EX-CRIME HOT SPOT SOLD IN HARRISON

Man Acquitted Of Laundering Money Buys Restaurant, Marina

A Harrison Lake marina and restaurant at the centre of a cross-border
drug smuggling operation has been sold to a controversial businessman
who was arrested with former Vancouver lawyer and convicted
money-launderer Martin Chambers.

Jack Purdy and his Armac Investments Ltd. took official possession of
the Breakwater Restaurant and Marina, near the Village of Harrison Hot
Springs, on Oct. 11, according to property transfer records obtained
by The Vancouver Sun.

Purdy faced a series of U.S. money-laundering charges, along with
Chambers, after a joint FBI-RCMP investigation culminated in their
arrests in 2002.

Chambers was convicted and sentenced to 15 years in a U.S. jail, while
Purdy was acquitted by a jury on the money-laundering charges. He
later pleaded guilty to a financial reporting offence.

Purdy owns millions of dollars of resort properties on Vancouver
Island, in Hawaii, the Caribbean and in Italy, according to court documents.

He bought the Breakwater for $1.4 million after the previous owners
were foreclosed upon.

Purdy could not be reached for comment this week. His lawyer Gerry
Mazzei, whose office is listed in corporate records as the address of
Armac, said Purdy bought the property so he could develop it as he has
done with similar sites.

"I let him know that you were calling and he said, 'You can just tell
them I bought this at a court-ordered sale. I don't know the previous
owner. I am in this kind of business.' It is just business as usual
for him," Mazzei said.

"I expect he's got plans to revive it and make it operational."

He said Purdy lives primarily in Alberta now and was not aware of the
police investigation that focused on the restaurant and marina and
helicopter drug smuggling earlier this year.

That investigation led to the arrest last May of Daryl Giles
Desjardins, the last man to run the once-popular Breakwater restaurant.

Police said at the time that the restaurant, with its scenic lakeside
location, was a hot spot for organized crime groups ranging from
bikers to Asian and Indo-Canadian drug gangs. They said Desjardins, a
44-year-old with a penchant for fast, luxury cars, contracted out his
services to move large quantities of pot across the U.S. border.

Even before the land sale was official last Wednesday, Purdy had been
introducing himself to officials in both the village of Harrison Hot
Springs and the District of Kent. The Breakwater is in Kent, but
visitors to the scenic spot must go through the nearby village.

Harrison Mayor Leo Facio confirmed Thursday that Purdy attended a
Sept. 28 village community plan meeting with an associate.

"It was the end of the evening and he just sort of introduced
himself," Facio said of Purdy. "He just happened to mention he had
some interest in the Breakwater."

Facio said Purdy had some discussions with village planners, but the
mayor was not involved in those talks.

Larry Burk, Kent's director of development, said Purdy and two
associates also paid a visit in mid-September.

"He just gave us some of his ideas," Burk said, adding that nothing
has been formally proposed for the site. "They were just talking about
logistics."

The restaurant remains closed and there is no business currently
operating there, Burk said.

"There is not much that place does except give us some notoriety," he
said.

Desjardins, who parked his Bell JetRanger helicopter in a tin shed on
the site, pleaded guilty in August to two marijuana-trafficking
charges and to violating a weapons ban. He is now serving a 41/2-year
sentence.

He admitted in court to flying the chopper across the border and
landing near Loomis, in Washington state, with 155 kilograms of
marijuana worth $1.2 million stuffed into hockey bags.

When police searched Desjardins' house in nearby Popkum, they found
two sets of ballistic armour and eight firearms, including two
assault-style rifles and four handguns, some of which were loaded.
Police also found $21,000 in cash and a Glock handgun, with its serial
numbers removed, inside one of Desjardins' vehicles.

The sentencing judge said Desjardins was "the organizational
facilitator in a drug-distribution chain."

"This incident was a well-planned and carefully coordinated scheme
that involved a multitude of other individuals, both in Canada and the
United States, for the pickup, delivery and distribution of drugs. The
defendant was not a mere courier hired for the specific purpose of
delivering marijuana," Chilliwack Provincial Court Judge Brent Hoy
said. "The defendant was involved in a large-scale commercial
operation in the distribution of marijuana, with economic gain as the
driving force for his participation."

Desjardins also had been ordered by the U.S. District Court a year ago
to pay more than $5 million US for his role in a fraudulent scheme to
sell the stock of Pay Pop Inc., a now-defunct telecommunications
company that was based in B.C.

Desjardins, who acted as Pay Pop's president, worked with
controversial Vernon stock promoter Robert Zaba, in what the U.S.
Securities Exchange Commission alleged was a classic "pump-and-dump"
scheme that earned them millions as they put out false news releases
about the company's assets.

SEC documents also say Desjardins "even boasted that Pay Pop was his
own 'printing press' for money, while at the same time bartering Pay
Pop stock for several exotic cars and an ownership interest in a
thoroughbred racehorse."

During the Pay Pop probe, the RCMP said the company was linked to the
Hells Angels.

Property records show the Breakwater Restaurant was owned by the
Harrison Lake Marina Corp., which had run into financial trouble, and
that Desjardins had put in a bid to buy the restaurant before his
arrest, according to a court case filed against it.

Instead, a B.C. Supreme Court order dated June 28, 2006 approved the
sale of the site to Armac and its sole director, Purdy, with a closing
date of Aug. 30. Purdy's mortgage for the property was registered on
Sept. 29 with many of the same Calgary-based investors who were
previously involved.

"It is a public record and it is coming out of Calgary and they are
the people who foreclosed and they are providing the financing in the
present transaction," Mazzei said.

Purdy's latest land acquisition was made days after he and Armac were
sued by his former common-law spouse, Kim Galavan, in B.C. Supreme
Court.

Galavan's statement of claim, filed Sept. 18, alleges Purdy did not
live up to an agreement to compensate her for the contributions she
made to the acquiring, renovating and managing of several properties
in B.C., Hawaii, Italy and Anguilla in the Caribbean, during their
eight-year relationship.

The businesswoman says in the court papers that she helped preserve
Purdy's business interests while he was facing charges in the U.S. and
arranged for his bail and "provided US $50,000 from her bank account
for the initial legal fees."

The documents allege Purdy agreed to buy Galavan a house in May 2004,
but later reneged on a commitment to cover the cost of the renovations
and mortgage, as well as breached an agreement to compensate her for
her interest in several of Purdy's properties.

Purdy has yet to file a statement of defence in the suit.

Chambers, Purdy and three other B.C. men were drawn into an FBI-RCMP
money-laundering and stock sting operation codenamed Bermuda Short in
August 2002. Disguised as financial front men for a Colombian drug
cartel, undercover officers tried to induce them to launder hundreds
of thousands of dollars of cash, which they represented as the
proceeds of drug trafficking.

On Aug. 14 and 15, 2002, all five men were arrested on U.S. soil and
charged with money-laundering offences.

Two pleaded guilty and agreed to cooperate with federal prosecutors.
Chambers fought the charges against him, but was convicted on all five
counts by a Miami jury in the fall of 2003.

Purdy, a longtime stock promoter, pleaded not guilty and was forced to
stay in Miami wearing an electronic monitor until he was eventually
acquitted and returned to Vancouver.