Adviser tracks clients' cash to Panama

For months, investors in a soured currency investment program that was promoted by some Twin Cities financial advisers have been left to wonder what became of their money that seemingly vanished overnight.

Now the evidence is mounting that at least some of the missing millions went to Panama.

Bo Beckman, one of the Minneapolis financial advisers who promoted the currency investment, and one of his attorneys traveled to Panama last month in a frantic and successful effort to track down the fate of at least part of the missing money. They were able to identify and freeze some valuable land that a former business associate and others were buying for a condominium tower and another parcel that was intended to become the site of the largest hotel-casino in Panama City.

Beckman said he traveled to Panama after obtaining information from a variety of sources, including investigative reports in the Star Tribune, indicating that at least $12 million of the investors' money had been routed through a California attorney's office and on to Panama to pay for the land.

According to Lawrence Shapiro, the attorney who traveled to Panama with Beckman, a Panamanian court filed documents with the public land registry last week and notified banks nationwide that it had issued an order freezing both the land and any accounts held by the business entities developing the condo tower and casino.

Beckman is a 39-year-old financial adviser who owns the Oxford Private Client Group, where he specializes in equity investments. Until July, he operated out of the Van Dusen mansion in Minneapolis alongside Trevor Cook, who promoted the suspect currency investment through companies called Oxford Global Advisors and Oxford Global Partners. Beckman was paid commissions for referring clients to the currency investment.

Beckman, Cook and their companies are among 18 defendants in a federal lawsuit in Minneapolis brought by 107 investors from across the country who claim they can't get at about $35 million they invested in the currency program. Estimates of the total size of the currency investment program range from several hundred million dollars to as much as $4.4 billion.

Although they're codefendants in the lawsuit, Beckman's and Cook's responses to the investors' complaints couldn't be more different.

Cook has remained silent about the whereabouts of the investors' funds.

Beckman has hired attorneys in Minneapolis, Switzerland and Panama to try to find the money. He and his lawyers at Greene Espel in Minneapolis have held open meetings with investors and sent periodic updates on their recovery efforts. Beckman testified in court recently that he and his family made substantial investments in the currency program because he believed it was a good strategy compared to the then-teetering stock market.

Of course, helping the investors could be a good defensive strategy, too. Shapiro advised Beckman not to answer questions that strayed from his efforts to recover the money. Beckman insists that his only interest is to recover money for the investors.

"I don't see this as a defense against anything," Beckman said last week. "We have relationships with our clients that are unique. We feel the pains that they feel. These stories that they tell, they tear at your guts; they rip your heart out."

As for Cook, Beckman said, "I've trusted an individual, and he completely betrayed us."

Panama bound

After a news story indicated that the investors' money might have been sent to Panama, Beckman and Shapiro decided to see for themselves. Shapiro left Oct. 10, and Beckman followed the next day.

"We were cautioned prior to going down by many sources: Be paranoid of everything, don't trust anyone, watch your back," Beckman said.

Shapiro added: "Don't trust the court system. Be prepared for people demanding bribes."

After interviewing a number of lawyers, they said they hired the law firm of Morgan & Morgan, which they were convinced knew the lay of the land and would represent them honestly.

"And then we hit the road. Literally," Beckman said.

To get a court order against the property, they would first need the property ID number, called a finca. The numbers are supposed to be posted on vacant land, but in practice that seldom happens, Shapiro said.

They had a brochure for a high-rise condominium project called Ocean Pointe in the tony Coco del Mar neighborhood that some associates of Cook had been marketing. The brochure listed a street corner, and they drove around until they found it. There was no condo tower, just a small house next to a foreign consulate.

"We're walking around the neighborhood, we're talking to utility workers, we're talking to the people walking their dogs, we're talking to doormen," Beckman recalled. "We're talking to anybody that we can regarding, have they heard of this Ocean Pointe, and showing them this picture [from a brochure]."

Nothing. So they called a former associate of Cook's, who told them to find a closed German restaurant about a half a block away. When they found that, they asked neighboring businesses for the finca numbers of their properties and figured out the location of two lots where Cook and some associates planned to build a condo tower called the Vineyard.

The two lots where the hotel-casino project is planned was easier to spot. It had a large billboard on it; Beckman posed for a picture in front of it.

Shapiro said many people seemed to know what they were doing, and a number of them offered to help. "We had people contacting us in our hotel. And we're like, 'How in the world do these people even know that we're here doing this?" he said.

So in the middle of their four-day trip, they visited the U.S. Embassy, just to make sure that someone knew what they were doing there. Both of them said the embassy was the only place they felt safe in Panama.

Property search succeeds

With the finca numbers they were able to pull property records. They found that a company called CDE 1 SA had bought the lots for the Vineyard condos from Xinhua, a Chinese news agency, on Dec. 15, 2008. Cook is listed as a director and president of the company. Gary Saunders, the California lawyer working with Cook, is listed as a director and treasurer. Holger Bauchinger, a German real estate agent in Panama who works closely with Saunders, is listed as a director and secretary.

Shapiro said sources told him that Cook invested $2.6 million in the condo project. Property records for the casino are more complex. Krull Future Co. sold the land to Panama Oxford Investment SA on Nov. 25, 2008. Though Cook's name is not listed on the property records, Shapiro said various sources have told him that Cook has been buying shares in Panama Oxford. He initially invested $7 million on an $11 million deal, the sources said.

A marketing feasibility study by HVS International in Miami shows the upscale hotel would have 800 rooms and more than 75,000 square feet of meeting and theatre space. HVS predicted the casino would net $14.6 million in 2013 when it's expected to open, rising to $22.8 million by 2022.

Cook had been listed as a director of Oxford Developers SA, which was advertised as the casino developer until questions were raised about the currency investment program. Since then, Shapiro said, Cook's name has been dropped and the name of Bauchinger's secretary replaced him.

Saunders could not be reached for comment last week. Cook's attorney, John Thompson, declined to comment, other than to confirm that Cook had investments in Panama.

Bauchinger said Friday that he didn't know about any orders freezing the properties until a reporter called. After reviewing the document, he said, "It's not a court order. It's just a file for a lawsuit, and that can take two years."

After an Oct. 1 story about the casino in the Star Tribune, he said, an investor backed out and he and his partners had to get an extension on their final payment, which they expect to make next week. He said if he hadn't found another investor to step in, Cook would have lost everything under a provision in the contract extension.

"We can only close it if the land is not seized by somebody," Bauchinger said.

Shapiro said it doesn't matter. The First Judicial Circuit Court of Panama has put a freeze on both the condo and casino properties, as well as any bank accounts held by Panama Oxford Investment and CDE 1.

Shapiro said he doesn't know how much money is in the accounts, or the fair market value of the lots they've tied up. "But we believe that they have significant value, especially the hotel and casino site," Shapiro said.

"You could look at the large amounts of money that have disappeared and ask yourself, 'Why is Bo Beckman spending the kind of money that he's had to spend out of his own pocket to send lawyers down to Panama and retain other lawyers in Panama to recover an amount of money that, in relative terms, may not be that large?'" Shapiro said.

"And the answer is, to the individual investors, every dollar is extraordinarily important. And while what we've accomplished in Panama is only the tip of the iceberg, it's at least a beginning."

A court ruling in Minnesota lifted some restrictions on the banking information Beckman obtained in his investigation. He said he plans to use it to trace investor funds in Switzerland and anywhere else they might have gone -- until his money runs out.

Though Beckman wouldn't say how much he's spent, he said he can't continue at this rate for much longer. "I'm one person," he said. "The scope of this, I know not. Every lead that we're provided we pursue ... . I don't know what kind of money people thought I had," Beckman said. "We don't have much. We're doing everything we can."

Dan Browning • 612-673-4493