Jerrold Gunn, 65, turned himself in to Winnipeg police last Thursday, and was released on $50,000 cash bail later that day by a Court of Queen's Bench judge.
Gunn served as legal adviser for a firm called Hammersmith Trust LLC, which was registered in Nevis, West Indies.
He is accused of pocketing between $220,000 and $250,000 US in the operation, for which he drew up official-looking loan and security documents that went to prospective investors.
According to a brochure, Hammersmith offered two investment programs: The "high-yield program," which would purportedly earn 50 to 60 per cent per month, and the "quick-turnaround program," which would return up to 80 per cent within 15 days.
Gunn's Winnipeg lawyer, Paul Walsh, said his client plans to fight the extradition, and "absolutely denies" any knowledge that documents he prepared for Hammersmith were used for illegitimate purposes.
Gunn believed he was preparing documents for an above-board American businessman, and plans to present evidence supporting that contention in court.
Walsh said much of the case against Gunn in Florida is based on evidence from other accused people who are seeking to evade responsibility by pointing fingers at innocent people.
In Winnipeg, Federal Crown attorney David Frayer agreed to Gunn's bail release on stringent conditions, including an order that Gunn must reside with his wife at their River Heights home and report weekly to police.
A date for the extradition hearing could be set next week.
Five Americans have already been convicted for their roles in the scam, which began in 1997 in Tennessee and has spread to Florida and Nevada.
Their sentences have ranged between five years and 11 years in prison, in addition to court orders that have required them to pay up to $25 million in restitution, Frayer said yesterday.
Police have identified more than 200 people in Canada, the United States and the United Kingdom who invested nearly $30 million US in the offshore investment scheme during 1997 and 1998 and have yet to receive a cent.
Investors were told of a "prime bank debenture program," a genre of investment that is based on sham principals. In recent years, international con artists have used prime bank schemes to defraud investors throughout the world of hundreds of millions of dollars.
A brochure claimed that only the world's "most powerful and stable Money Centre Banks" participate in the program, and that it is regulated by "the 100-year-old, worldwide regulatory body for the international banking community, the International Chamber of Commerce in Paris."
However, to prevent upsetting the status quo, these programs had to be kept secret, according to the brochure.
"The SEC's and the Treasury Department's official positions are that the programs do not exist. Think of what would happen to the stock market if this much safer, much-higher yielding alternative were known."
Normally investors were required to invest a minimum of $10 million, but some first-time investors were told they could invest much smaller amounts.
According to the Law Society of Manitoba, Gunn has been the subject of five disciplinary proceedings, culminating in April 1992 with a one-year suspension. After that suspension expired, he never renewed his membership in the law society.
Barbara Hamilton, then- president of the Law Society, said the suspension related to Gunn's "failure to protect his clients' interests in a business transaction and not give full disclosure". Gunn, who claimed at the time he had retired, was also ordered to pay $2,150 in costs.
Gunn is one of two Canadians to be charged in the $30 million US offshore investment scheme.
Fred Gilliland, 51, was arrested last week outside his West Vancouver mansion and remains in custody.
Gilliland moved to Florida in 1997 and allegedly helped defraud investors out of $30 million US in the offshore investment scheme through his company, Sterling Management Services Ltd., which operated out of an office in St. Petersburg, but was incorporated in the Turks & Caicos, an offshore tax and secrecy haven. Sterling, in turn, lent the money to Hammersmith.
In 1999, he moved back to Canada and purchased a palatial, three-storey, 5,150-square-foot home in West Vancouver with a spectacular view of the city, the Vancouver Sun reported last month. He is the target of three separate legal actions:
In 2000, a group of aggrieved investors filed a lawsuit in Florida accusing Gilliland of fraud, conspiracy and racketeering.
In 2001, a Florida grand jury indicted him for allegedly perpetrating a massive fraud.
In 2002, the U.S. Securities and Exchange Commission filed a civil action in North Carolina accusing him of securities fraud.
In all three cases, he failed to respond. U.S. authorities branded him a fugitive from U.S. justice and asked the Canadian Justice Department to initiate extradition proceedings on their behalf.
Gilliland began a bail hearing late last week, but it has been adjourned indefinitely and he remains in custody.