Lawsuit of the week: SEC sues to collect on $24 million disgorgement order against West Van’s Gregg Mulholland

The U.S. Securities and Exchange Commission (SEC) is again suing fraudster Gregg Mulholland and two shell companies to collect on a $24 million disgorgement order ...

The U.S. Securities and Exchange Commission (SEC) is again suing fraudster Gregg Mulholland and two shell companies to collect on a $24 million disgorgement order handed down in New York in January.

The SEC filed a notice of civil claim in BC Supreme Court on November 15, naming Mulholland, Vision Crest Consulting Group Ltd. and 2978 High Point Drive Holdings Ltd. as defendants. The American regulator seeks recognition and enforcement of the order in B.C., claiming Mulholland hasn’t appealed the order or paid anything to satisfy it.

Mulholland was arrested in Phoenix, Arizona, in June 2015 for his role in a massive securities fraud and money laundering conspiracy by “fraudulently manipulating  the stocks of numerous U.S. publicly traded companies and then laundering approximately US$300 million in profits through at least five offshore firms,” the claim states.

On January 9, 2017, a New York federal court entered a final judgment against Mulholland in the SEC’s civil case, ordering him to disgorge $24,659,355. The commission claims that any funds collected “will be used as restitution to compensate investors injured by Mulholland’s conduct.” 

The two companies, the SEC says, are shell companies used to hold property in West Vancouver and Whistler. The Whistler property was sold last year, and the proceeds are being held by law firm Fasken Martineau DuMoulin, which represented Mulholland’s wife in earlier proceedings where she unsuccessfully disputed the SEC’s claims that the properties were bought with her husband’s ill-gotten gains.

The commission seeks declarations that both Vision Crest and High Point Holdings “have no separate legal identity from Mulholland,” and that properties and any other assets of the companies are held in trust for the SEC. In addition, it seeks to require Mulholland to pay the disgorgement order amount plus interest under the Foreign Money Claims Act.

Mulholland was sentenced to 12 years in prison in February and is currently being held in Brooklyn’s Metropolitan Detention Center.

Mulholland and the defendant companies had not responded to the SEC’s lawsuit by press time.  

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