Investors fear money went south -- to Panama

NORCO, CALIF. - The money trail in a suspect currency investment program promoted by several Twin Cities companies runs through an industrial building in this gritty southern California community that calls itself Horsetown USA.

Trevor Cook, a 37-year-old Minneapolis money manager at the center of a sweeping federal investigation, wired millions of dollars over the past year to a lawyer here, Gary Saunders, to buy land for a Panama casino and condominiums, according to sources familiar with the transfers.

Investors from around the nation who sunk hundreds of millions of dollars into the currency investments promoted through Oxford Global Partners out of the stately Van Dusen mansion in Minneapolis have been unable to get their money out since July. No one knows exactly what became of the money, but many fear that Cook and his associates spent a chunk of their savings on deals like the casino project.

A source familiar with the Panama City casino transaction valued it at $14 million to $18 million, though he said Cook had run about $5 million short of completing the deal as of May.

Through his attorney, Cook declined to comment.

Cook describes himself as the chief investment strategist and managing partner of Oxford Global Partners, formerly known as Oxford Global Advisors. At various times the firm claimed to have more than $4.4 billion in assets, and the firm's complicated investment strategy -- which guaranteed annual returns of 10.5 percent or more without risk to principal -- was promoted heavily by Burnsville radio talk show host Pat Kiley and by Bo Beckman, a Minneapolis money manager with the Oxford Private Client Group, who also placed his and his relatives' money in the strategy.

One of Beckman's attorneys, Lawrence Shapiro of Greene Espel, said his firm's own investigation pointed to Panama, "and we are actively working with people there to help us determine if any currency investor funds can be traced to real estate in Panama."

On Tuesday the law firm filed a letter with the court seeking permission to remove a protective order on 36 documents that it says may help trace where the investors' money went. It said the documents indicate that wire transfers were made from a bank account that held investors' funds "to financial institutions or entities in Switzerland, Panama, Costa Rica and the United Kingdom."

Jack Harper, an attorney with Messerli and Kramer, represents 88 investors who are suing Cook, Beckman and other associates who promoted the currency investment. "We are well aware of Mr. Cook, et al's involvement in this project in Panama, and it is of great interest and concern to us, and highly relevant to what we are doing on behalf of our clients," Harper said this week.

Panama land mogul?

Saunders' websites indicate that his law firm handles bankruptcies, mortgage loan modifications and foreclosures, but he also claims expertise in international real estate investments, especially in Panama. In May, Saunders moved his law office from Norco to nearby Corona. But posters and promotional materials for the Panama condominium and casino projects still adorn the walls of his former office.

In 2003, Saunders was sanctioned by the Securities and Exchange Commission for allowing "false and misleading" statements to be published about the financing behind an online education company he owned called EKnowledge Group. In addition, the state of California filed a $401,868 tax lien against his home in February 2008, listing EKnowledge as the debtor.

Saunders declined to comment last week, saying he felt "constrained by ethics" because of the investigations of Cook and the Oxford Global investment strategy by regulators and a federal grand jury.

According to promotional materials, Saunders, Cook and a German real estate salesman in Panama named Holger Bauchinger co-founded and hold shares in a Panamanian company called Oxford Developers SA. They'd been planning to build a pair of condominium towers and a mammoth hotel-casino and convention center in the heart of Panama City, according to Niels Torring, who shared office space with Saunders from July 2008 through May of this year.

Torring said he and Saunders tried briefly to promote Cook's currency investment strategy, without success.

Torring says he was present when Saunders called Cook to confirm the receipt of some wire transfers, and saw bank statements with $2 million or more at a time going through Saunders' trust accounts. Saunders openly talked about sending $1.1 million a month to Panama to buy the land on Cook's behalf, Torring said.

"If I didn't believe that this was probably the investors' money, you and I wouldn't be talking," he said. "I have no reason to be here except for their sake."

Torring is a former fund-raiser for the Denmark Olympic Committee and a former boxing promoter and manager who once boasted 10 world champions and arranged fights for actor Mickey Rourke. He says he was promised a 10 percent share in the hotel-casino project for assembling an experienced team to build and run it. He said he signed up a couple of "big canons" to help the project go forward but hasn't seen a dime for his efforts over the past year.

Bauchinger, in a telephone interview from Panama, denied that Oxford Developers SA was behind the casino despite that fact that a web site identifies the firm as the developer and lists his office phone number. He said he thought Cook's name had been removed from the web site. A billboard on the casino property also listed Oxford Developers, SA along with its phone number.

Bauchinger said he and Saunders first met Cook by chance in Panama between February and April 2008. Cook was trying to open an investment bank, he said, but the bank never got off the ground. A few months later, Saunders evaluated Cook's currency investment program and in August 2008, he wrote a "legal opinion letter" stating that Oxford Global had $4.48 billion in assets under management. The newspaper obtained a copy of the letter, which says that Oxford Global's currency arbitrage accounts had produced average returns of 11 percent. "All accounts had 100% liquidity," the letter says.

Torring cited Saunder's review as one reason he felt comfortable working on the hotel-casino project.

Torring said he accompanied Saunders to Las Vegas in the fall of 2008 to meet Cook. Both Torring and Bauchinger , who was also present, said Cook impressed them as he interacted with some well regarded European hedge fund and money managers.

Larry Traw, a former Alaskan conservation official who has been developing beach front property in Panama for the past seven years, says he met Bauchinger, Saunders and Torring in Barcelona at a real estate investment fair in early November 2008. He said they had an expensive display promoting their projects, and they expressed an interest in his development, called Las Lajas.

Traw said they started working out a deal to work together, but he grew suspicious when Cook and his associates began having trouble getting Panamanian banks to accept wire transfers from the United States. "The bank that Gary Saunders used here in Panama was Scotia Bank," Traw said in an e-mail. " That bank closed their account because of the large amounts of money being transferred without explaining the source."

Asked how he knew that, Traw said, "I was right in the office watching it... They told me all this money was coming in from Oxford Group."

Traw said he met Cook in Panama last winter, at a Super Bowl party at the Majestic Casino that was attended by a number of European money managers. "There was like 14 of them that came over and all they did was party and spend a lot of money," Traw said.

Not long after that, Traw said he walked away.

"They wanted me to put in more and more money into their project without putting money into mine," Traw explained. "All it was to me was a big Ponzi scheme to pull people in," he said.

Traw said he has followed the stories on StarTribune.com about Cook and the controversial currency investment strategy he and his associates promoted. "I'm upset about it," he said. "People taking advantage of people like that makes me sick."

Bauchinger said he was shocked to read about Cook's troubles. "I don't want to hurt him or help him," Bauchinger said. But unless Cook is proven to have misappropriated funds, he said, "I have to assume he's not guilty."

Bauchinger said he has faxes documenting the source of funds Cook sent to buy the land, though he declined to share them. "I have reason to believe it came from private accounts and that has to be my statement until I know otherwise." He said the casino project is on schedule to make its final payment for the land this month and begin construction when the dry season begins in December. Torring, meanwhile, says he's heading to Europe this month -- at the request of some investors -- to work some private channels he has to help find their money.

"If I can in any way help people get their money back I'll be a happy camper," Torring said. "I just hope all the money's out there, that nobody is really a crook, and everybody will get their money back."

Dan Browning • 612-673-4493