Former staff of Vancouver financial services outfit face possible extradition to answer to U.S. charges

Former staff of PacNet, the financial services firm at the centre of the largest civil forfeiture settlement in B.C. history, are under indictment in Nevada and could be extradited to answer to charges of mail and wire fraud and money laundering.

This week, the B.C. government and PacNet announced the terms of the $10-million dollar settlement.

B.C. Solicitor General Mike Farnworth describes PacNet as "a money-service business that was headquartered in B.C. and provided payment-processing services, including to individuals found guilty of or alleged to be running fraudulent scams against vulnerable seniors and other persons in Canada and around the world."

PacNet says the agreement does not include “admission or finding of unlawful activity” on the part of the company or its principals.

The company ceased operations in 2016, around the same time authorities in the United States were ramping up investigations into some of the individuals and companies that were clients of PacNet.

In August of this year, a judge in New York sentenced a pair of men there to lengthy prison sentences and ordered them to forfeit close to $80-million to the U.S. government.

Sean Novis received a seven-and-a-half year sentence and Gary Denkberg was sentenced to five-and-a-half years.

A jury convicted them of mail and wire fraud and other financial charges related to a scheme where vulnerable seniors were targeted in a sweepstakes scam.

"Many of these letters, for example, falsely claim that the recipient has won cash or valuable prizes,” said then-U.S. Attorney General Loretta Lynch in 2016, as she announced charges.

“In order to collect these benefits, the letters say the recipient need only send in a small amount of money for a processing fee or taxes."

According to U.S. court documents, PacNet served as a middle man between mail fraudsters and the vulnerable victims who sent them money.

In 2019, the U.S. Attorney in Nevada indicted several PacNet employees accused of mail and wire fraud and money laundering.

Company founder Rosanne Day of Vancouver was among the people named in the indictment, which says she was aware of the fraudulent activity, but allowed PacNet to continue processing cheques for the scammers anyway.

“From 2013 to 2015 – the last three full years that PacNet was in operation – PacNet paid in salary and bonus a total in Canadian dollars of approximately $15-million to defendant Rosanne Day,” the indictment reads.

Nobody answered the door at Day’s west side home in Vancouver when CTV News knocked on Wednesday.

“The company's former employees have vigorously denied all the allegations against them,” PacNet said in a statement on its website.

Other court documents related to the civil forfeiture suit in B.C. say American authorities have started extradition proceedings against Day and others named in the Nevada indictment.

None of the charges against Day have been proven in court.