The part about copper and the bank (V) - APTN NewsAPTN News

The part about copper and the bank (V)

FULL SPECIAL REPORT

By Jorge Barrera
APTN National News

John Reynolds’ name was on two folders among the hundreds of documents seized by police when they raided Michael Chamas’ house, Federal Court records show.

One folder, item 076-031, was titled “Hon John Reynolds Laurentian Bank project Letr (sic).” The other folder, item 095a-027, was titled “Reynolds John Laurentian Bank of Canada Ltr(sic).”

Court documents

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No description accompanied the two items on the list filed by the RMCP in Federal Court as part of the Revenue Canada case against Chamas.

Reynolds is a former Reform Party and Conservative MP who co-chaired Prime Minister Stephen Harper’s leadership campaign in 2004. He was also the federal Conservative campaign chair during the 2006 election.

APTN National News obtained one letter Reynolds wrote one letter to Chamas.

It was dated Nov. 23, 2006, and titled “Project to Purchase Laurentian Bank of Canada.”

“I was very happy to hear about your interest and inquiry into the acquisition of the Laurentian Bank of Canada,” the letter said. “As part of the advisory team on this project…I am pleased to provide my expertise and assistance to you…I will be pleased and privileged working with you and trusting that your group of investors shall be successful in this acquisition. I look forward to meeting with you in Montreal.”

The letter

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Reynolds never met Chamas, and in an email said he was “never formally involved in any bank purchase. My role in life is an advisor.”

Reynolds referred questions on the issue to John Crosbie, currently the lieutenant-governor of Newfoundland and Labrador.

There was a rumour that the Laurentian Bank was available for sale.

On paper, the team assembled to purchase the bank seemed formidable.

It not only included Crosbie and Reynolds, but also former Quebec justice minister Jerome Choquette and former senior CIBC official Jacques L’Abbe, according to spreadsheet attached to a “letter of agreement” signed Montreal bankruptcy lawyer and Conservative fundraiser David Bernstein, Michael Chamas, and Robert Foster, president of Capital Canada, a Toronto-based investment banking firm.

Choquette and l’Abbe did not respond to requests for comment.

The Nov. 17, 2006, agreement outlined the basics of how the project would unfold and how the fees would be divided.

Chamas also agreed to deposit $500,000 “in trust” to Crosbie for reimbursing any expenses incurred by the “advisors” involved in the project, according to the letter of agreement.

The letter of agreement

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Crosbie said the matter about the $500,000 was “purely a product” of a reporter’s “imagination.”

Crosbie said, “There is no such understanding that I ever understood or agreed to.”

According to Foster, the Laurentian Bank project was “stillborn” and amounted to nothing more than “paper shuffling” and talk.

“I doubt that the senior officers at the bank ever even knew that these people were sort of scurrying around,” said Foster. “There was a little bit of a dance and there was nothing.”

Gladys Caron, Laurentian Bank’s vice-president of communications and investor relations, said the bank received no contact from Bernstein’s group.

“We really don’t know them, we never heard of them,” said Caron.

The plan never got off the ground because Chamas never forwarded the $1.5 billion.

Four months after Capital Canada’s letter of agreement was sent around and signed, Bernstein wrote a letter to Chamas expressing frustration with the businessman.

Bernstein wrote saying he had done everything Chamas asked, including getting his common-law wife a reprieve from being kicked out of the country and laying the groundwork for a reception with the “VIPS in the financial milieu of Canada (sic).”

Bernstein wrote he had contacted former Senator Michael Fortier, who was public works minister at the time, and then-foreign affairs minister Maxime Bernier.

“I received an affirmative reply,” wrote Bernstein, in the Feb. 19, 2007 letter. “As of this date, no reception has taken place due in part to your continuing difficulties with Revenue Canada and the inability to finalize the project going forward.”

Chamas said in an interview he was holding back on the money until Bernstein managed to get his tax problems fixed.

Bernstein, apparently, got the message, and again enlisted his friend Crosbie to deal with Revenue Canada, according to a July 11, 2007 email sent to Juanita Cree, Chamas’ former assistance who now claims to have framed her former boss by planting the two guns in his house found by police during a raid on March 26, 2008.

“Mr. Crosbie requires an advance of $5,000 to cover expenses…to be produced plus a $10,000 retainer plus applicable taxes,” wrote Bernstein. “Upon receipt of the retainer, he will travel to Montreal within the next 10 days to meet and discuss all matters with MC, prior to contacting the powers that be in Ottawa.”

Crosbie said he did meet Chamas once in Montreal and held one meeting with Revenue Canada about the businessman’s tax issues.

“Mr. Chamas was only a client of mine indirectly because the late David Bernstein,” said Crosbie in an email. “If my memory is right, I can only remember meeting Chamas once in Montreal at a meeting arranged in Montreal… I remember a meeting involving Revenue Canada in Montreal but do not remember the date.”

Crosbie said the only money he remembers coming from Chamas was a $5,000 retainer provided to Crosbie’s former law firm Cox & Palmer.

Crosbie said his law firm closed Chamas’ file on May 5, 2009, and the final bill did not include any time spent by Crosbie on the case.

“They advised I had not included any time spent by myself on the file,” said Crosbie.

Crosbie, however, initially said in an interview that he never met Chamas.

“I never met this person,” said Crosbie. “So I don’t know who you are referring to, Chamus, or something like that. I never met him.”

Crosbie described his dealings with Chamas as “peripheral.”

Police, however, also found three different documents with Crosbie’s name among the hundreds of files they seized from Chamas’ house.

One of the documents was a 29-page mandate letter from Chamas to Crosbie; the other was a five page letter from Cox & Palmer written to Chamas concerning Crosbie.

The third document was a letter written by Crosbie to a Scottish businessman named Lawrence Gillick concerning Chamas.

Court records

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Crosbie says he doesn’t remember writing the letter.

“I do not remember any letter that I sent to a person named Lawrence Gillick on behalf of Chamas,” said Crosbie, in an email.

It seems Gillick was pursuing Chamas over a load of 700 kilograms of copper.

For more on Lawrence Gillick click here.

The copper, according to Chamas and a source with knowledge of the police file on the issue, had supposedly been broken down into the two isotopes that make up the metal, Cu63 and Cu65.

Copper isotopes, which usually take the form of oxide powder, can range in price from $3 to $10 a milligram, according to Mitch Ferren, of the Isotope business office with Oak Ridge National Laboratory, in Oak Ridge, Tenn. The laboratory is linked to the U.S. Department of Energy.

The separated isotopes can be used in research for things like measuring the level of copper in the human body. Cu63 can also be turned into radioactive isotope Cu64 by hitting it with a neutron, said Ferren. Cu64 can be used in cancer treatment and other medical applications, he said.

Ferren said the price is not based on a market value, but on how much it costs to make it which usually requires electromagnetic separation. He said researchers would never purchase more than a few milligrams at a time.

Chamas, and the separate source, believed the total copper isotope haul was worth over $2 billion.

Chamas gained ownership of the load which belonged to a Russian company called Rostok Invest International which was registered in the British Virgin Islands.

The copper ended up in Dubai, according to customs documents.

Dubai customs

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Gillick wanted to get the copper back.

“The recovery of the copper that has been shipped to Dubai is getting more difficult with every passing day,” wrote Gillick’s lawyer Simon Kunz, in an April 2, 2008 letter to a Swiss prosecutor. “We believe it would be expedient if you could contact the Canadian police since they have coincidentally secured documents that prove that the copper was transported…to Dubai.”

Kunz could not be reached for comment.

Chamas said the transaction was legit and he became the rightful owner of the copper, but he no longer knows where it is.

The RCMP was also interested in the copper file and it came up during the interrogation of Daniele Guarino, who was arrested during the Operation Cancun sweep.

Cpl. John Athanasiades told Guarino that the RCMP received “source information” about copper and Chamas.

Guarino said Chamas told him he had the copper and was going to use it to get “millions of dollars” from the bank to fund a business venture they were planning to ship supplies like concrete and reinforced iron from Montreal to Dubai’s booming construction industry.

“Mr. Chamas told me he had some copper and he told me he could sell it,” said Guarino, according to a video of the March 26, 2008, interrogation.

It seems investigators believed it was a valuable haul.

“So how much copper are we talking about here?” said Athanasiades.

“I have no idea…I don’t know why copper not gold… Isn’t gold more valuable than copper?” said Guarino.

“Is it?” said Athanasiades.

“Well gold’s a $1,000 a frigging ounce,” said Guarino.

“Man…I know nothing about copper,” said Athanasiades. “It’s not like gold or anything, is it?”

Based on the details of the load contained in a document from the Berlin security company that held it, there was nothing special about this type of copper, said Ferren.

The document from RI-ST Security notes it was holding 692 kilograms of the “high-purity” copper in 47 sealed wooden boxes. It describes the isotopic fraction of the copper as being 69.09 per cent Cu63 and 30.91 per cent Cu65, which is the description of natural copper, said Ferren .

Security firm document

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“It is regular copper with a high level of chemical purity, probably dollars a pound,” said Ferren.

The price of copper spiked to $8,000 per 1,000 kilograms on Oct. 27 on news of the European Union debt deal.

Ferren said it’s not uncommon for his laboratory to get calls from financial institutions asking for information about the value of so-called high purity copper and most of the time it’s just the regular type passed off as something more.

He’s also heard of insurance companies getting hit with claims that this so-called high value copper has been stolen.

“You will have some folks that will try to use it for collateral to get loans. You might have somebody that loses the material or gets it stolen trying to make an interest claim,” he said. “You have to be careful when people say they have something valuable…they’ll try to portray it as being a very high purity copper that has some high value and really it is just copper, there really is no high value application.”

For his part, Crosbie says he knew nothing about anything having to do with copper.

“I do not remember any letter that I sent to a person named Lawrence Gillick on behalf of Chamas and certainly know nothing about any copper deal between Chamas and a Russian company or any company,” said Crosbie in an email

Days before Crosbie officially took up his post as Newfoundland and Labrador’s next lieutenant-governor, he dictated a letter that was sent Chamas severing their ties.

“I have now left the practice of law with Cox& Palmer and am not now practicing as a lawyer, but have adopted non-practicing status in Newfoundland and Labrador,” said a heavily redacted copy of the Feb. 1, 2008-dated letter obtained by APTN National News.

“In this letter, I will bring you up-to-date on what my conclusions were with respect to the various problems you were having that required legal advice when you retained me in early December by way of David Bernstein to act for you on these matters.”

The letter

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jbarrera@aptn.ca

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