. Alleged to have recruited diplomat to pose as owner of offshore companies in scam

BRIAN HUTCHINSON
Freelance

HARRY Bloomfield, a prominent Montreal lawyer and philanthropist, could never have imagined he would one day sit inside a grungy New York City courtroom, listening to gung-ho assistant district attorneys describe the role he allegedly played in a complex international stock fraud, involving a trio of crooked stockbrokers, a former British magistrate and a down-and-out diplomat from Liberia.

But that is precisely what the 58-year-old Queen's Counsel has been listening to this week.

A former national vice-president of B'Nai Brith Canada and former chairman of the Business Development Bank of Canada's audit committee, Bloomfield is accused of recruiting the diplomat to pose as the owner of 16 offshore companies used in a pump-and-dump stock scam that U.S. authorities broke up in 1997.

He is charged with 16 criminal counts of falsifying business records and one count of conspiracy. How did a man with his pedigree ever land in such a mess?

The answer, said his defence lawyer, is that Bloomfield was unwittingly drawn into a devious scheme, the details of which he knew absolutely nothing about.

It began in early 1993, with a phone call from a friend of his, an American businessman named Matthew Snyder. He was owed a substantial amount of deferred compensation from a former employer and he did not wish to pay taxes on it. He wanted the series of compensation payments to be kept confidential, away from prying eyes. He asked Bloomfield for advice.

According to Snyder, who testified here last week, Bloomfield came up with a solution. He would arrange for the compensation payments to be channeled through a bank in Bermuda, and then into Snyder's bank account in New York.

Bloomfield soon traveled to London, England, and met with a lawyer named Stuart Creggy, a specialist in setting up offshore companies (Creggy, who would later become a magistrate, was eventually charged with Bloomfield and is being tried alongside him in New York).

Documents produced in court show that following their meeting, Creggy formed a new company, called Bloomfield & Bloomfield Investment Management Limited (BBIM). He had it registered in Liberia, and opened a bank account in its name in Bermuda.

It was through this account that Mr. Snyder's money was to be channeled to New York.

THERE was only one hitch: the Bermuda bank required details of the company's beneficial owner. According to the documents, Bloomfield suggested that, rather than he or Snyder or Creggy signing on as beneficial owner, they nominate another friend of his, a low-level Liberian diplomat named Charles Wilson, who was then serving his country in Canada.

"This was the beginning of the process of the defendant's borrowing, then renting, and then essentially stealing Charles Wilson's identity," declared Assistant District Attorney Kenneth Chalifoux, at the start of Bloomfield's trial last week.

There is no question that Bloomfield knew Wilson well. After all, Bloomfield is Canada's honorary consul to Liberia. A decade ago, when a civil war broke out in the tiny African country, Wilson stopped receiving his diplomatic paycheque, and the wealthy Montreal lawyer came to his aid.

According to his defence lawyer, "when Liberia fell on hard times, Bloomfield was helpful to Wilson, in helping him to survive."

Once Wilson was established as BBIM's beneficial owner, regular deferred-compensation payments began to flow from Snyder's former employer, to the Bermuda bank, and then on to New York.

Documents seized during the investigation show that the transfers amounted to about $19,000 U.S. every three months, and were described on bank credit advance slips as "BBIM Consulting Fees."

While he admitted in court that this was clearly not the case, Snyder went along with the arrangement, because, he testified, it meant that the true source of the funds would be hidden.

Everything proceeded smoothly. So smoothly, in fact, that Creggy suggested to Bloomfield that they use Wilson again, for a different purpose. In a November, 1993 fax to Bloomfield, filed as evidence at their trial, Creggy wrote:

"Dear Harry, I have had a request for the diplomat to become a director of a (Liberian) company ... if he is prepared to do so, would you kindly let me know how much he requires. ..."

Bloomfield immediately faxed a message back the same day:

"Dear Stuart, Diplomat is in the constant state of penury, therefore, I believe he will do it, and for as much money as the market will bear. ..."

According to the Manhattan District Attorney's Office, Bloomfield then got Wilson to sign his name to documents which falsely stated that he was the beneficial owner of 16 separate offshore companies.

The documents were then forwarded to Creggy in London, and eventually used to help hide the identities of three corrupt New York stockbrokers using the 16 companies to illegally trade shares in other companies listed on U.S. stock exchanges.

"Using a diplomat was a stroke of genius," declared assistant district attorney Chalifoux, at the outset of the Bloomfield and Creggy trial.

"If he were located, he would be immune from subpoena power ... (and) with some good luck (Bloomfield and Creggy) would get away with their scheme. And they were lucky for a while, but their luck ran out."

An investigation by U.S. securities officials led to the arrest of the three New York brokers; in 1997 they each pleaded guilty to conspiracy charges relating to stock fraud. The trail led police to the 16 offshore companies fronted by Charles Wilson, the Liberian diplomat, and then to Creggy and Bloomfield.

The two were charged last year and posted bail after entering not guilty pleas.

Bloomfield's defence attorney, Charles Stillman, said that while his client might have had Wilson sign documents naming the diplomat as the beneficial owner of the 16 offshore companies, he had no idea they were going to be used for criminal purposes.

"Bloomfield had zero to do with the fraudsters," Stillman said in court last week.

"There is no evidence that Bloomfield was informed of the true circumstances surrounding the request that Wilson sign some documents and return them to Creggy."

Wilson is no longer a diplomat, and is therefore not shielded by immunity. He is scheduled to testify at Bloomfield's trial next week.

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