Toronto, Ontario- Tuesday, June 14, 2005 -- The Greater Toronto Area (GTA) Integrated Market Enforcement Team (IMET) has charged three senior corporate executives of the former Betacom Corporation Inc. with accounting fraud. Police allege that the accused created an elaborate scheme of paper-trails in order to exaggerate the financial position and the performance of the company and mislead investors, creditors and auditors. “IMET’s mandate is to investigate allegations of corporate malfeasance at the highest corporate level and to lay charges where appropriate,” said RCMP Superintendent Craig Hannaford, Officer in Charge of the RCMP-led GTA Integrated Market Enforcement Team. “The message here is that if you run a public company and if you engage in illegal activity, you run the risk of facing significant consequences to your criminal actions, no matter what your position in the company is or was.” The GTA IMET investigation into Betacom Corporation Inc. began in March 2004 as a referral from the Ontario Securities Commission. Specifically, police allege that the company overstated revenues in successive quarters in 2002-2003 ranging from $700,000 to $2.3 million in audited and unaudited financial statements filed and published on the System for Electronic Document Analysis and Retrieval (SEDAR) between October 30, 2002 and July 30, 2003. Police further allege that the company created false sales of approximately $1.1 million and did not disclose a $300,000 loan nor the interest payments the company was making on the loan in their audited financial statements for the year ended February 28, 2003, also filed and published on SEDAR. SEDAR facilitates the electronic filing of securities information as required by the securities agencies in Canada and allows for the public dissemination of Canadian securities information collected in the securities filing process. This system is relied upon by private investors and the public to make investment decisions. In December 2003, Betacom Corporation Inc. declared bankruptcy. At the completion of bankruptcy proceedings, secured creditors with claims totaling approximately $6.6 million suffered a shortfall of approximately $1.1 million. Unsecured creditors whose claims totaled approximately $4.1 million lost all of their investment. Many of Betacom's employees were left with monies owing to them for wages and expenses. Approximately 16 employees suffered individual losses ranging from more than $300 to more than $41,000. Shareholders, including some employees who were also shareholders, lost all of their investment in the company. One private investor lost more than $23,000 of his retirement savings. As at February 28, 2003 there were 29,612,856 outstanding shares valued at $20,706,582. These shares have no value today. Betacom Corporation Inc. was a Canadian company whose core business concerned technologies and products to assist the visually impaired. The company was an Ontario reporting issuer with a head office in Mississauga, Ontario. The shares of Betacom traded on the TSX Venture exchange. Charged with 3 counts of Fraud under Section 380 of the Criminal Code of Canada are: Brian McCARTHY, age 51, Rectory Lane, Oakville, Ontario. Mr. McCARTHY was formerly the President and Chief Executive Officer of Betacom Corporation Inc. from 1997 to September 2003 when he was removed from his position by the Board of Directors. Douglas McINTYRE, C.A., age 58, Legendary Trail, Stouffville, Ontario. Mr. McINTYRE was formerly the Chief Financial Officer of Betacom Corporation Inc. from 2001 to September 2003. As the Chief Financial Officer, Mr. McINTYRE was responsible for all of the financial dealings of the company. Philip SPENSIERI, C.A., age 46, McCarty Crescent, Markham, Ontario. Mr. SPENSIERI was formerly the Chief Operating Officer of Betacom Corporation Inc. from 1997 until Betacom’s bankruptcy in December 2003. As the Chief Operating Officer, Mr. SPENSIERI was responsible for the day-to-day operations of the company. The accused are in custody and are scheduled to appear at Old City Hall Courts later today for a bail hearing. Integrated Market Enforcement Teams(IMETs) are units of highly skilled investigators, lawyers and forensic accountants based in major financial centres in Canada for the express purpose of detecting, investigating and deterring serious corporate and capital markets fraud. The objective of IMET is to maintain investor confidence in Canada’s capital markets by deterring market fraud and theft through enhanced enforcement and prosecution of serious market fraud and theft offences in Canada. The investigative work of IMET complements the work of the financial markets’ regulatory organizations. The Greater Toronto Area IMET was launched in November 2003 and brings together specialized investigative skills from the RCMP and participating agencies. It is currently supported by the Ontario Securities Commission, Investment Dealers Association of Canada, Market Regulation Services Inc., the Mutual Fund Dealers Association of Canada and Department of Justice Canada. Integrated Market Enforcement Teams have also been created in Vancouver, Montreal and Calgary as part of the Government of Canada’s strategy to combat serious capital market fraud in Canada. -30- Media Contact: RCMP Corporal Michele Paradis 416-715-2375 - pager 905-691-3952 - cellular 416-952-4619 - office
