Clients who have collectively lost tens of millions of dollars in alleged “illegal investments” in offshore funds are waiting to see if a probe into Montreal-based Triglobal Capital Management Inc. will shed light on the fate of their money.

Triglobal and its company officers, including Themistoklis Papadopoulos of Laval, Que., are accused of directing clients to invest their individual nest eggs of between $10,000 and $350,000 in two funds under investigation by the Autorité des marchés financiers: Focus Management Inc., based in the Cayman Islands, and Ivest Fund Ltd., a fund manager registered in the Bahamas.

The Ivest and Focus funds were being sold without a prospectus, says AMF spokesman Frederic Alberro, making them illegal investments. In addition, Alberro adds, Triglobal was not authorized under the Securities Act to act as a dealer or advisor in securities. It is registered as a mutual fund dealer and can sell mutual funds, group savings plans, scholarship plans and provide financial planning advice.

“Triglobal could not sell this kind of product,” Alberro says, adding that the regulators do not consider Ivest or Focus to be mutual funds.

A cease-trade order against Triglobal, Ivest, Focus and other parties was issued by the Quebec regulator on Dec. 21. The AMF says a red flag was raised when an external auditor refused to sign off on Ivest’s financial statements. The auditor could not verify the legitimacy of a $20-million “loan” Ivest had reportedly made to Focus, the order states. The loan represented 40% of Ivest’s assets.

“The auditor could not trace where the money had gone,” says Jean Robillard, a bankruptcy expert, partner and vice president of the turnaround group at accounting firm Raymond Chabot Grant Thornton LLP in Montreal.

The Quebec government has appointed Robillard to administer and investigate Triglobal’s affairs until April 30, at which point he will produce a final report. An interim report is expected on Jan. 21.

Only those of Triglobal’s 28,000 clients that invested in Ivest or Focus are affected. Robillard announced the sale of the company’s assets and goodwill to Sillery, Que.-based Promutuel Capital Trust Co. Inc. on Jan. 10 for an undisclosed amount. Triglobal had about $500 million in assets under management, he says.

That means those clients who didn’t invest in Ivest and Focus are taken care of, as are 250 advi-sors who will make the switch to Promutuel. But those who sunk cash into Invest and Focus with the promise of annual returns of up to 11% have been left holding the bag. “Certain investors recently found it difficult or have been unable to recover their investments,” says the AMF in its Dec. 27 statement.

One victim, Panayiotis Stav-ropoulos, lost two-thirds of his $350,000 investment in Focus after being told the investment was as secure as a bank deposit. Although he did get an annual 9% return for two years, when he went to cash a cheque from Triglobal refunding his principal, it bounced.

“Exasperated, Stavropoulos complained to the police last November,” the cease-trade order states. After police visited Triglobal’s office, Stavropoulus got payments totalling $125,000, but is still owed more than $250,000 in principal and interest.

A second victim, Dimitra Simptikidis, invested more than $122,000 after being told she would get an 11% annual return over five years. After learning of others who had failed to recover their investments, she tried unsuccessfully to get her money back from Focus and eventually went to regulators.

The AMF is “concerned” that the attitude of Triglobal and its officers “hindered” the work of investigators. Papadopoulus, for example, has been making himself unavailable to investigators, including Robillard.

Robillard doesn’t know exactly how many people have lost money, although he estimates at least several dozen people have lost “probably in the tens of millions.

“That’s part of my challenge,” he adds. “I don’t know how much. I don’t know who all the victims are, and I’m having a tough time getting the information because I can’t locate Mr. Papadopoulos.”

In addition to Triglobal, Focus and Ivest, the cease-trade order extends to a handful of linked companies, including a numbered company, 3769682 Canada Inc. of Montreal, which has two shareholders, Papadopoulos and Mario Bright of Kirkland, Que., and is Triglobal’s sole owner, according to the AMF. The order also includes the Société de gestion de fortune Triglobal Inc. of Montreal and PNB Management Inc. of Kirkland, Que.

@page_break@Ivest is accused of making a public offering through memorandum without having issued a prospectus; nor is it registered to act as a dealer or advisor.

Some of the key officers in Triglobal include:

> Papadopoulos, Triglobal’s president and a shareholder of the numbered company that owns Triglobal. He is Triglobal’s sole administrator, according to regulatory documents, and a co-shareholder of PNB Management Inc.

> Franco Mignacca of Montreal, Triglobal’s treasurer, is alleged by regulators to have directed the scheme with Papadopoulus.

> Bright, Triglobal’s other shareholder via the numbered company, is also a co-shareholder of PNB. Bright, now said by regulators to be living in Crete, is the only company officer in the case to have been registered as an advisor.

He worked at the Norbourg Group of Cos. from 2001 to 2003, but stopped working as an advisor after his resignation. Norbourg filed for bankruptcy in 2005 after it was revealed that millions of investors’ dollars had disappeared. A total of 9,200 people were defrauded in that scam, which ended in the conviction last month of Norbourg founder Vincent Lacroix. However, Robillard is not aware of any link between Bright’s and Lacroix’s issues.

> Anna Papathanasiou of Montreal, the sole shareholder of Société de gestion de fortune Triglobal Inc., of which Papadopoulos is a listed administrator. Papathanasiou is alleged to have helped recruit at least one victim, Simptikidis, who was working at a restaurant in Boucherville, Que.

> Joseph Jekkel of Beaconsfield, Que., Triglobal’s founder in 1997, allegedly helped Focus issue its offering memorandum without a prospectus.

> Kevin Coombes of Grand Cayman. He was a vice president of the troubled Horizon Bank International Ltd., incorporated in St. Vincent and the Grenadines, with which both Ivest and Horizon had accounts, according to liquidator Marcus Wide of PricewaterhouseCoopers LLP in Halifax. Ivest has filed a claim in the liquidation.

According to La Presse, Ivest received a transfer of $1.7 million from Horizon in 2003. IE