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Fraud probe launched as phone lines go down

RCMP commercial crimes investigators have seized computers and files from Pay Pop Inc. and its subsidiary, Delecom Communications Ltd. Lindsay

RCMP commercial crimes investigators have seized computers and files from Pay Pop Inc. and its subsidiary, Delecom Communications Ltd. Lindsay Kines Vancouver Sun The RCMP has launched a fraud investigation following the collapse of a Fraser Valley company that resold telephone lines to businesses.

Commercial crime investigators have searched three undisclosed Lower Mainland locations linked to Pay Pop Inc. and its subsidiary, Delecom Communications Ltd., of Aldergrove, RCMP said Saturday.

Delecom bought phone lines wholesale from Telus Communications and resold them to businesses. The lines began going down last week, leaving hundreds of companies thr-oughout the Lower Mainland without telephone service.

The RCMP said its investigation was prompted by "allegations of fraud, forgery and uttering of forged documents in relation to stock certificates obtained by the company." The force began gathering material Thursday, and by Friday had enough information to obtain search warrants.

A team of 14 investigators seized at least nine business computers and five boxes of files during the searches Friday.

There have been no arrests, and no charges have been laid to date, police said.

"Potentially, there are millions of dollars involved," RCMP media relations Corporal Grant Learned said Sunday. But he cautioned that investigators will be unable to accurately assess the size of the alleged fraud until they have a chance to go through materials seized in the searches.

The number of alleged victims is also unclear, Learned said.

"It could be fairly substantial because of the fact that you're talking about a publically traded stock," he said. "They won't know that until they start going into the hard drives and downloading that and doing their analysis. And that could take weeks in terms of being able to get a sense of how big [this is]."

Pay Pop Inc. began trading on the Bulletin Board, an over-the-counter U.S. market, in June, 1998. By Friday's close, the company's stock was trading at nine cents.

Learned said the RCMP announced its investigation at the "earliest opportunity" to inform the public before the market re-opens Monday morning.

Police have also notified regulators in Canada and the U.S., he said.

Delecom and Pay Pop officials could not be reached for comment Sunday.

Telus called in extra staff last week to begin restoring telephone service to former Delecom customers. Telus media relations manager Doug Strachan was unable to say Sunday how many people have been reconnected.

But Robert Poburko of solar shading manufacturer Sunproject Canada in Vancouver said that his company was still without telephone service Sunday. He said Telus initially told him that he would be reconnected Friday afternoon, but later revised that prediction.

"I don't even known when I'll have telephones yet," Poburko said. "Basically, we're cut off from all of our customers."

The company has notified some of its clients by fax and cellular telephones. "But we deal with a huge number of customers who maybe only phone us once or twice a year," Poburko said. "And for those people -- I mean, we would have to actually notify about 10,000 people ... to let them know that there's a different way of contacting us right now."

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-- Dee (T1Colt556@aol.com), February 14, 2000