A Port Alberni man and former Victoria resident was arrested this week in connection with a $200 million international securities fraud.
Colin Heatherington was arrested by RCMP in Port Alberni under a provisional arrest warrant requested by the U.S., said Thom Mrozek, spokesman for the U.S. Attorney’s Office in the Central District of California in Los Angeles, on Wednesday.
An arrest warrant for Heatherington was issued by the office in October 2013.
None of the allegations against him have been proven.
Heatherington was in court in Port Alberni on Tuesday, said Const. Jordan Hamlyn of the Port Alberni RCMP detachment.
The bail matter is expected to be dealt with at 2 p.m. in the Supreme Court of B.C., a Canadian official with the Department of Justice said.
In co-ordination with the U.S. State Department, the Washington office of the U.S. Department of Justice handles requests to other countries regarding extradition treaties, Mrozek said.
He said he does not know if a formal extradition request has been made. That would be a separate process from the provisional-arrest request.
In December 2015, a U.S. federal grand jury alleged in an 86-page document that in the 2000s, Heatherington, Florian Wilhelm Jurgen Homm and others “perpetrated a multimillion-dollar fraud on investors in various hedge funds managed by defendant Homm.”
The defendants caused the hedge funds to invest in penny stocks that were traded in the U.S. and elsewhere, and manipulated the stocks to inflate or artificially prop up prices to exaggerate the funds’ profitability, the document alleges.
This allowed the defendants to “sell their own shares of the penny stocks at the inflated prices to the hedge funds,” it alleges.
As well, the inflation overstated the performance of the hedge funds, resulting in substantial performance fees and other compensation for the defendants, the document states.
“As a result of the fraud, the victim hedge funds lost more than $200 million.”
At that point, Heatherington was living in Palma de Mallorca, Spain, working in the securities industry and working with his brother Craig, it alleges.
David Baines of the Vancouver Sun wrote in 2011 that Colin Heatherington had bought a house at 3265 Beach Dr. in Oak Bay’s Uplands area in 2007 and sold it in 2009. That house was designed by architect Samuel Maclure.
From there, Heatherington rented a waterfront house on Lands End Road in North Saanich, Baines wrote. The landlord there told Baines that Heatherington had moved out in August 2010.