Cayman-based trader arrested in SEC fraud case

| 24/09/2020 | 106 Comments
Andrew McAlpine

(CNS): Andrew McAlpine (47), a resident of the Cayman Islands working as a trader, was arrested at a Florida airport, Friday, and has since been indicted in an illegal pump-and-dump scheme. The US Attorney’s Office in the Southern District of California said the Canadian national was part of a stock fraud ring working together to artificially inflate the prices of penny stocks, then quickly unload the shares before the prices collapsed.

McAlpine and his co-defendants did not know that while the scheme was underway, one of their partners had begun cooperating with the investigation and was collecting evidence against his co-conspirators, the court documents unsealed on Monday stated.

The scheme involved stock from two companies: the Canada-based VMS Rehab Systems, which claimed to sell “quality of life orthopedic seat cushions for the home healthcare sector”, and Argus Worldwide, a company headquartered in Cheyenne, Wyoming, which purportedly focused on “digital/internet products and services, smart consumer electronic products and health industries”.

The prosecutor on the case, US Attorney Robert Brewer, said the defendants sought to boost the stock price of the companies and then leave innocent investors with investments that they knew would almost immediately lose most or all of their value. “We will continue to investigate and prosecute this type of stock fraud,” he said.

McAlpine was arrested when he entered the United States from Grand Cayman on a private jet, which was bound for Toronto and had been organised to repatriate a group of people.


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Category: Crime

Comments (106)

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  1. Anonymous says:

    And there is the undisclosed/unreachable amount least for the Max 800s to the public…white collars all around us.

  2. Anonymous says:

    Dear CIMA: other than for perpetuating AML headline nightmares, and general obscuration purposes we can all read about, is there any legitimate reason why anyone should ever need to hire an extra superfluous “trader”, to get in the way and take a spread on transactions, from the Cayman Islands? Why is this still considered a legitimate profession, esp after the lessons of Lindsay Capital/CMGT, Caledonian Bank, Myron Gushlak, etc etc? How long will it take you to figure this out?

    • Anonymous says:

      Because the CI STOCK EX gas pitiful trade execution times and you need a skilled trader to make even a modicum of profit.

      • Anonymous says:

        Oh boy. The US Over the Counter Bulletin Board and Pink Sheets, are in the USA and have nothing to do with the Cayman Islands Stock Exchange. Pink sheets are typically by appointment only. That’s not skill, that’s collusion. The slippery US market makers in New Jersey, Miami, and Las Vegas run those markets.

  3. Donny Cherry yo says:

    Sing Andy Sing and just maybe Cayman will get a break from the rest of hoard around here scooping up every dime in our financial as well as contruction industry Time to go buddie right eh !

    • Anonymous says:

      Oct 2nd…”On July 6, 2012, Legacy Global Markets received a deposit of $4,670,000 in its Cayman Islands bank account that, on information and belief, included the proceeds derived from sales of Rarus securities and other microcap issuers. On the same day, Legacy Global Markets transferred this entire balance to the Cayman Islands bank account of an affiliated entity, Law Firm A. Immediately thereafter, Law Firm A (controlled by the Rarus Control Group) transferred $150,055 to a Cayman Islands’ bank account of another affiliated entity, Law Firm B. Law Firm B in turn transferred $150,000 to Flip Ventures. These funds represented Ciccarelli’s compensation for his efforts in the Rarus stock promotional campaign in early June 2012.”
      https://www.sec.gov/litigation/complaints/2020/comp24940.pdf

  4. Anonymous says:

    And we wonder why Cayman is always blacklisted – SMH.

    • Philip says:

      Really did you read the inditment,it clearly says he was just a resident of cayman that’s it, nothing to do with funds being shuffled though here, please in lighten us all if you know otherwise , I have read it and I can not see anywhere cayman is mentioned.

      • Anonymous says:

        Perhaps maybe sound panicked, especially if you read then perhaps spelling would have been correct.

      • Anonymous says:

        You’ve only read the civil complaint, not the criminal complaint. He was trading through a Cayman Islands brokerage that looked the other way on origin of shares delivered-in – that’s a huge AML/CIMA red flag. They are named on page 1.

    • Anonymous says:

      In the grand scheme of things this is very small potatoes.

  5. Anonymous says:

    If found guilty, throw the book at him – like 50+ years in jail. If the accusations are true he deserves to rot in jail for the rest of his life. This is not a victimless crime. People lose their entire life savings, some commit suicide, etc. just so some pompous, scum, con-artist can live a luxurious lifestyle off the backs of hard-working people that he ripped off. Cayman Marl Road published a completely delusional letter from this man’s wife who instead of having the decency to say nothing, dug a much deeper hole instead. Meandering all over, invoking God’s name at every turn, the letter qualifies for Assinine Letter of the Year. It also proves two things: Money can’t buy you class, nor brains. As someone else said, it’s easy to be generous and kind when spending other peoples’ money.

    https://caymanmarlroad.com/wife-of-alleged-fraudster-says-god-works-in-mystery-ways-and-cmr-article-has-gave-her-much-needed-community-support/

    • Anonymous says:

      If you put your life savings in a penny stock you deserve to get ripped off.

      • Anonymous says:

        Sorry to burst your bubble, but nobody deserves to be ripped off by conniving crooks. Nice morals.

    • Anonymous says:

      Webb’s sentence was postponed how many times? eleventh times?

      Just wait and see how many more times the infamous Cayman official’ trial will be pushed back and then sentence postponed while on CIG payroll.

  6. Anonymous says:

    yeah easy to look big and important and donate to charities fly around on private jets and this and that when isnt your money fronting all of this stuff

  7. Anonymous says:

    Keep your head up Andy. As a man of integrity you will weather this storm.

    • Anonymous says:

      LOL! Integrity? Really. Google him. Read Offshore Alert.
      Just because someone is personable & donates to charities, does not mean he has integrity.

    • Anonymous says:

      Lol. Are you and your family missing a few chromosomes? Man of integrity. Pluuueeeeezze.

    • Anonymous says:

      What low standards you must have.

    • Anonymous says:

      And for the persons who lost their whole life savings? Or the families of loved ones who lost their money and committed suicide? Amazing of the out pour of the claimed support for the McAlpines who lived a life of luxury on the sweat of others money. I truly hope the victims obtain some restitution.

  8. KSS says:

    Yes, this type of thing has all been going on for years and yes the regulators probably would never have caught them. But the same applies to NY, London, Delaware, Miami, Toronto, HK and the list goes on and on. In fact there’s probably more of this in the one square mile of the City than there is in all the offshore centres the world over – far easier to point fingers at us than to deal with it at home.

  9. Anonymous says:

    The financial services industry was built on this stuff. Ask anyone over 50 how and business started coming to Cayman. It wasnt tourism.

    • Anonymous says:

      That’s for sure! Cayman’s financial industry was built on laundering dirty money. Please don’t try to deny the days of private jets coming in with the suitcases packed with cash! Being transported directly from General Aviation terminal to the bank or law office. I lived and worked that era; counting those hundred dollar bills late into the night and getting good overtime too; of course, the banker/lawyer/accountant were the ones getting the real cash!

    • Anonymous says:

      This is why there are so many birds of a feather that break bread and yuck it up in Cayman with ear-splitting cackling laughter, all at the expense of of the voiceless victims 1000s of miles away.

      • Anonymous says:

        You need to say this in a more simple manner, and somewhat slower. The dimwits do not understand your great comment.

  10. Anonymous says:

    Even is it wasn’t conducted here, I am sure the money trail leads to the Cayman Islands. More than likely laundered in Real Estate. Makes you wonder why property prices soared.

  11. Anonymous says:

    Since this has become pretty much a worthless thread, let’s change the context and wonder what those who’ve been charged were up to based on comments without knowledge to the back story, –

    ‘I always thought that pump and dump was something completely different’

    ‘I have a pursonel jet. What’s the big deal?’

    ‘yes very funny…. and yes we messed up but have corrected now’

    ‘Why do people do this shit?‘

    ‘He’s 57’

    ‘Canadian again – there should be an embargo on immigrants from that country’

    ‘47 according to the court documents’

    ‘Cayman needs to learn time is up for these financial shenaningans from the 80s. Start looking at future legitimate revenue.’

    ‘Not to worry, I am sure that CIMA or the FRA would have caught up to him eventually, he had only been doing this for some 20 odd years.’

    ‘A privet jet? Was he a hedge fund trader?’

    • Anonymous says:

      LOL! Good job!

    • Anonymous says:

      Please enlighten us all with the back story. The current story, according to Offshore Alert, is that he has been ripping/scamming (take your choice) young, middle-aged, and seniors for the past 20 years. Would sure love to hear the back story. Please leave the “He’s a man of God” out, as you’d be doing a disservice to true Christians.

  12. Anonymous says:

    Nothing new. Remember Bre-X Minerals Ltd. scandal?

  13. banon says:

    How could this happen in the private sector.

    • Anonymous says:

      Poorly regulated, by….

      • Anonymous says:

        Starts with immorality and unethical behavior. Guess you can’t really rely on people to do the right thing, supervised or not.

      • Anonymous says:

        He was an independent trader. Who would regulate him here? Securities Regulated in the USA by the SEC & that is who got him.

        • Anonymous says:

          The Cayman Islands Brokerage allowed his corporate account to receive-in stock that wasn’t his, without any explanation as to how it was acquired, or on the basis of a superficial lie. They initially halted his trading during the first pump, then allowed him to wash trade in that issue months later just before the SEC halted the stock. These should be serious AML red flags for CIMA.

    • Anonymous says:

      Right, let’s adopt communism, the certainly worked well for the Soviet Union, North Korea and East Germany.

  14. Anonymous says:

    The Dept of Commerce is also at fault for rubber stamping TBLs for sole shareholder/director exempt companies used by expats to obtain work permits to conduct all kinds in unregulated activities. No legitimate business can have a sole shareholder and sole director. At least CIMA requires 2 directors. DCI and Ministry need wake up to reality.

    • Anonymous says:

      He didn’t need a TBL. Not dealing with residents or DCI.

      • Anonymous says:

        Either one needs a TBL or one needs a CIMA licensee to conduct any sort of business activity in Cayman unless you are a hotel or CUC, FLOW ets.

        So if there was no TBL then CIMA was asleep at the wheel.

        • Anonymous says:

          CIMA is always asleep at the wheel, then sometimes when they act they do more harm than good. Really a “world class” regulator.

  15. Anon says:

    Cayman needs to learn time is up for these financial shenaningans from the 80s. Start looking at future legitimate revenue.

    • Heller says:

      Wait a minute Anon wa you smoking ? Your comment is to say the least quite asinine and those agreeing with you equally asinine. Didn’t the article state the scheme involved two companies in Canada. Where does Cayman fit into what shenanigans can’t you read, the guy caught resided in Cayman, it doesn’t say where the clo-conspirators were from, also,it does not state that the scheme was initiated by Cayman or that it was in Cayman,. So tell me idjuts why should the name Cayman and financial shenanigans of the 80s be involved in your comment. Idjut.

      • Anonymous says:

        LOL. “What in heavens name brought you to Casablanca?…My health. I came for the waters…Waters? What waters? We’re in the desert!…I was misinformed.”

      • Anonymous says:

        Of course he is Caymanian/Canadian. Previously, he was a central figure in the events that brought down Caledonian Bank, and reached a private settlement to avoid headline exposure. The account he ran it through was a corporate nominee account held at XXXX. That firm obviously looked the other way on AML origin of 700,000 shares that were delivered in free from a co-conspirator, or accepted a lie at face value. Either way, that is a separate Cayman Islands AML breach, where there are yet no charges. Even after flagging the issue and halting trading in account, they allowed him to start selling it again a few months later. CIMA continues to satisfy itself with the lowest standard of plausible deniability. A real shame for those others in Cayman who actually put in the effort to comply with local and international laws. Until we get this gas/brake compliance combination right, there will be more headlines and sanctions coming, and like it or not, that is pie on all our collective faces.

        • Anonymous says:

          Corporations and their directors in other countries, not here. Passing the buck to Cayman is like blaming the teacher little Johnny failed when you didn’t send him off to school yourself.

  16. Anonymous says:

    I always thought that pump and dump was something completely different

  17. Anonymous says:

    A privet jet? Was he a hedge fund trader?

    CNS Note: yes very funny…. and yes we messed up but have corrected now

  18. Anonymous says:

    He’s 57

    CNS: 47 according to the court documents.

    • Anonymous says:

      Who cares about his age? Only people obcessed with aging. I am 92 if you google me.

      • Anonymous says:

        Agreed, I’m 142

      • Anonymous says:

        Age plays a role in jury decisions and in sentencing. Inferences are made based on the Defendant’s age, such as implied maturity level, whether they ought to have known better, or were coerced into doing something they might have been confused about. Many here that attended his lavish 50th Birthday party at Luca years ago (complete with stripper pole) will surely be wondering how the FBI can be holding multiple passports of his, and still think he’s 47.

  19. Anonymous says:

    Why do people do this shit?

  20. Anonymous says:

    Not to worry, I am sure that CIMA or the FRA would have caught up to him eventually, he had only been doing this for some 20 odd years.

    • Heller says:

      Here we go another 29 idjuts does the article say the scheme was conducted within Cayman. Such asquaresus holes like you need a whipping.

      • Anonymous says:

        Yes, the scheme was conducted from Cayman and McAlpine clearly puts himself forward as a broker and has been involved in several sketchy deals over the years. Try Google or Offshore Alert. The likely informant was another Cayman resident that was arrested last year in California for running a pump and dump scheme out of Enterprise City. Same old, same old. Cayman protects these guys but puts layer upon layer of useless KYC/AML and CIMA oversight on legitimate business so they can look all nice and shiny for the, FATF, OECD, EU, CATF and on it goes…………..

    • Anonymous says:

      Love your sarcasm! CIMA or the FRA couldn’t catch COVID no matter how hard they tried! The amount of corruption that happens on this Island is appalling! Yet, only Caymanians seem to be caught by the Cayman authorities and for petty stuff compared to what really goes on. They are usually made to be the scapegoats.

      • Anonymous says:

        You’ll be happy to learn he is Caymanian!

        • Anonymous says:

          I’m sure he only says that when it’s beneficial, like the other bunch of status holders that claim they are Caymanian but make fun of born Caymanians behind their back. You know what I’m taking about, don’t play stupid.

    • Legal eagle says:

      CIMA is a joke. The have more employee turn over than burger king. Name an actual CIMA investigation that brought criminal charges in Cayman???

      • Anonymous says:

        But CIMA’s Managing Director is one of the highest paid individuals in the Cayman Islands! For what, I wonder.

        • Anonymous says:

          She is CIMA’s biggest liability. Her and the head of Banking. A proper joke for a regulator if the world’s 5th largest Banking centre…

  21. Anonymous says:

    Canadian again – there should be an embargo on immigrants from that country

    • Anonymous says:

      No embargo, but he should be jailed for the next 30+ years.

    • Anonymous says:

      They come, have children and refuse to assimilate. I’ve seen them sitting in bars huddled together watching hockey.

      • Anonymous says:

        And they take our Caymanian women too.

      • Hubert says:

        Yes 12:27, terrible, Canadians sitting in bars being served by Canadian waitresses and bartenders. Not only do they take our Caymanian women but the jobs Caymanians don’t want.

        So damn polite too. All they want to talk about is hockey and that useless hockey team in Toronto.

    • Anonymous says:

      Agreed! Plus any that have been granted status should be looked at over the last 20 years. It’s a common theme with white collar crime and Canada. The friendly persona is what gets you every time.

      • Anonymous says:

        Yes we must have taught all the Caymanians being busted. Were there any Canadians working for the football association? If there was explains everything? How about at the sailing club? That would make sense as well!

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