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TV. Brilliant. Well,

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you, yeah, you, you were different.

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And so much more. Listen

1:04

and subscribe wherever you get your

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podcasts. First,

1:12

a warning. The following

1:15

episode contains difficult subject matter,

1:18

including references to suicide

1:20

and death. One

1:23

of the strange things about the

1:25

Brix story is the amount of

1:27

heartache that it caused to so

1:29

many different people. There

1:32

were times where I thought there was some

1:34

kind of Brix curse. I

1:37

don't believe in the

1:40

boogeyman and I don't believe in curses as

1:42

a general matter. But there's

1:44

something about Brix that's hard to

1:46

explain other than hellfire

1:49

and damnation. I

1:55

also don't believe in the boogeyman

1:57

or curses, but the number of

1:59

Brix Brex execs, lawyers,

2:02

expert witnesses, investigators,

2:05

and even journalists who've worked on

2:07

this story and had tragedy befall

2:09

them during or shortly after is

2:12

quite unbelievable. I

2:15

can think of four people I personally

2:17

know who either lost their

2:19

lives or experienced some

2:22

kind of unrelated tragedy following

2:24

their involvement with Brex. Like

2:28

the investors. We

2:31

lost everything. My husband was sick

2:33

for four years. We

2:36

worked hard for our money. We

2:38

probably would have had that extra money to

2:42

pursue more medical help.

2:45

There's stories all around here in Alberta and

2:48

all around Canada of people taking their lives. They

2:50

were just so confident that it wasn't a scam.

2:53

This was their lottery ticket for life. The

2:58

fallout from Brex ruined

3:00

many lives and inflicted unprecedented

3:02

damage on the mining industry

3:05

and financial markets in both

3:08

Indonesia and Canada. I'm

3:14

Suzanne Wilton from the BBC World

3:16

Service and CBC. This

3:19

is the $6 billion dollar gold scam.

3:23

A story about the lengths

3:25

people will go to in pursuit

3:27

of getting rich. This

3:32

is episode seven. Blame.

3:37

Graham Farquharson and Henrik

3:39

Thallenhorst's devastating report hit

3:42

Brex hard. John

3:44

Felderhoff, Brex's chief geologist, was fired

3:46

and the rest of the company

3:49

execs quit. In

3:52

May 1997, the Royal Canadian

3:54

Mounted Police began their investigation

3:57

into the scam. Brex

3:59

sought back. Nevertheless,

8:00

the investors would have their day

8:02

in court with the

8:05

last man standing, John

8:07

Felderhoff. I

8:14

knew that the case itself would

8:17

have real risks attached. A

8:20

national newspaper said that I had

8:22

become a pariah by agreeing to

8:24

represent John. After spending

8:26

10 days in the Cayman

8:28

Islands listening to Felderhoff tell his

8:30

side of the story, Joe

8:33

Groia, one of Canada's top

8:35

securities litigation lawyers, decided to

8:37

take on the case. I

8:40

had a couple of what I thought to be non-serious

8:45

death threats. The case centered

8:47

around the shares that John Felderhoff sold

8:49

in 1996 for $84 million. And

8:55

whether or not he knew things

8:57

about Brix at that time that

8:59

he should have disclosed to the

9:01

market. From his

9:03

home in the tax haven of the

9:05

Cayman Islands, Felderhoff put

9:07

in a plea of not guilty

9:10

to all eight charges.

9:13

At that time, John Felderhoff didn't

9:15

believe there had been a scam.

9:18

There was an interview that was given where John

9:21

talked about the possibility there could be

9:23

as much as 80 million ounces. And

9:25

that got picked up and got reported.

9:28

But that was never in an official press release.

9:31

It was said that he should have

9:33

known that the numbers they were reporting

9:35

were inaccurate. These

9:40

results were provided to Felderhoff

9:42

and Brix execs by Filipino

9:44

geologists under the management of

9:47

Michael De Guzman. The

9:49

core samples would be sent for testing. They

9:51

would get results and they would plug

9:54

them into a computer program called data

9:56

mining. future

9:59

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with promo code Visit acorn.tv for a 30-day free trial with promo code BBC24. BBC 24 didn't

14:01

know, he might have been

14:04

distracted by his vision

14:07

for helping those people. I'll

14:10

give him that potential,

14:13

although I still think he knew. Chief

14:19

Geologist is described

14:21

by the guys on site as a seagull

14:23

because he flies in, he

14:26

shits and everybody then he flies out again. I

14:29

know that because I was one once, not

14:32

a seagull, I was a chief geologist. I

14:35

suspect John didn't do quite enough shitting.

14:39

Roger Marjorie Banks also has

14:41

a theory. I think Fel

14:43

the Help was honest, but

14:46

I think he was blind to a huge

14:49

scam going on behind his back, perhaps because

14:51

of the size of it. Maybe

14:54

the key to it, just the

14:56

boldness, the sheer audacity of what was

14:58

being done and the

15:00

fact that people were a bit naive, a bit innocent

15:03

and it slips through the neck. On July

15:05

31st, 2007, six years after John

15:08

Felderhoff's trial began,

15:18

Judge Peter Rinn finally reached

15:20

his own conclusion. On

15:23

all charges, he found Felderhoff

15:26

not guilty. It

15:30

was devastating news for the people

15:32

who'd lost their relatives, life

15:34

savings and pensions in the Brix

15:36

scam. The judge said,

15:39

I'm satisfied on a balance

15:42

of probabilities that Felderhoff has

15:44

proven that he took all

15:46

reasonable care. In

15:49

other words, the judge was

15:51

saying that John Felderhoff was oblivious

15:53

to the salting scam that was

15:56

being perpetrated. It was

15:58

a triumph for his lawyer. but

22:00

it went to the warehouse first, and

22:02

I kind of think that's where they did the

22:04

salting. In the

22:07

previous episode, we heard how

22:09

Freeport geologist Andrew Neil had

22:11

spotted that the gold in

22:13

the Brix samples must have

22:15

come from a stream. This

22:18

was something Dave Potter and

22:20

Mansur Geiger were able to corroborate

22:22

for me. There

22:25

were local gold panners around. They

22:28

bought a bit of gold and they

22:30

worked out this very sophisticated system of

22:33

salting what we

22:35

call the salting of the core by adding

22:38

gold into their drill core.

22:41

They evidently bought alluvial

22:44

gold, and the reason they did it like

22:46

this, they bought alluvial gold from the rivers

22:48

around the site where they were at because

22:51

they wanted to make sure that the gold,

22:53

you can type gold, it's kind of like

22:55

a fingerprint, and they wanted

22:57

to make sure that the gold that they typed was

23:00

similar to the gold that was in that original

23:03

deposit. Alluvial gold

23:05

is the name for the type

23:07

of gold found in flowing water.

23:10

Although it would have some of

23:12

the same properties or fingerprint as

23:14

gold that might be found in

23:16

Bousang, the scratch marks

23:18

it gets from being dragged along

23:21

the riverbed are also a

23:23

giveaway that it couldn't have come

23:25

from the ground. Suzanne

23:30

Felderhoff had her own piece of the

23:32

jigsaw involving

23:34

Cesar Puspos, albeit

23:36

it was an account someone else

23:39

had given to her. There was

23:41

this witness who saw Puspos tampering

23:43

with these bags. He told

23:45

me that, that he saw that.

23:48

Well, he was there and they were

23:50

working in the jungle, and at some

23:53

point there's this river, I

23:56

think on the boat, they put these bags and

23:58

they're shipped off to the laboratory. in Samarinda

24:02

and just halfway that river

24:04

somewhere there was this shack

24:07

and the witness saw that Puspos

24:10

was sort of standing on his

24:13

backs with something what he described

24:15

as he had a pen in

24:17

his hand and made these clicking movements and

24:19

he saw that something was added to this

24:21

max that's what I was told and

24:24

he said what are you doing there and this

24:27

person then was

24:29

startled and stopped what he was doing.

24:34

It's a rule in mining that

24:36

at no point during a sample's

24:39

chain of custody should a

24:41

bag be opened or have anything

24:43

added. While

24:51

I was in Jakarta I met

24:54

with Brix's former finance manager Bernard

24:56

Leod. He says he

24:58

also witnessed Cesar Puspos opening

25:01

sample bags when he visited

25:03

the drill corps at night.

25:05

At the summer in the office I

25:07

saw actually a bunch of bags

25:10

containing samples and

25:13

they took me to other store

25:16

where they keep the drilling core.

25:18

It's a big warehouse

25:20

near the river. Were

25:23

the bags open or closed?

25:25

The sample bag. Oh I saw they are mixing

25:27

blah blah blah you know organizing

25:30

mixing the bag and blah blah blah in the

25:32

night during the day. When

25:39

asked by a journalist for the Wall Street

25:41

Journal in May 1997, Cesar

25:44

Puspos said the only reason he

25:47

opened the bags was to check

25:49

that none had been broken in

25:51

transit. He also stated that

25:54

he had no idea how the

25:56

samples were spiked. Brown.

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Additional sound design and audio mix

34:03

by Joel Cox. Executive

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editor Heather Kane-Darling. At

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CBC, Veronica Simmons and Willow

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Smith are senior producers. Chris

34:14

Oak is executive producer. Cecil

34:17

Fernandez is executive producer. And

34:20

Aarif Noorani is the director.

34:23

At the BBC World Service, Anne

34:26

Dixie is senior podcast producer.

34:28

And John Manel is the

34:30

podcast commissioning editor. Thanks

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for listening. Acorn

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