Panama Papers reveal Canada's top offshore middleman, Fred Sharp of Vancouver, linked to fraudster

A Vancouver companyled by former lawyer Fred Sharpcreated more Canadian-linked offshore companies using Mossack Fonsecathan any other Canadian middleman, and stood up fora convicted fraudster, according to a joint CBC News/Toronto Star investigation based on the Panama Papers.

The leakhas shone a spotlight on the "enablers"ofthe offshore banking world.

International protocols expect that thosewho createoffshore companies willscreen their clients toweed outtax evaders,fraudstersand terrorists.

Sharp's company, Corporate House, which operates overseas using a company called Bond and Co., isknown as the go-toinvestment firm for wealthyCanadians who want to keep assets private and use offshore tax havens to minimize their tax burden, according to sources in the wealth management industry.

Sharp would later register an offshore company that would be used by the same prolific fraudster who cost him his legal career.

MossackFonseca'sCanadian rep

Sharp helped register 1,167 offshore entities from his Vancouver office, according to documents in a massive leakfrom the law firm Mossack Fonseca, obtained by the International Consortium of Investigative Journalists and shared with the CBC and the Toronto Star.

Tax avoidance is not necessarily illegal, and many offshore entities are set up for legitimate businesses. Sharp became Mossack Fonseca's Canadian representative in 1994.

"Referrals of Canadian [clients]must be made to Corporate House" (Sharp's company) say internal instructions for the Panamanian lawyers.

Destroy invoices, don't sendmail to Canada

The documents also show that measures were taken to minimize a paper trail to Canada, as staff at Mossack Fonseca were also forbidden from sending certain financial records to Vancouver.

"Do not sent [sic]any annual invoice nor statement of account to the client by email, neither by fax, nor airmail," it instructs.

"Printed invoices or statement of accts should be destroyed," the documents say.

"For me that's a red flag. They do not want any paper trail coming back to them,"saidKim Marsh, a formerRCMPfraud investigator whonow works in risk management.

Server hosted in Panama

The leak also contains a 2006 receipt showing Sharp's company paid Mossack Fonseca $15,000 to buy and host a server in rented office space at their Panama office.

Marsh says that makes executing a warrant difficult.

"By the time you get there, information disappears.It buys time," Marsh said.

Law society suspension linked to fraudster

Mossack Fonsecahasrepeatedlysaid itdoes notdo business with criminals, and that itexpects themiddlemen they deal with tonotify the companyif any of theirclients are convicted or listed by a sanctioning body.

However, details in the Panama Papers lead to the discovery of links between one of the offshore companies Sharp registered, and a prolific fraudster.

Sharp was suspended from practising law in B.C. in 1995 after he admitted to professional misconduct for "knowingly taking instructions" from a director disqualified "because of a criminal record for fraud."

Mike Mitton, a former client of Sharp's who had dozens of fraud convictions by then, used Sharp to steal nearly half amillion dollars from a company Mitton had illegally taken control of.

After a one-year suspension, Sharp never rejoined the B.C. Law Society.

Doing business with convicted fraudster

But it seems Sharp's connection to Mitton did not end with his suspension from the law society.

Sharp registered a company called Great Northwest Capital Corporationfor two men who say it was Mitton who brought them to Sharp's Vancouver office to sign documents.

"He had us as nominees for him but us not realizing what he was doing or what it was for," says Charles Wiebe.

Vancouver lawyer Barry Holmesrecalls themeeting, whereMittondirected Sharp on the creation of the company.

Holmes says it is standard practice for lawyers to have their names on their clients' corporate records.

"What the client does with [the company]once the incorporation part is over, who knows?"

A year after Great Northwestwas created,a memo alerted Mossack Fonseca that the RCMP were asking questions, alleging Mitton "used Great Northwest Capital Corporation to perpetrate a $2.1 million fraud" against a brokerage firm in the Isle of Man.

Sharp defends 'professional swindler'

That prompted a call to Sharp. At this point, if Sharp didn't see red flagsbefore,police were now alleging fraud.

Notes in Spanish of the conversation say Sharp advised Mossack Fonsecathat "in his mind there is no existence of fraud," andthiswas a civil matter.

Four years later, Mittonpleaded guilty to six counts of fraud, totalling$2.4million, involving brokers in Canada, U.S. and the Isle of Man.

The judge declared him a "professional swindler" and sentenced him to four years in prison.

Mitton now has more than 110 convictions and was recently arrested in Quebec.

If someone likeMittoncan get anoverseas account, more oversight is needed,say experts.

"That sort of activity screams red flag and screams investigation necessary," said DanZitting, a former auditor whonow works with ACL, a Vancouver tech company that helps banks and governments catch fraud.

"If that's the case, it certainly looks really bad` hesaid.

Sharp defends 'offshore world'

Reached by phone on April 28, Sharp declined an interview request.

By May 3the phone number at Corporate House was disconnected.

"This was decided last year when it [Corporate House]stopped maintaining an office, a decision unconnected with your activities," said Sharpin an email to CBC News and the Toronto Star.

"I cannot speak accurately to your various queries as you have provided no evidence regarding events that may or may not have occurred 20 years ago," wrote Sharp.

"Tax planning is a global reality that results from international competition and inefficient governmental regulation and is legal," said Sharp, who pointedout that stealing a law firm's private files is not.

"When will the thief be revealed?" saidSharp.

A visit to his Melville Street office tower shows the sign on the door now says Lake House Group.

When asked if this was Corporate House, aman said, "Yes, we just changed our name a while ago because Fred would rather be at the lake."

CBC News Investigates

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