How the Scammers Behind Virgin Gold Mining Corporation Bit Off More Than They Could Chew (III)

By Richard Smith

In our first post in this series, we introduced a vast pyramid fraud, Virgin Gold Mining Corporation (VGMC), that ran from early 2010 to mid 2013. There were, at the very least, many thousands of duped investors in the Gulf and Asia, and reputedly, billions of dollars were scammed. In May 2013, the followup scam, “plan A”, turned into a fiasco when the intended vehicle, Asia(n) Gold Mining Asset(s) Corporation (AGMAC), a fake BVI-registered investment fund, was denounced by the BVI regulator.

In the second post in the series, we sketched the role of VG Resources and Nauer Corporate Service(s), “Plan B”. VG Resources was a supposed stock exchange vehicle, on GXG Markets, a small European exchange, for the (nonexistent) assets of VGMC. London-based Nauer Corporate Services, disguised as a “Know Your Client” service supporting the upcoming GXG listing, in fact merely compiled the name, address and contact details of any duped VGMC investors gullible or desperate enough to undertake the round trip from Asia in the hope of salvaging their long-gone VGMC investment.

In London those investors were fleeced again, on a smaller scale, by Nauer’s “compliance” fees. One could make easy guesses at other goals of the Nauer charade: to rope in any new marks who hadn’t managed to lose money in the original VGMC scam, and to provide a way for any VGMC investors who baulked at the London trip to rationalise the total loss of their investment in VGMC (“cooling the mark out”).

VG Resources announced the cancellation of its deal with VGMC in mid-June 2013, rendering the already dubious Nauer KYC exercise completely pointless. Nevertheless, for some reason, those investors just kept trooping across the globe to London, until around the end of 2013 perhaps, when Nauer’s web site vanished. From the previous post, here is my guess at why the investors kept coming:

…why are the investors still bothering with this London trip? After AGMAC (Plan A, which evaporated sometime after 27th May 2013) and VG Resources (Plan B, defunct after that 14th June 2013 GXG announcement), the remaining overseas investors, who troop in very expensively to Nauer, during the second half of 2013 or after, must now be trusting to some unannounced Plan C that will rescue their original investment in Virgin Gold Mining Corporation.

We are now in January 2014. All is quiet. My guess looks forlorn. This blogger, who by then, via the toxic name of London Capital(NZ), GXG broker to VG Resources, had half-glimpsed this burgeoning puzzle amid many other distractions from the same stable, remembers feeling like a cat keeping half an eye on a mouse hole, while wondering if it’s the right mouse hole. A couple of months drag by: patience, patience. Then, aha! It was indeed the right mouse hole, GXG Markets:

PR Newswire

London, March 6

An Asia Pacific Gold Mining Investments Ltd (GXG APGM: G4) shareholder is selling shares in the company to various individuals, who have offered to buy the APGM shares. The Directors have asked its GXG Markets Corporate Adviser (CA) to announce to the market the details of the sales when the share certificates are issued to the purchasers. It is anticipated that this will occur within the next 2 weeks and may continue over several more weeks as further certificates are processed.

The Directors of APGM have also been made aware by the Company’s CA that there has been a suggestion that APGM is in some way related to a second Company trading as Virgin Gold Mining Corporation (VGMC) or another company with a similar name.

The Directors of APGM wish to confirm and make it clear that APGM has absolutely no relationship with VGMC, has no knowledge of its activities or Shareholders, and confirm that there has never been any transactions, agreements and/or dialogue between the two companies.

The Directors are closely monitoring this spurious campaign and its impact on APGM to determine if legal action is required against those making false accusation and/or ill-founded statements.

Information about APGM is available on its website www.asiapacificgmi.com.

The Directors take responsibility for this announcement and would like to reinforce that the company does not use any form of social media in its communication.

Full confirmation of the reliability of this announcement will be provided later, but, as a taster, note that Asia Pacific Gold Mining Investments Ltd’s Corporate Adviser is none other than London Capital (NZ). The Corporate Adviser of VG Resources, touted as a vehicle that was to acquire VGMC’s assets, is also London Capital (NZ). And, as my previous post shows, the relationship is even closer than that: VG Resources is merely a front for London Capital (NZ).

So of course there’s at least one connection between APGMI and VGMC: it goes via APGMI and London Capital (NZ) and VG Resources!

The GXG press release above is evidently a tidge misleading. It now seems very likely that Asia Pacific Gold Mining Investments Ltd (which I will call APGMI from now on), incorporated in New Brunswick, Canada, is “Plan C”, and London Capital are certainly in the mix again.

There’s a reason to baulk at the conclusion for a bit longer, though. Unlike the stooge directors of VGMC in Panama and the front men of VG Resources in London, the Chairman of  Asia Pacific Gold Mining Investments Ltd, incorporated in New Brunswick, Canada, is the very visible, corroborated and genuine Michael Cunningham OBE MBE, a Canberra and then Tornado pilot. Group Captain Cunningham went via Thatcher-right-hand-man status for, (ahem), big Saudi Arabian arms deals, via a whole run of consultancies and board-level appointments  at Very Serious UK companies, to one of his current berths, director of GXG -listed mining stock Asia Pacific Gold Mining Investments.

Mr Cunningham is quite the catch for APGMI; but is he a dupe, or in on the scam? Saudi arms deals are one thing, but microcap pump and dumps are a wild excursion for a man of his calibre. There’s not much future in just asking him: ask a possible liar if he’s a liar and he will always give the same unevidenced answer that an honest man would. One is none the wiser, and might have tipped off a crook. And what will Cunningham say if, as an alternative, he’s honest, but has goofed mightily by getting entangled with this mob? We already know he’s naive enough to work with London Capital (NZ); is he also naive enough to just waltz off to London Capital (NZ) and ask them if they are a scam?

More digging is required before tackling the APGMI directors. One pointer turns up straight away: the swish, but still not quite properly copy-edited announcement of Cunningham’s appointment is followed up by an intriguing  correction to another director announcement a few weeks later:

This updated announcement is to state that Asia Pacific Gold Mining Investment Ltd (GXG:APGM:G4) (Asia Pacific GMI) has confirmed that following the resignation of Ms Cook as director, Mr Philippe Cappelle has been appointed as Director effective immediately.

Oddly, the previous announcement  didn’t mention ‘Ms Cook’ by name and that’s the only clarifying change that I can see. But then, ah, there is Philippe Cappelle. We have come across him before, in connection with Bryan Cook, here, with one less consonant in his name. So there is a male Cook in this story already, Bryan Leonard Cook, 100% owner of NZ-registered Asia Pacific Finance Corporation, which trades on GXG as London Capital (NZ), and which just happens to be APGMI’s GXG Broker. Are these two Cooks related, perchance?

So who is the very shy Ms Cook, who perhaps didn’t want her name published at all, at first, and then agreed (perhaps grudgingly) to just her surname creeping out in the revision?

A visit to the New Brunswick Companies Registry, where APGMI is incorporated, establishes that the shy Ms Cook of the GXG announcement is in fact one Julie Cecilia Cook, a UK resident, of north west London, to be slightly more precise.

And indeed, Julie and Bryan Cook do seem to be linked, in a whole variety of ways. Most tellingly, the current board of Euro Forex Services (UK) is composed of Bryan Leonard Cook and Julie Cecilia Cook. There’s more: the past directors are Christopher David Orchard and Nauer Corporate Services, stars of my previous post in this series, where gypped-but-hopeful investors In Virgin Gold flew round the plant to conduct a spurious-looking and expensive Know Your Client charade with web fly-by night Nauer.

Let’s dig even deeper: the other star of the last post in this series was VG Resources, a GXG-listed stock that, for a while, was touted as having a deal to take over VGMC’s assets. But that deal never existed (nor did the assets). It turns out that the domain name of the site vg-resources.com, which did nothing but republish VG Resources’ highly dubious press releases,  was also registered by a Julie Cook, though in south west London, this time.

And that leads us to another site, www.londoncapital.biz, registered by Bryan Cook, this time from a PO Box in Australia. In turn www.londoncapital.biz  leads to a cast of thousands, including Mike Cunningham again, and Julie Cook.

But we are still not done. Perhaps there are two Julie Cooks. A quick peer at  APGMI’s domain name registration (asiapacificgmi.com) yields the now-expected result, Julie Cook again, with a bonus email address, Julie.Cook@fuzionhr.net, and that residential address, back in north-west London.

A visit to Fuzion HR’s director listing at Opencorporates finally nails it: Julie Cook at Fuzion HR is Julie Cecilia Cook.

Bryan and Julie Cook turn out to be Australians with birth dates that differ by more than nine months: brother and sister? Whatever: we can safely say that they are well and truly linked , and that Julie Cook knows a reasonable amount about Bryan Cook’s business.

APGMI’s press release disavowing any connection between APGMI and VGMC now looks hollow indeed.

Another connection: Fuzion HR has a registered address in Reading, UK, and that location rings a faint bell in this blogger’s overstuffed head. Eventually one remembers the recently appointed offshore stooge directors of Bryan Cook’s New Zealand company, Asia Finance Corporation, trading as London Capital (NZ), which is APGMI’s GXG broker. Those stooges are Angus Hooke, a finance professor, formerly at Johns Hopkins and the IMF, who now teaches in China, and Andrew Joseph MacFarlane, of Reading, UK, about whom I know nothing.

Clearly, then, Hooke and MacFarlane have somehow been co-opted by one Cook or the other, just like Michael Cunningham.  The double occurrence of Reading, UK suggests that Andrew Joseph MacFarlane just might have something to do with Julie Cecilia Cook. Perhaps a journalist, or a policeman, will be asking him about that, one day. In the mean time, this suspicious blogger will be skipping that enquiry.

On balance one suspects that, at some point Hooke, MacFarlane, Cunningham and Capelle are all  going to be very, very annoyed and distressed about this entanglement: they appear to have been worked over almost as comprehensively as the Virgin Gold investors. In fact there is strong current evidence that Cunningham is indeed roused, and is fighting back, as befits a former military man, rather splendidly, with Capelle and others alongside him, in a high profile manner that scammers tend not to relish.

What precipitates that fightback? Let us go back to the APGMI story: another APGMI board appointment is announced at GXG in September 2014:

The Directors would also like to take this opportunity to welcome Mr David Mapley following his appointment to the APGMI Board.

Initially, Mr Mapley is very confusing. He is already a director of another London Capital (NZ) GXG stock, City Windmills, with a registration at a London address that I already know of, and don’t much like. Is City Windmills yet another scam? Their news flow looks plausible and their accountant, Hays Mackintyre, are not obvious crooks. This isn’t like VG Resources and APGMI at all. So whose side is Mapley on? Is he another mug? If so, will he slumber on?

For a steer, I would now like to draw readers’ attention to my profile at Naked Capitalism:

Richard focuses on international investment scams that enrich the unscrupulous and impoverish the credulous. He is also interested in banking, regulation and enforcement. Sometimes he notices the affinity between these two subject matters.

This is one of those times. Cast your mind back to Goldman Sachs’ notorious Timberwolf CDO, (Reuters):

…the Timberwolf deal drew considerable notoriety during last month’s hearing by the Senate Permanent Subcommittee on Investigation when lawmakers revealed that a former Goldman executive had described the transaction as “one shitty deal” in an internal Goldman email.

Former Goldman mortgage executive Thomas Montag, who now works for Bank of America, penned that “shitty deal” email on June 22, 2007. A week earlier, Basis invested in the Timberwolf deal by plunking down about $11 million in cash and financing the rest of the transaction with a margin loan from Goldman.

…hmm, just like a dump…

The Timberwolf deal, which referenced a pool of other subprime-backed CDOs, quickly soured. By the end of August, the deal had lost 80 percent of its value and the CDO was liquidated in June 2008.

In buying Timberwolf on margin, Basis agreed to let Goldman re-price the value of the securities as it saw fit. And within weeks of closing the transaction, Goldman began marking down the securities and demanding cash collateral from Basis.

…hmm, just like a blowoff. Of course, there’s an impenetrable Chinese Wall between the GS CDO salesman and the GS margin loan department, so it can’t really be a blowoff at all, can it? It’s just big banks (OK, OK, GS was then merely a soon-to-be-bank) doing what big banks have to do. Smaller banks might help reduce the apparent conflict of interest, but let’s not go there.

Timberwolf’s similarity to a scam was not lost on our Yves, who wrote Quelle Surprise, Goldman Knowingly Sold Garbage Barges, about Timberwolf.

And who battled away to bring this “shitty deal” to the regulator’s attention? Sez Reuters:

An Australian hedge fund’s former independent director has been complaining to regulators for more than two years about how Goldman Sachs Group contributed to the fund’s collapse by selling it a toxic mortgage-linked security.

Now in the wake of a recent Senate hearing on Goldman’s role in the U.S. mortgage mess, during which the security — called Timberwolf — was repeatedly singled out by lawmakers as a particularly egregious transaction, David Mapley said he’s finally getting a measure of satisfaction.

But Mapley, a former independent director for the Basis Yield Alpha Fund, said what he really wants is for Goldman to give back the $100 million the Basis Capital fund and its investors sank into the Timberwolf collateralized debt obligation.

And there is David Mapley, fighting on the side of the angels, many would say, but certainly fighting. More from Reuters:

There are signs the persistence of Mapley and others connected to the defunct Australian hedge fund may be about to pay off.

A Washington, D.C., law firm that represents the Basis fund is negotiating with Goldman over a possible settlement to the hedge fund’s $100 million claim, people familiar with the situation said.

Well, maybe: the DoJ, perhaps to Senator Carl Levin’s surprise, never followed up on Timberwolf, which nevertheless continues to dog Goldman Sachs’ steps: a civil suit, last sighted early 2014, is still grinding through the New York Supreme Court.

Speculative conclusion: David Mapley knows a pump and dump when he sees one, and will wake up about APGMI, and will then just keep hammering away.

Back at APGMI, that speculation begins to be confirmed in the most spectacular manner in a GXG press release by APGMI, at the end of 2014:

       Notice of General Meeting, and Termination of Funding Agreement

The Directors of Asia Pacific Gold Mining Investments Ltd. (the “APGMI”) under s. 84 of the Business Corporation Act, SNB 1981, do hereby give notice of a general meeting of shareholders, to be held on 11.00am. on January 26th., 2015. The location of the meeting will be at the office of G.P. Resource Mining PLC, Room 7C, House 002, Sintayehu Building, Woreda 02, Bole Sub City, Addis Ababa, Ethiopia.

Shareholders will be voting on the following resolutions :

1). To approve the audited accounts of July 30th. 2014 for the financial year 2013.

2). As a Designated Global Issuer compliant with Section 4.2 of the GXG Rulebook, as revised September 2014, the shareholders are required to approve an increase in the nominal paid-up share capital to above CAD 0.13 pershare, based on current EUR/CAD exchange rates. Therefore, the shareholders resolve to approve the reverse split of shares on a 1,000:1 basis, re-basing an issued share capital of 100 million shares, to be reduced to 100,000 shares with ordinary share capital of CAD 1.00 per share.

3). For the purposes of funding current and future commitments of the company’s resources investment in Ethiopia, the shareholders resolve to issue 1 million ordinary shares, nominal value CAD 1.00 per share, at a price of up to CAD 10.00 per share.

4). As per a requisition of London Capital Advisers, shareholder of the Company as at December 8, 2014, pursuant to s. 96(1) of the Business Corporation Act, SNB 1981, to consider, and if deemed advisable, pass, with or without variation, a resolution for the purposes of removing the directors of the Company and elect replacement directors from such person or persons as may be nominated at the meeting.

Wow, London Capital Advisers (readers can make a reasonably good guess about who they are, more specifics in our next) want to get rid of the whole board: Michael Cunningham, Philippe Capelle, John Cunningham and David Mapley!  The next part of the press release is a masterpiece of deadpan:

The Directors recommend that shareholders support the Resolutions 1, 2 and 3, and reject Resolution 4.

There’s more:

Additionally, APGMI has acknowledged the termination of a funding agreement with London Capital Group, via its Seychelles subsidiary. This funding facility of US$ 2 million, for developing the Assosa prospect in Ethiopia, was terminated before completion, by London Capital.

For further information, please refer to the company web-site at www.apgmi.co.uk

The Board of Directors

pp Asia Pacific Gold Mining Investments Ltd.

Note well: by now the unstinting, multi-year but really rather conspicuous efforts of Bryan Cook, Julie Cook and Christopher David Orchard mean that VGMC, the giant pyramid fraud at the back of all this, is beginning to develop a trail a mile wide. Whoever’s ultimately behind VGMC isn’t guaranteed to be terribly pleased about that. But they shouldn’t necessarily blame the Cooks and Orchard: there’s another London Capital player, and, arguably for good financial reasons, he doesn’t appear to give a damn about keeping attention off London Capital, or off his colleagues.

The increasingly surreal ramifications of that indiscreetness, and more, will be covered in our next blog post.