Stock offender faces new charges
Firm purports to be setting up lotteries in Kazakhstan and Guatemala
Previously sanctioned securities offender Frederick Nielsen, previously known as Fred Gilliland, has been arrested and charged with violating a 25-year ban from operating in financial markets after his alleged involvement in a company trying to set up lotteries in Kazakhstan and Guatemala.
Nielsen was arrested by West Vancouver police June 2 and released on $10,000 bail following an appearance in North Vancouver provincial court. He faces six criminal counts under the B.C. Securities Act of failing to comply with a previous order by allegedly promoting and trading in the shares of a company called International Wagering Systems Inc. and an unnamed foreign bank.
The B.C. Securities Commission in 2011 banned Nielsen from operating in financial markets for 25 years under the terms of a settlement agreement in which he admitted to running an illegal boiler room from a Surrey residence where, between March and May of 2009, at least four employees sold shares of a Kentucky-based private company to American investors.
In 2005, Nielsen, under the name Fred Gilliland, pleaded guilty in U.S. Federal Court in South Florida to wire fraud for a $10-million scam in which he promised investors 80 per cent returns for putting money into non-existent “prime bank debentures.” He served three years of a five-year jail sentence, which the Securities Commission cited as an aggravating factor in its 2011 penalty.
The new charges stem from a B.C. Securities investigation of allegations that between Dec. 30, 2013 and April 15, 2015 Nielsen, also known as Fred Nelson, violated the 2011 ban by selling shares in or promoting International Wagering Systems and a foreign bank.
BCSC spokesman Ken Gracey said the commission couldn’t offer further comment on the case because it is before the courts.
International Wagering Systems, however, is a federally registered Canadian company with a mailing address that appears to be a post-office box at a UPS Store in Calgary.
A website under the company’s name claims that IWS has a memorandum of understanding to buy a majority interest of a lottery in Kazakhstan with the intent to modernize and operate the contest online, and then “pursue additional contracts in emerging economies,” to also run lotteries under licence in exchange for a percentage of sales.
Company documents list as a director Calgary resident Mahan Mahmoudi Nasab, who is also named as IWS’s CEO on its website. Nasab did not return calls Friday.
In the meantime, Nielsen’s next court date is scheduled for July 8 in provincial court in North Vancouver.
Before changing his name in 2008, Nielsen, as Fred Gilliland, was charged by U.S. authorities in 2001 for the prime-banking fraud, which dated back to the 1990s.
However, instead of facing the charges, Gilliland fled to West Vancouver where he lived an expensive lifestyle while on bail awaiting extradition proceedings.
The Sun reported extensively on the case, which eventually saw Gilliland arrested in a highprofile takedown by U.S. Immigration and Customs Enforcement officers in Point Roberts in March of 2005.
A disgruntled investor lured Gilliland across the border with the promise of a two-for-one lunch coupon at a local restaurant, but instead tipped off American authorities to his arrival. After arresting him at gunpoint, officers took Gilliland by boat back to the mainland U.S.
In its 2011 settlement, the Securities Commission noted that Gilliland returned to B.C. and changed his last name upon his release from jail in 2008.