News Release

Released: December 13, 1999 Contact: Michael Bernard
899-6500 or
(BC only) 1-800-373-6393

Vancouver – The British Columbia Securities Commission has imposed a Cease Trade Order against four companies and four individuals who persuaded investors to put their money into offshore investments promising returns of up to 10,000 per cent a year.

The order, which prohibits any further buying and selling of securities in this scheme, has been issued against Corporate Express Inc., its affiliates Fortress International Ltd., Great American Gold Ltd. and Offshore Knowledge Network. All of the companies are purportedly registered in the Bahamas but have mailing addresses in Surrey, B.C.

The order also cited company principals John Thomas McCarthy of Surrey, Cameron Willard McEwen and Patrick Thomas Stojak, of North Vancouver, and Lynn Ilene Sorsdahl, a scholarship plan sales representative in Kelowna, B.C.

A commission hearing has been set for 9 a.m. on Dec. 21. Commission staff will ask the commission panel to adjourn the hearing to allow staff time to complete their investigation and will request an extension of the cease trade order until the hearing process is concluded.

Lang Evans, deputy director of enforcement, said the scheme came to light after an Alberta investor took some of the promotional material to a broker who was skeptical of the scheme and reported it to the Alberta Securities Commission. The Alberta commission then joined in an investigation with the B.C. commission, which had been receiving calls from investors at the same time.

Alberta investors are urged to contact Jerry Forst at the Alberta Securities Commission at (780) 422-0541.

The scheme appears to be an example of what has become known across North America as a Prime Bank Instrument scam, said Evans.

More than 400 investors in British Columbia and Alberta put up at least $350 US each, their initial "membership fee" and some went on to invest thousands of dollars more in other specialized schemes the principals offered.

"We really urge people to be skeptical of schemes such as this," said Evans.
"If someone approaches you with ‘high yield investments" or "prime bank debentures" offering unbelievable rates of return, remember the old saying: ‘If it sounds too good to be true, it probably is.’"

Under the umbrella of Corporate Express Club (CEC), these companies and the principals offered the public the opportunity to participate in what they call a credit enhancement program. The program allows CEC investors to take part in a number of investment opportunities including:

· pooled investments of initial membership funds;
· an Opportunity Investment Fund Program which pools investor funds;
· convertible debentures of Great American Gold and;
· a program that purportedly gave investors tax-free access to their RRSP.

CEC investors were given "too good to be true" promises," Evans said. "They were offering phenomenal rates of return ranging from 31% to more than 10,000% a year and told investors there was low risk to their original capital."

The principals also told the investors that the transactions would be processed through offshore tax havens to avoid the scrutiny of regulatory, police and tax authorities, another red flag that investors should note.

CEC promotional literature contained numerous misrepresentations about CEC, the various aspects of the Credit Enhancement Program, and the projected reserve and financial figures for Great American Gold, a purported mining property located near the Arizona community of Wilcox.

None of the companies or individuals are registered to trade in or act as an adviser in securities in the province. None of the companies have filed with the Commission a prospectus or offering document in order to qualify any of the securities being offered through the Credit Enhancement Program to the public.

Evans said there are a number of simple steps investors can take to check out the investment before rather than after handing over their money:

1. Demand information about the investment, including the risk and fees paid;
2. Check the B.C. Securities Commission Web site (www.bcsc.bc.ca) to see if the person is legally registered to sell the security or phone BCSC Registration staff;
3. Don’t be rushed into investing by phrases like "Once in a Lifetime Opportunity";
4. Get another perspective from your financial adviser, accountant or lawyer.

A copy of the Cease Trade Order can be obtained on the commission’s Web site (www.bcsc.bc.ca) or by contacting Communications Manager Michael Bernard. The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within the province.