Canadian developer pleads guilty in US$26M scam

Jun 16, 2010 News

(Bloomberg) — Canadian developer Alberto DoCouto, who bilked investors of more than $26 million in bogus mining projects, including ones in Guyana and Peru, agreed to plead guilty to securities fraud after almost three years in jail awaiting trial in Las Vegas, Nevada.
The All Japan Liquor Merchant Association, a Japanese pension fund, invested about $6.4 million in a project to develop a mine in Guyana, prosecutors said.
DoCouto, who relied on a public defender for most of the time since he was charged, agreed to pay the U.S. a penalty of $26.1 million.
His agreement with federal prosecutors also calls for a sentence ranging from 63 months to 150 months under the U.S. guidelines. The term, to be determined by a judge, will depend on his criminal history.
“The United States expressly states that it intends to recommend a sentence at the high end of the applicable sentencing range,” according to the June 11 agreement, which was posted on a court website yesterday.
DoCouto, of Henderson, Nevada, moved to the U.S. in 2002 after he was acquitted of fraud charges in Canada in 1998.
He was accused in Nevada of persuading Japanese, Canadian and U.S. investors to give him money to develop mines in Peru, Nevada and Guyana. He admitted he made no effort to carry out the projects, and as a result investors lost more than $26 million.
“While investors lost almost all the money they invested in DoCouto’s scheme, DoCouto enriched himself at their expense,” according to a statement he and prosecutors agreed was true. “DoCouto used funds obtained from investors for the express purpose of developing the purported mining and real estate projects to lead a lavish lifestyle complete with an opulent home, luxury automobiles and profligate spending,”
The plea agreement must be approved by a judge.
The charges also included DoCouto’s promotion of Vista Continental Corp., whose shares surged from zero to $7.25 in 2002, valuing the company at $326 million. He said the company’s gold property in Peru was a “blockbuster,” potentially worth billions of dollars.
DoCouto, Vista’s majority shareholder, used the money to finance a lifestyle that included the purchase of two Bentley automobiles for more than $650,000, including a 2002 Arnage, prosecutors said. He didn’t start a mine, they said.
Prosecutors agreed to drop more than 170 charges in exchange for the guilty plea to two counts of securities fraud.
DoCouto has been in jail since Aug. 24, 2007, when he was charged with wire and securities fraud, making false statements and visa fraud.
He was 64 at the time. The case stalled as DoCouto changed lawyers and prosecutors accumulated more than 40,000 pages of documents as evidence.

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