tcirevealed.com

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This article appeared in the Kitchener newspaper.

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Local investor joins 750M class action
BRIAN WHITWHAM

(Jan 28, 2006)
After putting money into an online investment club six years ago, Heidelberg's Ray Goulet has joined hundreds of people across southern Ontario in a lawsuit against two men alleged to be the club's managers.
The class-action suit against TCI Investment Club is seeking 765 million US: 15 million for the initial investment and 750 million in interest.
None of the allegations have been proven in court and the suit still needs to be certified by a judge to move forward.
A statement of claim, filed in a London, Ont., court in November, alleges that William Rath of Uniondale and Ross Alexander of London controlled TCI Investment Club. It also names Charles Gordon -- believed to be a pseudonym -- who was named on all e-mails and letters as "TCI manager."
A statement of defence filed last week on behalf of Rath and Alexander refutes the allegations, saying they have never controlled the club or its finances. It said the two men are merely investors in the same club and are also owed money.
Goulet, 53, said he put 25,000 into the club in May 1999, based on suggestions he could see returns of 10 to 12 per cent per month. After joining, he was able track his investment's growth on a club website.
"And it never lost," Goulet said. "It always earned."
Goulet said he knows other local investors who put as much as 500,000 into the club but, like him, they haven't been able to withdraw any of the money.
In a telephone interview from London, Ont., defendant Alexander said: "There are always two sides to every story.
"To comment on it other than that is inappropriate," he added. "It's in the hands of the attorneys."
Rath couldn't be reached for comment.
David Kirwin, a London lawyer handling the class-action lawsuit for the club's members, said there are more than 200 people behind the suit so far. As many as 5,000 across Canada and the U.S. may have joined TCI Investment Club, he said.
"We're asking the people responsible for this club, who know where the money is, to account for it," Kirwin said.
"What happened to the million?"
The amount of money sought could increase if more club members come forward, Kirwin said.
Goulet said his investment appeared to increase quickly at first, in line with the high returns suggested. He said the growth slowed after the Sept. 11, 2001 terrorist attacks in the U.S. but, according to the website, his money still garnered interest of two to five per cent every month.
Goulet said that when he tried to make withdrawals, he received newsletters about a computer glitch or other challenge the club was facing.
"(The company) always came up with some excuse as to why the money wouldn't be paid," he said. "It's been excuse after excuse for six years."
The last time Goulet saw his balance, in May 2005, it had reached about 140,000. After that, he received monthly statements telling him what his investment had earned in interest, without providing a balance.
He said he hasn't been able to get an explanation from the club's managers.
"There's no access through the phone," Goulet said. "It's simply e-mail and even then, they won't respond to your e-mail."
The statement of claim says the e-mail correspondence originally came from sites in Canada. But it has been coming from a server in Israel since 2001.
John Doe is listed as a fourth defendant on the statement, to represent anyone else who controlled the money or knows where it is.
Kirwin said investors have been cautious about voicing their concerns, even to each other, because the club has a strict privacy rule.
"There are a lot of people who are hurting because of this," he said. "They have been looking for answers and they have been afraid to go public because of this rule about secrecy."
The lawsuit is asking for all of TCI's financial records to be provided to investors. If fraud is revealed, the suit will seek more than 100 million in damages, Kirwin said.
The TCI “marketer” who was instrumental in promoting and arranging for these investments in the Kitchener area Mr. Richard Hughes of Kitchener is an insurance salesman by profession. He indicated he has brought on board upwards of 75 people into the plan. Mr. Hughes makes claim to the fact that he is also just an investor and has no connections to the source of these potentially lost funds. He has made claim to the fact that he has withdrawn 100,000.00 from an oversees bank account and so he says the plan works. But yet no one else has been able to withdraw?

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