Ousted Canadian financier hopes to suppress his own damaging testimony

David Sharpe, the former head of the Canadian company that bankrolled the Alaska to Alberta railroad project, claims a transcript of an interrogation in which he made damaging admissions should never have been made public.

The release of the full transcript caused “irreparable prejudice to Sharpe, his reputation, his privacy interests, his expectation of confidentiality and his ability to defend any future proceedings,” his lawyers said in a July 7 filing with the Ontario Securities Commission.

Sharpe is trying to get the investigation of Bridging Finance stopped.

Sharpe, the former CEO of Bridging Finance, loaned upwards of $180 million in Canadian dollars to Sean McCoshen, the owner of the proposed Alberta to Alaska railroad project that has been the darling of Alaska political and business leaders, including the Congressional delegation, Gov. Mike Dunleavy and former Lt. Gov. Mead Treadwell.

Dunleavy has been hyping the project as the next big thing for two years. “The word is that the Canadians and others are just about there with the investments,” Dunleavy said in September 2019.

It turns out that the investments consisted of borrowed money supplied by Bridging Finance, a company that was forced into receivership this spring. Sharpe was fired.

After a two-month news blackout, Alaska Public Media and KUAC became the first Alaska news organizations to cover the debacle. But the report Wednesday did not deal with the financial scandal in Canada or the extent to which Alaska political leaders have been duped.

The biggest loans made by Bridging Finance under Sharpe’s leadership were to McCoshen and the so-called A2A railroad project, which has derailed.

The A2A website has been revised to remove McCoshen’s name from a prominent spot, but it still includes the claim that he has spent more than $100 million in U.S. dollars of his own money on the project. That doesn’t appear to be true.

The Ontario Securities Commission alleged that during the same period in which Sharpe’s company, Bridging Finance, loaned more than $100 million to McCoshen, Sharpe got back about “$19.5 million in undisclosed payments into his personal checking account” from a company controlled by McCoshen.

It’s easy to understand why Sharpe wants all of this to go away, especially the statements he made during the April 29 interrogation.

At first, Sharpe denied getting any money from McCoshen.

“Just to confirm, you have never received any money from Sean McCoshen or a company affiliated or controlled directly or indirectly by him? Is that correct,” forensic accountant Daniel Tourangeau asked.

“Yes, to the best of my knowledge,” Sharpe replied.

Tourangeau said Sharpe’s personal checking account showed deposits of $19.5 million from one of McCoshen’s companies.

“Do you want to explain to me why those payments were not disclosed and what they relate to?”

Sharpe asked for a break. “Are you denying that you received over $19 million from Mr. McCoshen?”

“No, I’m saying I’ll have to look at it,” he said.

After a 12-minute break, Sharpe changed his story. “So I’ve had some personal financial dealings with Sean McCoshen and in the way of loans from him,” he said.

“And why did you not disclose this to staff previously?”

“I honestly didn’t think it was applicable,” said Sharpe.

Sharpe said he “probably” had a loan agreement on the $19.5 million, but he was unable to find it.

Under questioning, he said McCoshen loaned him $19.5 million so Sharpe could make investments.

“And why is he willing to lend you $19.5 million to make personal investments?”

“Just based on our relationship,” Sharpe said.

“OK. So Mr. Sharpe, I just want to put it squarely to you. Are these kickbacks that Mr. McCoshen is paying you in connection with extending loans to his companies?”, Carlo Rossi, a commission staff member, asked Sharpe.

“No, they’re not,” said Sharpe.

Within five days of getting loans from Bridging Finance, McCoshen transferred millions to Sharpe’s personal account. “Can you explain that?” Carlo Rossi, staff of the Ontario Securities Commission asked Sharpe.

“It certainly does not look good,” Sharpe said. “That’s for sure. I wouldn’t characterize them as kickbacks, but Sean McCoshen is a person that has a lot of money and does well, so it may be one and the same monies, but I have no evidence of that.”

Sharpe said he had not disclosed the loan to anyone at Bridging Finance, including his wife, who worked with him. He said it was “arguable” as to whether it was his duty to disclose the $19.5 million loan from McCoshen to investors in Bridging Finance.

Tourangeau then turned the discussion to McCoshen’s net worth statement, which listed a study showing the yet-to-be-built railroad as a $4 billion asset.

If you take the nonexistent $4 billion off of McCoshen’s list of assets, “we are roughly at $100 million,” which is in close to what he was loaned by Bridging, said forensic account Daniel Tourangeau. An analysis said his net worth was a negative $96 million.

He went on to ask Sharpe if he knew whether McCoshen took $19.5 million out of the $100 million loaned to McCoshen by Bridging Finance and returned it to Sharpe’s account.

“I’m not trying to put words in your mouth but is it fair to say you took no steps to verify that the funds Mr. McCoshen was paying you did not originate from the BFI (Bridging Finance) funds?”

“I wouldn’t say no steps. He has a lot of very wealthy friends who are billionaires that he does business with, so I wouldn’t say no steps, but certainly asked the question.”

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