PETER KENNEDY
Saturday, January 4, 2003
VANCOUVER
-- Alyn Richard Waage, a former Edmonton resident and alleged mastermind
of a $60-million (U.S.) Internet investment scam, will appear in a
California court Tuesday to face charges of fraud and money laundering,
U.S. authorities said yesterday.
His scheduled court appearance comes after a Federal grand jury in
Sacramento decided there was enough evidence to proceed with the case
against Mr. Waage and his alleged accomplice, James Michael Webb of
Mountain View, Calif.
Together, they are charged with 24 counts of fraud and money
laundering in connection with the Tri-West Investment Club, which is
reputed to be one of the largest Internet investment fraud cases in U.S.
history.
If convicted, they face fines of over $120-million, prison terms of
five to more than 20 years and the forfeiture of millions of dollars
worth of real estate in Costa Rica and Mexico.
U.S. authorities say they would also have to forfeit a yacht, a
helicopter, over a dozen cars, and millions of dollars in bank accounts
in Latvia, Mexico and Costa Rica.
Mr. Waage is considered a flight risk and is being held in a
Sacramento jail, said Patty Pontello of the U.S. Attorney's office,
Eastern District of California.
The indictment comes after U.S. authorities spent 17 months trying to
get Mr. Waage and Mr. Webb extradited from Costa Rica.
According to Canadian and U.S. securities regulators, the Tri-West
group operated from 1999 until mid-2001 and allegedly netted more than
$60-million from 15,000 investors worldwide.
It is alleged to have attracted investors by offering guaranteed,
no-risk returns of as much as 120 per cent a year through trading in
so-called "prime bank" notes, which regulators say do not
exist.
Mr. Waage and associates allegedly used investor funds to make
dividend payments to some investors and to buy millions of dollars worth
of property in Mexico and Costa Rica in what investigators called a
"vast Ponzi scheme."
In September, 2001, Mr. Waage and Mr. Webb, a U.S. citizen who
allegedly designed the Tri-West Web site, were arrested in San Jose,
Costa Rica, by authorities acting on U.S. warrants.
The arrests capped a months-long effort in the United States and
Costa Rica to investigate and detain Mr. Waage, who had been arrested in
April, 2001, in Mexico after arriving in Guadalajara with an undeclared
$4.5-million in cheques and money orders. At that time, he posted bail
and moved to Costa Rica.
Mr. Waage's son, Cary Waage, was arrested in December, 2001, on his
way from Canada to Costa Rica. In April, the U.S. Department of Justice
said Cary Waage pleaded guilty to one count of mail fraud and one count
of conspiracy to commit money laundering.
As part of a plea agreement, Cary Waage agreed to co-operate with
authorities and to forfeit millions of dollars connected to Tri-West.
