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No. Sf AY \ Vi Régistry MAY 23 2018 cp ancouver Régistry £ SUPREME COURT OF BRITISH COLUMBIA. Civil Forfeiture Action in Rem Against The Lands and Structures situated at #TH22 - 1281 Cordova Street West, Vancouver, British Columbia, and having a legal description of parcel identifier 026-130-581 Strata Lot 12 of the Public Harbour of Burrard Inlet New Westminster District Strata Plan BCS1073 together with an interest in the common property in proportion to the unit entitlement of the strata lot as shown on Form V (the “Real Property”), a 2017 Land Rover Range Rover with Vehicle Identification Number SALGW3FESHA3668 13, a 2018 Land Rover Range Rover with Vehicle Identification ‘Number SALWZ2SE3JA192099 (collectively, the “Vehicles”) and any funds notionally held by the Bank of Montreal, in particular account numbers 4642127 and 3716674, by Kevin Patrick Hobbs (the “Bank Funds”) and their fruits and proceeds Between Director of Civil Forfeiture Plaintift and ‘The Owners and all Others Interested in the Real Property, the Vehicles, and the Bank Funds, in Particular, Kevin Patrick Hobbs and Lisa Angela Cheng NOTICE OF APPLICATION f° Name of applicant: the plaintiff, Director of Civil Forfeiture Defendants TAKE NOTICE that an application will be made by the applicant, Director of Civil Forfeiture (the “Director”) to the presiding judge at the courthouse at 800 Smithe Street, in the City of Vancouver, in the Province of British Columbia, on May 30, 2019 at 10:00 a.m. for the order set out in Part 1 below. Part1: ORDERS SOUGHT 1. See attached Schedule “A” Part2: | FACTUAL BASIS 1, The Director has commenced an action under the Civil Forfeiture Act, SBC 2005, c. 29 the "CFA") seeking the forfeiture of the Real Property, Vel jes and Bank Funds as Proceeds of unlawful activities, namely possession of the proceeds of crime, committing fraud over (004729-0030/00273377 <= $5,000, affecting the public market price of stocks, shares, merchandise or anything that is offered for sale to the public, laundering the proceeds of crime, and failure to declare taxable income. Further, the Director seeks the forfeiture of the Real Property as an instrument of laundering the proceeds of crime.! The Investigation 2, In or about April 2018 the Federal Serious Organized Crime section of the Royal Canadian Mounted Police (the “FSOC”) received a tip from the British Columbia Securities Commission (the “BCSC”) concerning Vanbex Group Inc. (together with its related ‘companies, “Vanbex”). and its involvement in potential securities offences. In May 2018, FSOC commenced a fraud investigation targeting Mr. Hobbs, Ms. Cheng and Vanbex. As part of that investigation, FSOC coordinated with the Canada Revenue Agency to investigate criminal tax offences believed to be committed by the defendants and Vanbex. According to the primary investigator, the principals of Vanbex are believed to have diverted millions of dollars of corporate funds to their personal use, promoted the public market price of their own cryptocurrency assets, used the Real Property to launder the proceeds of their fraud, and failed to declare taxable income The criminal investigation is ongoing and currently no charges have been laid against either of the defendants. Cryptocurrency and Blockchain 6. In 2017 Vanbex published a promotional pamphlet (the “Whitepaper”) containing information about a computer program it purported to be developing. This program was to be a “Smart Contracts Platform” that would allow users to create customized smart contracts from a library of templates. A smart contract is a computer program designed to automatically enforce an agreement between parties under predetermined conditions. ' Amended Notice of Civil Claim. (004729-0030/00273377 a To purportedly fund the development of the Smart Contracts Platform Vanbex sold a crypt US$30,000,000 in cash and cryptocurrency (the “ICO Funds”). The FUEL Token was led the “FUEL Token” to the public in an “initial coin offering”, raising over purported to have utility in the forthcoming Smart Contracts Platform. Its not disputed that Vanbex did not develop the Smart Contracts Platform advertised in the Whitepaper. Rather, Vanbex launched a computer program called “Rocket” which was far narrower in scope. Rocket only allows a user to launch an initial coin offering of their own. As of May 10, 2019 Vanbex confirmed that Rocket remains in testing. Moreover, the initial amount Vanbex charged customers to use Rocket was $49,800 USD. Although one could pay to use Rocket with FUEL Tokens, around the time this was announced to do so would have required approximately 1.67 million FUEL Tokens. ‘The Unlawful Activity 10. ML 12. ‘The ICO occurred from September to October 2017, and was made up of two stages: a pre- sale similar to a private placement of shares, and a public crowd sale similar to an initial public offering of shares. Purchasers of FUEL Tokens paid in either cryptocurrency or national currencies during the pre-sale, but strictly paid in eryptocurrency during the public crowd sale. In the period immediately after, specifically from October 2017 to December 2017, Mr. Hobbs and Etherparty Inc. both received wire transfers worth millions from the same cryptocurrency broker. The inference is that Mr. Hobbs diverted a portion of the ICO Funds to his personal accounts. Mr. Hobbs and Ms. Cheng used these diverted funds to acquire sudden and substantial personal wealth including the Real Property, the Vehicles, and the Bank Funds: a. On December 8, 2017, Mr. Hobbs and Ms. Cheng purchased the Real Property for $4,100,000 in cash; (004729-003000073377