The West Vancouver wife of a convicted securities fraudster recently lost her court battle to keep the long arm of the SEC away from more than $6 million in cash and property.
The U.S. Securities and Exchange Commission took Gregg Mulholland to court over a 2008 pump-and-dump scheme, eventually winning a judgment that was ratcheted up to the equivalent of C$3,685,123, including interest.
Under a plea deal, Mulholland forfeited his interest in a $4.85-million Mathers Avenue home, as well as an undeveloped property at Whistler, which was sold earlier this year for a net profit of $1,246,295.
However, those properties weren’t his to forfeit, according to Delia Mulholland, Gregg’s wife.
The West Vancouver house was bought through Vision Crest, a company in which Delia is the only shareholder, she argued. She also contended she was entitled to money from the sale of the Whistler property, which she needed to provide for her family and to pay legal fees.
“Since my husband has been incarcerated, I have been without the funds other than meagre savings that I had. I do not have a job and caring for my daughters occupies my time fully,” she stated in her affidavit.
Convinced Delia was “experiencing hardship and inconvenience,” Justice Gordon Funt put the money from the sale in trust earlier this year.
Shortly afterward, it came to light Delia was the owner of two properties in California.
While her attorney contended they were small rental properties, Funt nonetheless found the news “particularly troubling.”
There is no longer evidence Delia Mulholland is facing hardship, according to Funt, who wrote that he only had her “bald statements … without the grounds for those statements provided.”
Ultimately, the judge inclined to the SEC’s argument that Delia’s ownership claims were concocted to “delay, hinder and defraud.”
Gregg Mulholland “is and was” the true owner of both properties, according to the SEC.
Funt ruled there was nothing in Gregg Mulholland’s 2016 financial statement to buttress Delia’s claims the West Vancouver home was bought for her “sole benefit.”
Gregg Mulholland pled guilty last May in a New York criminal court to conspiracy to fraudulently manipulate share price of publicly traded companies and launder more than US$250 million through five offshore law firms.
Under his plea agreement, he consented to forfeit “right, title and interest” in the West Vancouver house and the Whistler land.
Funt dismissed the application for the money to be released.
