The Royal Indian Scam

Few of the pieces fit in this jigsaw puzzleThe
David Baines, Vancouver Sun
Published: Wednesday, April 16, 2008

Investigating the financial dealings of a company is not unlike assembling a jigsaw puzzle. As the pieces come together, you start to get a much clearer picture of what you're dealing with.

Such is the case with Royal Indian Raj International Corp., a Vancouver-based company that has raised an estimated $8 million to $10 million from private investors, ostensibly to provide seed capital for a $3-billion, fully integrated city near Bangalore, India.

The company is run by chairman and CEO Manoj Benjamin and his father, Collins Benjamin, who serves as president. For the past nine years, they have been touting their so-called "smart city," but have yet to build anything.

Investors, who include several Major League Baseball players, are getting impatient. Two investors have filed lawsuits in B.C. Supreme Court. One of them, former employee Bill Zack, has been countersued after he allegedly set up a website (www.royalindianscam.com) dismissing the company as a sham.

The Benjamins are now pre-selling the first phase of their project -- 236 residential units and a Jack Nicklaus-designed golf course. As part of their promotional efforts, they are hosting a dinner at Le Meridien Hotel in Bangalore on Friday. Featured guest is the Golden Bear himself.

Manoj Benjamin claims in promotional literature that his "degrees in business laid a foundation for extensive, successful experience and senior positions in property development, commercial and residential construction across Canada."

I was only able to confirm one business degree, a bachelor of commerce degree from St. Mary's University. As for his "extensive, successful experience," I have discovered that he stumbled from one failed business deal to another. By the summer of 1993, he had amassed so many debts that he declared personal bankruptcy in Nova Scotia.

But that's not all. The superintendent of bankruptcy's office was so disturbed with his business dealings that they referred the matter to RCMP for investigation. Halifax police also started their own investigation, and the Crown eventually charged him with two counts of defrauding investors.

After a trial in February 1996, Nova Scotia Supreme Court Judge M. Stewart said Benjamin's actions made the judge "suspicious" that Benjamin intended to commit fraud, but mere suspicion wasn't enough.

"I have strong reservations about the intentions of the accused, but on the totality of the evidence, I cannot find that the intent to defraud beyond a reasonable doubt was present," he said.

Royal Indian Raj's promotional literature also portrays Collins as an accomplished businessman who "managed a nation-wide development construction consortium." However, it doesn't identify the consortium, and the company has refused to provide any details.

What we know for sure is that his fortunes plunged along with his son's. In 1993, he went on social assistance, and to supplement the family income, he operated a concession stand at the annual Buskers' Festival in Halifax.

That same year, the Benjamins moved to Vancouver. After a brief stint with developer Tarsem Gill (who would later perpetrate a $40-million real estate fraud), they set up a company called Carriage Lane Fine Homes.

Because Manoj was still an undischarged bankrupt, he couldn't serve as a director. Collins was installed as a director, but Manoj handled the finances.

They built half a dozen duplexes, but creditors were not paid and the company became insolvent. Collins, as a director of the company, was named in nearly three dozen lawsuits.

In December 1999 -- more than six years after declaring bankruptcy -- Manoj finally obtained an absolute discharge. That same year, he and his father and his brother, Ravi, incorporated Royal Indian Raj and began raising money to become a "leading force in building the new India."
Email to a friendEmail to a friendPrinter friendlyPrinter friendly
Font:

* *
* *
* *
* *

AddThis Social Bookmark Button

Until March 2007, this vision consisted entirely of real estate and infrastructure development. Then, out of the blue, the company announced it had acquired a 10-per-cent interest in Global Lottery Corp., a Vancouver company that was negotiating with the Indian government to run lotteries in that country.

Global president Gary Newman told me his company would announce the following month it had secured two "major" government lotteries (which, if true, would have amounted to illegal insider information).

To finance the initiative, Royal Indian Raj announced it would extend to Global Lottery $250 million of a $547-million line of credit it had negotiated with Global Emerging Markets Group in New York.

This was a ludicrous proposition. Global Lottery trades on the lowly "pink sheets" -- an unregulated over-the-counter market in the United States -- at a mere 28 cents.

Unaudited statements for the six months ending June 30, 2007 show the company had zero revenues, less than $150,000 in assets, a serious working capital deficit, and negative equity. Not the sort of company that you would normally lend $250 million.

Also, Global Lottery's chief financial officer is listed as Piers Van Ziffle, who was expelled from the B.C. Institute of Chartered Accountants in 1990 after he was found to have falsified the books of a Vancouver Stock Exchange company called Marathon Minerals.

Then there is Newman himself. He earlier ran another dismal pink sheet company called Choice Sports Network Inc. The investor relations contact was a person named Peter Matusak.

Share subscription forms for Choice Sports were later found in the possession of U.S. securities fraudster Fred Gilliland, who was on the lam in West Vancouver and scamming people by selling essentially worthless U.S. penny stocks.

Gilliland was arrested by RCMP in 2005. Bail was set at $750,000 -- $250,000 to be posted by each of three different sureties. Three sureties stepped forward, but it was later discovered the money came from a single source and the three sureties were simply nominees.

One of the sureties later revealed he had been asked by Matusak, whom he described as a close friend of Gilliland's, to act as a nominee.

A B.C. Supreme Court judge later dismissed the provision of the bail monies by the three nominees as "nothing more than a sham calculated to frustrate the spirit and purpose of the [bail] order."

None of this has anything to do with the Benjamins, but it has a lot to do with Gary Newman, who is being advanced as one of their key business associates. Despite their very regal pretensions, it is clear the Benjamins have been keeping rather plebian company.