A year ago, when Infitialis wrote an article on PRTN on SeekingAlpha, they listed five people as being likely to be behind Awesomepennystocks.com (APS) and its related stock promotion websites. SeekingAlpha was threatened with a libel lawsuit (pdf) so that article was revised and the names were removed. I found a copy of the earlier version of that article still online here. One of the people mentioned as likely to be behind APS was John Babikian.
Babikian was just featured in two articles in the Journal de Montreal (in French):
Les Américains s’intéressent aussi au mystérieux millionnaire – 2013-10-22 (free version)
Le fisc veut sa Bugatti Veyron – 2013-10-20 (English version at the Toronto Sun)
These articles discuss his enormous wealth and the taxes he has not paid. A source told me that there will be more articles to follow and that they will link Babikian to Awesomepennystocks and detail where exactly his money came from.
See my article from yesterday on Awesomepennystocks.com retiring.
Here is an excerpt from the English version of the first article:
MONTREAL – Financial authorities in Canada and the U.S. are searching for John Babikian, a mysterious Montreal playboy who amassed a $100-million fortune in a few short years before moving to Monaco.
The 26-year-old entrepreneur left behind luxury items including a $2-million mansion north of Montreal, a 2008 Bugatti Veyron and 2010 Bentley Continental, QMI Agency has learned.
Revenue Quebec is now chasing the millionaire for back taxes.
Tax authorities allege $11.5 million in income was hidden from the government between 2008 and 2010. Babikian reported $47,677 in income in 2008, documents say.
Quebec’s AMF financial watchdog and its American counterpart, the Securities and Exchange Commission (SEC ), also want to know how Babikian earned his keep.
Here is a full translation (by me) of the second article:
The origin of the mysterious fortune of Montreal resident John Babikian, estimated at C$100 million, attracted not only the attention of the Quebec tax authorities but also of the American authorities.
The spokesperson for the AMF (l’Autorité des marchés financiers), Sylvain Theberge, indicated to our research bureau that his American counterpart, the SEC, had contacted the AMF about Babikian in 2011.
“The SEC was investigating this gentleman and they asked us to help them identify him,” he said.
For its part, the SEC refused to confirm the existence of an investigation. “When we take action against someone it becomes public then,” said a spokesperson for the the SEC in New York.
Acorrding to documents prepared by a lawyer of the Bank of Montreal, John Babikian launched his business at the age of 19. He created a company specializing in internet marketing, J.B. Marketing.
Babikian became a specialist in spam. At the time the he opened a business account at the Bank of Montreal in 2006 he disclosed that he earned $24,000 per year, according to documents.
However, his company J.B. Marketing rapidly sent hundreds of thousands of dollars into his bank account. These sums came from nebulous and hard to trace sources.
In March 2010 the Bank of Montreal closed his bank accounts because Babikian, according to the bank, did not furnish satisfactory explanations of where the money was coming from.
[Edit 2013-10-30]: The wife of John Babikian (who just last month filed for divorce in Quebec), sued him in California for fraud for his actions to sell their properties in California while depriving her of her rightful share of the proceeds. See her legal complaint. Credit for finding that lawsuit goes to Infitialis.
The two properties that are discussed in that lawsuit are 1401 Londonderry Place, Los Angeles, CA and 642 North Laurel Avenue Los Angeles, CA (links are to Zillow). The Londonderry house was purchased in March 2012 for $6 million and is currently estimated to be worth $10.5 million by Zillow. The Laurel Avenue house was purchased in December 2010 for $2.2 million and is now estimated by Zillow to be worth $2.7 million. Babikian’s wife alleges that he fraudulently transferred the title of the Laurel Avenue house to Middlebay Trade Ltd., a Republic of Seychelles entity that he secretly controls. The transfer to Middlebay Trade Ltd. is shown by property records.
I also credit Infitialis with finding Babikian’s wife’s divorce suit in Quebec, even though the complaint has been sealed. After posting the lawsuit here I received a request from the lawyer representing Babikian’s wife requesting that I redact her client’s name. Because she asked nicely and admitted that the I was not prohibited by the law from disseminating the lawsuit (because US privacy laws are much looser than Canadian ones), and because her client’s divorce suit will likely help to send Babikian and his colleagues to prison, I have complied with her request and thus have the redacted copy of the lawsuit here (pdf). That redacted copy of the suit is at Promotion Stock Secrets’ website (see their excellent post on Babikian and Awesomepennystocks.com).
[Edit 2013-10-25] A third article has been posted on the Journal de Montreal: Une Fortune Cachee dans les Paradis Fiscaux. Below is my translation:
Passports from four countries, bank accounts in ten tax havens and an encrypted Blackberry destroyed each week, John Babikian, the mysterious 26 year old Montreal multimillionaire , took extreme measures to protect his money.
New information obtained by our research bureau shows that the the multitalented former student of La Dauversiere in the north of Montreal has built a veritable offshore empire. This portfolio has had repercussions in the United States with an investigation by the SEC.
The famous Bugatti Veyron worth $1.5m appeared in the Grand Prix of Montreal in June and is only the tip of the iceberg of an immense fortune for this businessman, according to the allegations in court documents that we consulted.
A wine collection worth $1m and two sculptures by New York sculptor Arturo di Modica worth $600,000 are among the belongings that Babikian has removed from Quebec over the last few months.
Babikian also owns nine condos win the Bahamas of which seven are owned in the name of a shell company according to our sources. He also bought a Pagani Huara in Italy, a luxury car that costs $1.1m.
No less than twenty bussinesses and so-called charities, most of which are completely empty shells in tax havens, help to hide other riches according to the documents we have consulted.
John Babikian has taken extreme measures to evade the watchful eyes of investigators.
“He runs his affairs solely with specially encrypted Blackberrys that he uses for a few days or weeks before he destroys and replaces them,” court documents allege.
After destroying each smartphone and breaking it into multiple pieces that he tosses into different garbage cans “so that it is absolutely impossible … to access the information that they hold”, according to those court documents.
John Babikian also has a special portable device from HSBC Bank in Hong Kong that lets him make international wire transfers from anywhere in the world.
From the infographic at the top of the article detailing some of Babikians holdings:
John Babikian travels in a private Gulfstream jet owned by NetJets. His account with NetJets is in the name of the shell charity “Vertical International Relief Fund”
Hong Kong – Babikian has bank accounts
Seychelles – Multiple shell companies (Middlebay Trade Ltd., Liner Investments Ltd., Intelligent Alliance Corp., Auorora Intour Ltd., Monolith Ventures)
Lebanon – Babikian is a citizen
Malta – Babikian has bank accounts
Monaco – Babikian has two bank acocunts
St. Kitts and Nevis – Babikian is a citizen, has shell companies, and owns real estate
Panama – Shell companies (Montblue Commerce, Nothingham Group, Normandia Capital)
British Virgin Islands – Shell companies (Arrow Import & Export Corporation, Antica Ventures)
Bahamas – Nine condos (seven of which are in the name of a shell company, John Jack Ventures), bank account, company (Kenora Overseas)
Quebec – Numbered companies (9264-5076 Quebec Inc, Bargainoo Est), charity (Tidal East Global Relief)
United States – Two houses in California worth $8.2m, a shell company (Oriwa Villas Ltd), shares of companies, charity organization
Belize – Bank accounts, companies (Antica Ventures Ltd., Mediasky Holdings Ltd., Beddington Marketing)
Guatemala – Diplomatic passport, had taken steps to start a private bank, shell company (One Berger Circle)