*** From [EMAIL PROTECTED] (Tomasz Iwanowski)
http://www.theglobeandmail.com/servlet/ArticleNews/PEstory/TGAM/20020921/COSIMP21/Columnists/columnists/columnistsNational_temp/1/6/14/
Lawyer in sting seeks debt relief
Man charged by FBI has posh lifestyle
By JACQUIE MCNISH AND GUY DIXON
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Friday, September 20, 2002 - Page B1
TORONTO -- A Toronto lawyer arrested on money laundering charges as part of an FBI
sting
last month is seeking to be released from his debts despite what a bankruptcy trustee
describes as a lavish lifestyle.
According to court documents filed by the trustee, Simon Rosenfeld has a law office in
Toronto's tony Yorkville neighbourhood, a sprawling home valued at $1.3-million in an
exclusive Toronto neighbourhood, personal property insured for over $500,000 and "a
lifestyle replete with housekeeper, gardener, a peak season vacation in Barbados and
private school fees" for his three children.
Despite these assets, some of which are held in the name of his wife, Louise, Mr.
Rosenfeld
has been seeking court approval since April, 2000, to be declared bankrupt and freed
from
his debts. At that time, Mr. Rosenfeld, 57, was the subject of a civil lawsuit by the
U.S.
Securities and Exchange Commission for his role in a "pump-and-dump" penny stock
scheme.
In March, 2001, Mr. Rosenfeld was ordered to pay $2.8-million (U.S.) to the SEC in
fines
and to disgorge improperly obtained profits relating to the scheme. Court documents
show
that Mr. Rosenfeld has not paid the SEC or other creditors, including his former
partner
Michael Rinaldo.
Madam Justice Alexandra Hoy of the Ontario Superior Court ruled in August that Mr.
Rosenfeld had to pay what legal experts describe as an unusually large settlement of
$250,000 (Canadian) to his creditors before receiving a bankruptcy court release from
some
of his debts.
"Mr. Rosenfeld, in my view, was not honest with his creditors, the trustee or this
court.
He was unwilling to make full disclosure of his financial affairs. He has not made any
economic sacrifices during his bankruptcy or shown any remorse. His attitude is a slap
in
the faces of his creditors. I join the trustee and his creditors in suspecting that he
has
undisclosed assets offshore," Judge Hoy said in a decision dated Aug. 14.
Two days later, Mr. Rosenfeld was one of about 55 Canadian and U.S. citizens arrested
as
part of a sweeping sting, called Bermuda Short, to expose stock market manipulation and
money laundering scams on Nasdaq's loosely regulated over-the-counter market.
Mr. Rosenfeld was arrested in Toronto by the Royal Canadian Mounted Police and charged
with
money laundering. He was later released on bail.
Reached by telephone at his Toronto office yesterday, Mr. Rosenfeld said: "I have
nothing
to say to you."
Also arrested as part of the FBI sting was former Thomson Kernaghan & Co. chairman Mark
Valentine. Mr. Valentine was arrested in Frankfurt, where he has been detained for a
month
in a local prison. He is expected to be extradited shortly to a U.S. federal court in
Florida for a bail hearing.
According to a spokeswoman for the bankruptcy trustee, Mr. Rosenfeld has not paid any
of
the required instalments on the $250,000 payment. On Aug. 21 he filed an appeal against
Judge Hoy's decision.
Mr. Rosenfeld has filed documents with the bankruptcy court showing that after
expenses, he
does not have sufficient funds to pay his debts.
A bankruptcy court trustee and the SEC, however, told the court that Mr. Rosenfeld
could
afford to pay between $5,000 and $10,000 a month to his creditors based on his
lifestyle.
Judge Hoy agreed with the creditors on the grounds that Mr. Rosenfeld was able "to
secure
funds during his bankruptcy to support a lifestyle that could not be supported by his
declared income."
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