A painfully slow extradition process and a comfortable house-arrest provision have enabled financial fugitive Rakesh Saxena to wreak havoc on securities investors from his Vancouver-area home.

A just-released forensic report filed in B.C. Supreme Court says Saxena — who is wanted by Thai authorities for allegedly embezzling $88 million from Bangkok Bank of Commerce — helped orchestrate an international stock sales scheme that cost overseas investors millions of dollars.

Investors, most of whom are located in Britain, were directed to send their money “in trust” to a Vancouver law firm, Martin & Associates. The forensic report says $18.4 million of investors’ money was funnelled into the law firm and disbursed, mainly on Saxena’s instructions, including $500,000 to his mother and $1.6 million to the law firm.
Investors, meanwhile, have filed dozens of affidavits claiming they did not get their shares or, if they did, the certificates are essentially worthless.

Saxena, 53, has been holed up in Canada since July 1996, when he was arrested in Whistler, B.C., at the behest of Thai authorities who want him extradited to answer for his alleged crimes in their country. He hired a high-profile lawyer and raised every possible objection, including a claim that, if he is returned to Thailand, he will be extra-judicially killed as a scapegoat for the bank’s failure.

In November 2003, the Canadian government finally ordered his extradition, but Saxena appealed to the B.C. Court of Appeal. The appeal is scheduled to be heard in September. Saxena has already indicated that, if he loses, he will appeal to the Supreme Court of Canada, which may drag out the case for two more years.

After his initial arrest, Saxena was freed on bail, but that bail was revoked after he allegedly attempted to obtain a phony passport and threatened a witness. In January 1998, he managed to persuade B.C. Supreme Court Judge Wally Oppal (now the province’s attorney general) to approve a novel form of house arrest:
Saxena would pay $40,000 for private security guards to keep him confined at his luxury False Creek condo. It was an arrangement that would save taxpayers money, but remove any incentive to expedite the extradition process.

Saxena was now free to pursue his business interests. One was a bauxite prospect in Sierra Leone, which he wanted to vend into a Vancouver Stock Exchange company. However, his plans were upset when Sierra Leone’s president, Ahmad Tejan Kabbah, who had granted the mineral licence, was deposed by rebel forces.

Saxena began negotiating with a South
Africa-based mercenary force, called Executive Outcomes, to get Kabbah back in power. However, plans were put on hold when word of the counter-coup leaked out.
Many Canadians expressed shock that someone who was the subject of an extradition proceeding could plot Third World coups, but Saxena coolly noted there was nothing in the terms of his house arrest that prevented him from doing so.

He also became involved in floating dubious stock issues on the loosely regulated OTC Bulletin Board in the U.S. When the stocks imploded, he left huge unsatisfied debts at local brokerage houses. At least four of the brokerage firms filed lawsuits against him, but Saxena contends that many of them were active participants in the deals and have not been anxious to press their claims.

From 2001 to 2003, Saxena helped arrange for boiler-room operators in Spain, South Africa and Belgium to sell millions of dollars of stock that hadn’t been listed on any exchange to investors in Britain and Europe.
When they didn’t get their shares, investors — who had sent their money “in trust” to Martin & Associates — filed complaints with the B.C. Law Society, which began an investigation.

In October 2003, a custodian was appointed to take over the law practice and the firm’s two principal partners, Jack Martin and Craig Iwata, were to resign. In July 2004, they formally admitted to trust account irregularities and agreed not to reapply for membership for 10 years.

Saxena is still residing in his gilded cage, now a $693,000 rented house in Richmond, B.C., and is free to pursue whatever business dealings he wishes. He says he is confident he will win his extradition fight and would like to become a citizen of Canada, which does not seem to object to its residents plotting military coups or dealing worthless stock. IE