Full Text :
Articles that appeared in the London Free Press:

Missing scam suspect 'stressed'
Thu, July 6, 2006
But the co-accused in the TCI Club lawsuit says he doesn't know where William Rath went.
The business partner and co-defendant of an investment guru hunted by the FBI, the RCMP and hundreds of angry investors says he doesn't know where the man is. 
"I have no idea," Londoner Ross Alexander said of the whereabouts of William Rath. "I have not heard from him." 
News of the disappearance "blew me away," Alexander said. 
Rath's family members are equally surprised, he added. "They are at a loss." 
Alexander and Rath, formerly of Uniondale, northeast of London, are named in a 15-million US class-action lawsuit by members of the TCI Investment Club, an online money-making venture. 
Members of the club claim they haven't received any returns in four years or any answers to questions about their original investments. 
Rath and Alexander deny they're managers of the club and claim they're victims too. 
Rath also faces charges of fraud, money laundering and conspiracy in a satellite piracy scheme in the U.S. and was fighting his extradition. If convicted, he could be imprisoned for up to 35 years or fined up to million. 
"I know he was under a great deal of stress," Alexander told The Free Press. "His health had been failing all year." The two men were in regular contact, and three weeks ago he left a message for Rath at his St. Catharines home, Alexander said. Two days after his phone call, a family member called to say Rath was gone, Alexander said. 
"I have not heard a word from him." No one can tell him what Rath's disappearance means to their defence in the lawsuit, Alexander said. "It's very frustrating. I don't know where it sits." Alexander said he's also stressed because of the lawsuit, filed in November 2005. "It is very trying. There is no end to it." 
Those comments didn't sit well with plaintiff Nancy Swinkels, representing the hundreds of investors suing Rath and Alexander. "We are suffering every day," the London woman said. If the defendants want things to move more quickly, they should respond more quickly to the lawsuit, Swinkels said. Since April, she and other investors have been awaiting a reply to their latest affidavit. 
Meanwhile, a new message on the TCI website said plans were in place for the return of the money, but it was taking some time. "All is well," the posting concluded. 
It was written by a "Charles Gordon," also named in the lawsuit. No one has been able to track down a Charles Gordon and many investors believe it's a pseudonym used by directors of the club. 

Friday June 30, 2006: (Some of these people were also TCI Marketers)
A version of the Nigerian letter scam, a phoney investment offer that's bilked greedy people out of billions of dollars, has apparently migrated to Southwestern Ontario. 

Five Londoners -- including a former math teacher at Laurier secondary school -- and a man who used to live in London face fraud charges after OPP investigators uncovered a scheme that saw people provincewide fork over more than 100,000 to access a non-existent "secret" Canadian government bank account. 

"It's Nigerian letter-type stuff," said London-based fraud expert Ray Porter. 

The well-known e-mail scam dupes people by selling entry into a Nigerian prince's hefty bank account. 

In this case, 15 contributors from across Ontario -- many of them couples from London, Middlesex County, Norfolk County and Belleville -- handed over thousands of dollars to dip into the non-existent federal bank account, said OPP Det. Sgt. Dan Rowbotham. 

They also bought into a phoney "debt elimination program" that promised to wipe out their money woes and offered bankruptcy protection, Rowbotham said. 

Provincial government forms usually used to register liens against loans were illegally used in this scheme -- a tactic Rowbotham said is highly unusual. 

"(They were told) that they would be protected from bankruptcy, that their debt would be eliminated, and that . . . they could access money," Rowbotham said. 

"If it sounds too good to be true, it probably is." 

The OPP probe began two years ago when frustrated participants in Delhi, in Norfolk County, reported their concerns to police. 

The investigation then moved across the province, where "word of mouth" had carried the scheme, Rowbotham said, adding some of the participants knew each other. 

It's unclear how six locals facing fraud charges are connected, though one common thread came into focus yesterday. 

At least half of them work or have worked in the investment industry: Donald and Jane Coatsworth, 49 and 46 respectively, formerly worked with London's Cartier financial services and Paul Stapylton, 47, is listed online as a financial consultant. 

Those three, along with John Hondzel, 60, turned themselves into OPP in London on Wednesday. Each faces at least half a dozen counts of fraud over ,000. 

John Boyle, 51, facing similar charges, turned himself in Monday. 

Andras Toth, 36, formerly of London, is wanted on an arrest warrant. It's unclear whether he's still in London. 

Donald and Jane Coatsworth had a brush with trouble in the investment world three years ago. 

Both had their knuckles rapped in 2003 by the Ontario Securities Commission (OSC), the provincial securities watchdog, following personal problems with the Canada Customs and Revenue Agency, OSC records show. 

During an OSC hearing they requested, the Coatsworths detailed their career and defended their credentials. 

Donald said he left teaching in 1996 and started an ultimately unsuccessful career in financial planning. As of March 12, 2003, the couple had spent two years trying to "find a solution to their monetary difficulties," the records show. 

"Jane and I are not prepared to tarnish our reputations in our community by giving the wrong advice to our clients," Donald Coatsworth is quoted as telling the OSC's director. 

"Our integrity is very, very important to us." 

An official with Cartier services, now known as Dundee Wealth Management, said yesterday the Coatsworths left "about three years ago." 

None of the accused could be reached for comment yesterday. They are scheduled to appear in the Ontario Court of Justice in London on Aug. 2. 

News Headlines

ONLINE INVESTMENT CLUB SUED SOUTHWESTERN ONTARIO INVESTORS ARE SEEKING 765 MILLION US IN A LAWSUIT. Thursday, December 8, 2005 BY RANDY RICHMOND, FREE PRESS REPORTER Hundreds of disgruntled investors in Southwestern Ontario have launched a 765-million US class-action lawsuit against leaders of an Internet investment club after a three-year struggle to find their money. "Where is the money?" London lawyer David Kirwin asked yesterday when announcing the legal action. The staggering amount of money sought and the number of people behind the action may rise, Kirwin said. He said he already has about 200 people behind the lawsuit, but as many as 5,000 people may have invested in TCI Investment Club, an online organization that promised monthly returns of three to 15 per cent on minimum investments of 10,000. The statement of claim, filed Nov. 25 in the Superior Court of Justice in London, says TCI was controlled by Ross Alexander of London and William Rath of Uniondale, a community southeast of St. Marys. In a brief interview last night at his south London estate, Alexander said he wasn't prepared to talk about the company or the lawsuit. "There are obviously two sides to this story," Alexander said. "When this has some resolve, that's the best time to respond." The lawsuit is seeking an estimated 15 million US in principal invested and another 750 million US in returns allegedly promised by TCI, returns many people were counting on as retirement nest eggs. "If they come through with a credible return-of-money plan for these people, the lawsuit is at an end," Kirwin said. The lawsuit also wants TCI to deliver all its financial records to investors. Kirwin said he's assuming the money is held somewhere, but the lawsuit is seeking 300 million in damages if there's fraud involved. London-area resident Nancy Swinkels has become a reluctant standard bearer for the hundreds and perhaps thousands of people across North America looking for their money. She invested 325,000 in the club, an amount that according to TCI statements had grown to nearly 3.2 million by June 1. "I don't like the idea of having my name out there or my personal information, but somebody has to do it," Swinkels said yesterday in Kirwin's office. None of the allegations in the lawsuit have been proven in court. The lawsuit has not been certified as a class-action yet. The statement of claim also names Charles Gordon, the name of a man who sent regular e-mails and newsletters to investors. It also names John Doe to represent any other unidentified managers involved in the handling of money. The statement of claim alleges: - Starting in 1998, an organization called Arcadia Resources started soliciting investors often through individual marketers. - Later known as TCI Investment Club, the group collected money from investors across North America. - Members of the club were told TCI managers would invest the money in several high-yield investments. - Members were allowed to get their principal and the returns back at certain time periods. - The members were given access to a secure website that gave regular updates on how their investments were doing. - Investors in Canada put in an estimated 10 million US. Investors in the U.S. put in an estimated 5 million US. Since February 2002, neither Swinkels nor other investors have received any money they requested, the statement of claim says. Nor have they been able to determine the status of their investments. The London Free Press © Copyright 2005, Sun Media Corporation 

BY RANDY RICHMOND, FREE PRESS REPORTER Like many other TCI Investment Club members, Nancy Swinkels trusted a friend. In October 2000, a friend told her how well he had done with the club and set up a meeting with a TCI marketer. Swinkels was shown a statement detailing two years of monthly earnings. "Combined with the word and trust of my friend, that led me to believe it was a viable investment," Swinkels said yesterday at the office of her London lawyer, David Kirwin. Swinkels joined TCI in January 2001, investing 325,000. A year later, she requested and received 100,000 back from her principal. But after that, she could not get any money back, she claims in a lawsuit filed Nov. 25 in the Superior Court of Justice in London. Swinkels said she spoke to her marketer two or three times a day and was told everything was fine. Meanwhile, Internet updates she received from TCI showed a growing investment. As of June this year, she was supposed to have an account worth nearly 3.2 million. When she tried speaking to a manager of the club, he seemed unavailable, Swinkels said. It was hard finding other club members. The club threatened to kick out members who talked about it or printed material from its website. "Rules on the site prohibited us with speaking to other members about TCI," she said. Fed up, she and five others set up the website www.tcirevealed.com in March. By May 11, it had received hits from 4,000 computer users. Swinkels has saved 500 e-mails from people in Canada and the United States. Their stories are heartbreaking, she said. Many were looking to TCI for their retirement nest egg. One retiree gets up at 4 a.m. each day to work for minimum wage as a security guard to survive, with all his money tied up in TCI. After she starting the website, the backlash arrived, Swinkels said. Many of TCI's marketers and members come from two London church congregations. Swinkels and her lawyer stress church pastors had nothing to do with the club. But pastors did try to persuade her to call off an investors' meeting because of the conflict it caused within congregations, Swinkels said. She and the other five went ahead with the meeting of investors Sept. 19 in London. About 200 investors decided to go ahead with a class-action suit, fronted by a reluctant Swinkels. She is uncomfortable revealing much about herself. Her own financial situation is not dire, she said. "I have become more and more determined every day," Swinkels said, "because I keep hearing from people who are so grateful that we are out there." 
HOW THE CLUB WORKED How the TCI Investment Club worked: - New members to the TCI Investment Club were drawn in largely through word of mouth. - Members called marketers would tell others about the excellent returns achieved through TCI and would receive a commission for each new member solicited. - Each member invested at least ,000 and bought an "education package" for the Internet-based TCI. - Some investors were told their money was to remain secure in various bank accounts, to be used only as guarantees for investors outside the club who were seeking large loans elsewhere. Those investors would pay for the use of the secured funds to get loans. - Promised rates of return for members ranged from three to 15 per cent a month. - Each member received a code that allowed them access to a secure website. - Once a month, their online account would be updated to show their interest accrued. They could withdraw that interest once a month. - Once a year, a member could withdraw some of the principal, which would be paid within two weeks of the request. - Club rules allowed for members to withdraw their principal plus accrued interest. - Club rules forbade members from discussing club affairs with each other and with non-members. Club rules also forbade printing information from the site. - All communication with the club was through the Internet site and e-mail. 

Friday, December 9, 2005 BY RANDY RICHMOND, FREE PRESS REPORTER A London-area man, targeted by hundreds of disgruntled investors in a 765-million US lawsuit, is wanted in the United States on charges of fraud, money laundering and conspiracy. William Charles Rath of Uniondale, northeast of London, could face up to 35 years in prison and million in fines if convicted south of the border on charges laid in 2002 of selling illegal satellite access cards that allowed people to watch DirecTV without paying subscription fees. "We are seeking his extradition," U.S. Assistant Attorney Jim Lesousky confirmed yesterday from Louisville, Ky. Rath was also named this week in a class-action lawsuit filed on behalf of hundreds of members of TCI Investment Club. The statement of claim was filed in the Superior Court of Justice in London. The statement of claim says club members want to find the 15 million US they invested and the 750 US million promised in returns. No one has been able to withdraw their money since February 2002, the claim says. The statement of claim contains allegations not yet tested in court. Rath is named as a controlling manager of the investment club in the claim. "For sale" and "No trespassing" signs greeted visitors to Rath's country estate near Uniondale, south of St. Marys, yesterday. One sign gave Rath's number to call if interested in buying the 12-hectare property and large, chalet-style two-storey house. Outside the house, a man who identified himself as a caretaker said he wasn't sure when Rath would return. "That's a great question," he said. "I am just stoking the fires." Rath was detained in Canada on the U.S. charges and posted 100,000 bail. He's been fighting his extradition on the U.S. charges since July 2002. Three U.S. men were also charged in the case. Two struck deals with prosecutors to testify against the others and pleaded guilty, Lesousky said. "They have agreed to co-operate," he said. The trial of the fourth, another American, is on hold until Rath appears in the U.S., Lesousky added. According to a Kentucky grand jury indictment, the four men are accused of trafficking in illegal satellite access cards between March 1996 and February 1999. It's alledged that many of the cards were ordered from Rath and sent to Kentucky. The money-laundering charges relate to allegations that Rath created a holding company, Cottonwood Ltd., in the Turks and Caicos Islands in 1996. From March 1996 to January 1997, more than 870,000 US flowed through the Cottonwood bank accounts to and from accounts operated by two of the other accused, the indictments say. The civil allegations in Canada are backed by about 200 claimants, their lawyer David Kirwin of London said yesterday. But operators of a website for worried club members estimate there are up to 5,000 people across North America waiting for their money. They were promised monthly returns of three to 15 per cent by investing a minimum of 10,000 into the club. The money was supposed to go into bank accounts and be used by other companies as security for large loans. Those companies would pay a premium dollar for using the money as security for loans. Also named in the lawsuit as a defendant and controlling manager of TCI Investment Club is Londoner Ross Alexander, who said little to The Free Press earlier this week. "I don't think anything should be said. It should be said before the courts." Illustration: photo by Dave Chidley, The London Free Press FOR SALE: The home of William Charles Rath, named in a multi-million dollar lawsuit, is for sale. The home is on a 12-hectare lot near Uniondale, south of St. Marys.

TCI MYSTERY DEEPENS 'WE ARE GETTING A STEADY FLOW OF PEOPLE CALLING,' A LONDON LAWYER SAYS. Saturday, December 10, 2005 BY RANDY RICHMOND, FREE PRESS REPORTER The hunt for millions of dollars in a mysterious financial investment ring is heating up, with more people coming forward with complaints and some investors accusing others of harassment. Since news broke this week of a 765-million US class-action lawsuit, another 30 people have contacted London lawyer David Kirwin's office, he said yesterday. "These are new bodies," he said. "We are getting a steady flow of people calling. Many are relieved because they have been worried about this for some time." Kirwin already represents about 200 investors seeking money put into TCI Investment Club. There are potentially thousands of investors in the same situation, according to disgruntled investors who run the www.tcirevealed.com website Yesterday, the site posted a warning from one of the leaders of the disgruntled group. "I have heard of incidents yesterday where marketers phoned and yelled threats at members," the post said. That person wasn't available for further comment yesterday. Marketers are the people who brought investors into the club. They are not named in the class-action suit. TCI manager Charles Gordon also has tried, through e-mails, to blame the investors behind the lawsuit for delaying the return of money, Kirwin said. "It is such an unfair response, because the questions listed in this lawsuit are the same questions (investors) have been asking privately for months and years. And it is only as a last resort they have turned to the courts," Kirwin said this week. Many of the new callers expressed fear they're breaking TCI rules by complaining, Kirwin said yesterday. "Members will not discuss the club dealings with anyone," states a TCI contract posted on the Internet. Any breach of the agreement means "the subscriber's position with TCI shall be immediately terminated." "I explained to them that the same rules also committed the organization to pay their money back and it has broken that rule," Kirwin said. According to a statement of claim filed in Ontario Superior Court of Justice in London, TCI Investment Club took in at least million US from investors across North America, including several hundred in Southwestern Ontario. Investors were given monthly Internet updates showing the principal had grown to an estimated 750 million. But since February 2002, no one has received any of the principal or return on their investments, according to the statement of claim. That claim contains allegations that have yet to be dealt with in court. The class-action suit seeks financial records and the return of money for any club member who requests it. The lawsuit names as defendants, TCI managers Ross Alexander of London and William Charles Rath of Uniondale. Another named manager is Charles Gordon, about whom little is known. But Kirwin isn't even sure if Gordon, using a web server in Israel, is a real person. At a September meeting with about 300 investors, Kirwin asked if anyone had ever met or talked to Gordon in person. "No one put their hand up," Kirwin said. "We have named Charles Gordon in the lawsuit, but we don't know where he is, where he lives or, quite frankly, if he is." Rath could not be reached for comment. Alexander has declined to comment on the case. 
The London Free Press © Copyright 2005, Sun Media Corporation

CLUB'S INVESTORS FROM TWO CHURCHES Monday, December 12, 2005 BY RANDY RICHMOND, FREE PRESS REPORTER As members of two London-area churches turn to the courts to recover money invested in an online company, a local religious leader says Christian churches must stamp out the spread of investment schemes that prey on their congregations. "It certainly brings a bad name to the gospel of Christ," said Ken DeVries, publisher of a St. Thomas-based Christian business directory that promotes the integrity of Christian businesspersons. "I am again saddened to hear of this latest scandal. I very much dislike the fact that Christians can seem to be so gullible and so tempted by claims of wealth." Many of the 200 local complainants behind a 765-million US class-action lawsuit revealed last week against TCI Investment Club come from two London area congregations. The names of the churches have not been disclosed. The statement of claim filed Nov. 25 at the London courthouse in the Superior Court of Justice contains allegations not yet proven in court. Investors in Canada and the United States pumped million US into TCI, but their requests for return of their money have gone unheeded since February 2002, the statement of claim says. The lawsuit was filed in late November, only weeks after Southwestern Ontario investors who poured 60 million into a fund controlled by Peterborough resident Andrew Lech learned they would get, at best, pennies to the dollar on their investments. Lech gathered many of his investors through Christian congregations. In 1995, Wayne Sheldon Leard was sentenced to 10 years in prison for defrauding more than 100 investors of 19.5 million in a pyramid-style scheme. Leard promised investors returns of up to 30 per cent in a scheme involving buying bankrupt stock, such as clothing, and re-selling it overseas. Leard was associated with the Free Methodist Church in London. He proclaimed himself a born-again Christian, passed out miniature Bibles and called himself pastor even though he wasn't ordained. In e-mails and in a phone interview, DeVries tried to explain how Christians seem to be easily targeted by investment rings. Members of a congregation often trust, to the point of gullibility, their fellow members, he said. "My concern is that there are so many Christians who are always willing to accept financial information just because their friend says it is good." Pastors can play a negative role, too, DeVries said. Demanding money from churchgoers and equating wealth with success creates an atmosphere in some churches that feeds investment frenzy, he said. "There are too many preachers who focus on wealth," DeVries said. Con artists also rely on Christians' willingness to forgive, said pastor Jay Jayaraman, of the Word of His Power Faith Fellowship on Oxford Street. "They exploit the teachings of forgiveness. 
But they forget what you reap is what you sow," Jayaraman said. One of the men named in the TCI lawsuit, Uniondale resident William Charles Rath, attended Jayaraman's church, but left about two years ago, Jayaraman said. The first he heard of TCI was through the news, he said. No one in his congregation has complained to him about it, Jayaraman said. © Copyright 2005, The London Free Press 

. TARGETS DENY BLAME OVER INVESTOR LAWSUIT Thursday, January 19, 2006 BY RANDY RICHMOND, FREE PRESS REPORTER Two London-area men named in a 765-million lawsuit by hundreds of disgruntled investors claim they're still owed money themselves and had no control over others' finances. Meanwhile, more investors are signing up in a battle that had origins in church but appears headed for an ending in court. "My intention is to take this to trial and vindicate the good name of these two individuals," lawyer Brian Shiller said yesterday. Shiller represents London resident Ross Alexander and Uniondale resident William Rath. "They had no more, even less success . . . than many other investors," says a statement of defence filed this week by Shiller. "As with other investors, there are still significant amounts of money owed (them)," says the statement of defence. The class-action suit filed in November in the Superior Court of Justice in London says Alexander and Rath controlled the TCI Investment Club, which owes millions of dollars to investors. The two men introduced some people to TCI Investment Club, but did not advise anyone to put money in, counters the statement of defence. Shiller would not say how much each man is owed by TCI, but said Alexander invested 30,000 and Rath invested 20,000 into a company called Arcadia Resources. According to the statement of claim, Arcadia Resources later became known as TCI. The damages claimed by investors in the lawsuit are "excessive," the statement of defence claims. And neither men is the mysterious Charles Gordon, a TCI manager, the statement says. No one has been able to find Gordon, who sent e-mails to investors, or determine if he exists. The statement of defence takes aim at a website set up by unhappy investors to advise others and collect names for the class-action suit. "One purpose for the design of the website was to falsely convince investors in TCI to believe that they have been defrauded by these defendants." Asked if that hinted at legal action of his own against the investors, Shiller declined to comment. This week, the website said new claimants are joining the class-action suit each day. Their London lawyer, David Kirwin, confirmed people are continuing to register and a clerk has been assigned just to handle "the large group of people." Both the statements of claim and of defence contain allegations not yet proven in court. The statement of defence dismayed, but did not surprise one investor. "It is clear that the same thing is going to continue, they will continue to deny," said the investor, who asked to remain anonymous. More than 200 people had signed on to a class-action lawsuit against Rath, Alexander and others in November, although a group representative estimated as many as 5,000 people from across North America has lost money. Many of the 200 local complainants came from two London area church congregations. According to the statement of claim, the TCI Investment Club was an online organization that promised returns of three to 15 per cent on minimum investments of 10,000. But since February 2002, the investors have received no money requested, the statement of claim says. Investors are seeking 15 million US in principal and another 750 million US in returns promised in e-mails and online reports.