Langbar International

Space Cadet Pearson strikes again - what an unbelievable thick wanker....

"Pearson was met in Sao Paulo by Arad who, in turn, introduced Pearson to an official in the lobby of the main Banco do Brasil office building. The official did not speak English so Arad served as translator. Pearson was told the meeting had to take place in the foyer because there had been a bomb scare in the main offices earlier that morning. The next day, in a separate office building, Pearson was handed a letter from someone purporting to be a Banco do Brasil representative. The letter confirmed that the bank was holding two certificates of deposit on behalf of Langbar and a subsidiary.

It was only later that Pearson would learn that the details for these instruments differed from those included in Langbar's audited accounts. For example, the letters he received in Sao Paulo showed that the certificates of deposit carried an interest rate of 7.5 per cent -- not 7.25 per cent as the official Langbar accounts showed for one of the instruments.

Meantime, Pearson proclaimed in a press release that Langbar's Banco do Brasil assets, representing $660 million U.S. ($800 million Cdn.) were real and had been confirmed. He also followed up on the suggestion by the Banco do Brasil official to move one of the certificates of cash to ABN AMRO in the Netherlands -- with which Banco do Brasil had reciprocal banking arrangements. On Aug. 31, according to the affidavit, Pearson received an e-mail from Arad telling him Banco do Brasil had agreed to transfer the certificate.

Pearson's world was about to come apart. It happened after he asked Langbar's brokers to verify that the certificate from the Brazilian bank had entered the European clearing system.

On Oct. 11, 2005, a security official with ABN AMRO -- the Dutch bank that was to have accepted the Banco do Brasil deposit -- said his bank did not actually have a Langbar account. Nor did ABN AMRO issue paper certificates of deposit. Shocked by this news, Pearson called a board meeting the following day. The directors agreed Pearson should ask the AiM exchange to suspend trading in Langbar shares.

On Oct. 13, Langbar hired Kroll Associates UK Ltd. to investigate the company's assets. A week later, Paul Spencer Lloyd, the financial crime officer for ABN AMRO in London sent Kroll an e-mail saying the Banco do Brasil certificate was "a fantasy document." More recently, Langbar hired Jones Day LLP to conduct a wide-ranging probe of the company's finances and attempt to recover assets on behalf of shareholders. Jones Day discovered that the numbering on the certificates of deposit did not conform to common international standards.

On Nov. 4, there followed more bad news. Paul Sawyer, head of compliance for Banco do Brasil in London informed Kroll that Langbar's other main asset -- the certificate related to Lambert's original purchase of shares -- was also dodgy. "The transactions these certificates allegedly represent do not currently exist and have at no time existed in the books of Banco do Brasil," Sawyer wrote. Britain's anti-fraud authorities announced Nov. 29 they had begun their criminal probe for fraud."