ASC orders $4.1 million in penalties in Gold-Quest International Ponzi scheme

CALGARY, June 22 /CNW/ - The Alberta Securities Commission (ASC) has imposed significant sanctions against the central players involved in the Nevada-based Gold-Quest International Corp. investment scheme. Gold-Quest International and its securities have been permanently cease-traded in Alberta, and Gold-Quest International's creator and operator David Michael Greene (a former Alberta resident) and its operator John Jenkins (a United States resident) have each been permanently banned from the Alberta capital market and ordered to pay an administrative penalty of $2 million.

Michael McGee, who played a lesser but still considerable role in the Gold-Quest International investment scheme, has been banned from the Alberta capital market for 10 years and ordered to pay an administrative penalty of $100,000. Gold-Quest International's director and the president Delroy Atwood has been prohibited from acting as a director or officer of any issuer for five years. Greene, Jenkins, McGee and Atwood have also been ordered to pay costs totalling $49,700.

An ASC panel previously found that Gold-Quest International, Greene, Jenkins, McGee and Atwood illegally distributed Gold-Quest International securities in Alberta and that Gold-Quest International and Greene made misrepresentations to Alberta investors. The ASC panel found that Gold-Quest International raised approximately US$29 million from more than 2900 investors, including more than US$2 million from approximately 400 Alberta investors.

In ordering sanctions, the ASC panel noted that the Gold-Quest International investment scheme as a whole constituted "an egregious flouting of Alberta securities laws". It also noted that the Gold-Quest International investment scheme was "a sham investment scheme, a classic Ponzi scheme and a classic pyramid scheme."

A copy of the decision is available on the ASC website at www.albertasecurities.com.

The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital.

For further information: For Media Inquiries: Mark Dickey, Senior Communications Advisor, [phone]; For Investor Inquiries: ASC Public Inquiries, Toll Free 1.877.355.4488