Companies owned by a Port Moody couple who went on Dragons' Den to pitch their automated remittance business are under investigation for a sweepstakes fraud that bilked victims out of more than $1 million.
Two Port Moody companies owned by husband and wife team Francisco and Zeala Cortes have had assets seized by the Civil Forfeiture Office. The office issued a press release Friday February 3 inviting victims to come forward for repayment.
But the $101,403 that has been forfeited by CNM Communications Inc. and Easy Padala Inc. is a small fraction of the $1.2 million that Port Moody Police discovered had been wired to the CNM by victims.
One 84-year-old woman from New Jersey alone sent CNM US$92,500, according to court documents.
When Kevin O’Leary first heard a pitch on Dragons' Den in 2010 from Filipino immigrants Francisco and Zeala Cortes about an automated remittance business they had started, he said he was “falling in love with you guys very quickly.”
What he loved was their claim that remittances from Filipinos working in Canada to their homeland was worth $1.9 billion annually, and that they had developed a platform, Easy Padala, that made it a whole lot easier.
The Cortes' claimed that they had relationships with banks in the Philippines, which is key to the kind of financial transaction business that they were developing.
O’Leary quickly fell out of love with Easy Padala when the Dragons learned that deposits held in Asian banks – which was key to the business working – were held by some unnamed partner there.
When the couple agreed to drop their ask from $100,000 for 10% of their company to $25,000 for 50%, Brett Wilson was in.
In an email to Business in Vancouver, Wilson said the deal was never executed because the Corteses decided not to proceed.
According to court documents filed as part of forfeiture proceedings, Francisco and Zeala Cortes are the sole owners and directors of Easy Padala and CNM Communications, which share the same address in Port Moody. They are also directors for a company called Elan Wellness Group.
According to the Filipino news service MetroVan Independent News, CNM Communications is also behind the Vancouver edition of Filipino Star Magazine.
According to the forfeiture filings, CNM was at the centre of a sweepstakes scheme, which the court described as fraud.
In June 2016, after beginning its investigation, Port Moody Police discovered that an 84-year-old New Jersey woman was contacted by scammers telling her she had won $1.5 million in a sweepstakes.
According to the court documents, the person contacting the woman identified himself as Christopher Quinn.
To collect, she was told she would need to pay the taxes on the winnings and was told to wire the money to CNM in Port Moody. She ended up sending a total of US$92,500 to CNM in two separate installments.
When Port Moody Police were made aware of the fraud, they got a production order for CNM’s bank account and learned that a total of 25 transfers worth $1.2 million had been wired to CNM. Thirteen transfers were from American accounts and totalled US$715,060.
It appears funds were transferred between three companies owned by the Corteses – CNM, Easy Padala and Elan Wellness Group.
The sweepstakes fraud is still under investigation and no charges have been laid.
When contacted by Business in Vancouver, Zeala Cortes said, “We’re kind of like a victim” and that “there is no case with Easy Padala.”
When it was pointed out that there are court documents that cite Easy Padala as part of the forfeiture, she said she was in a meeting and would have her lawyer respond to questions.