An attorney for the Natural Gas Supply Association (NGSA)revealed Friday that the civil investigation into the allegedembezzlement activities of the group’s ousted president, NicholasJ. Bush, has spread to Canada.

During a status conference, Eugene M. Propper of the law firm ofHolland & Knight told D.C. Superior Court Judge Jose M. Lopezhe had been trying to serve party/parties in Canada in connectionwith the civil lawsuit filed by NGSA last February, which accusedBush of stealing more than $2.4 million from the producer groupsince 1987. He declined to identify the Canadian party/parties whenquestioned by reporters following the hearing.

A source confirmed that there was an on-going investigation inCanada related to the case. The NGSA “has moved in that direction,”he said, adding there was a “high possibility” of a “tangentialrelationship” between Bush and the Canadian party/parties. He saidhe was unable to say whether the parties were individuals orcompanies, or whether they were part of the natural gas industry.

The Canadian angle came to light during NGSA’s three-month probeof Bush’s alleged fraud and embezzlement activities, which wereuncovered in January. The group is “following the money to seewhere the trail leads,” and is looking at “anyone within thecircle” of Bush’s colleagues, friends and family, the source said.

John Sharp, who has been handling NGSA’s day-to-day affairssince Bush’s departure, declined to comment on the Canadianinvestigation.

At the conference, Propper reported the both sides werecontinuing “to talk to try to think of a way to settle” thelawsuit. But Judge Lopez expressed dissatisfaction with the slowprogress of the negotiations. “You keep talking” about asettlement, “but talking is not enough,” he told Propper andWilliam J. Murphy, a Baltimore attorney representing Bush.

Lopez issued a “standard” scheduling order, which spelled outthe deadlines that both sides have to meet (for discovery and otheractions) and essentially put the case on track for trial. A trialdate has not been set yet.

The lawsuit accuses Bush of setting up bogus consultingcontracts during his tenure as NGSA president and diverting themoney that was paid to the phony consultants for his own use. Thefunds – only a fraction of which have been traced so far -primarily went to acquire Bush’s house in the Palisades section ofWashington, make mortgage payments, and pay off credit card andutility bills, according to the NGSA suit. The NGSA is seekingreimbursement of the missing $2.4 million and punitive damages of$5 million.

Until the case is resolved, the court has ordered several ofBush’s assets in the District of Columbia to be attached. His twohouses- in the Palisades section and the posh McLean, VA, area -are in the process of being sold, sources say.

In the meantime, the U.S. Attorney’s office in Washington D.C.is continuing its investigation into possible criminal chargesagainst Bush. Sources now predict that charges will be forthcomingwithin a month. “That’s probably not too far out of the realm,”said Channing Phillips, spokesman for the attorney’s office.

Criminal charges would likely stem from allegations that Bushcreated phony bank accounts and mailing addresses, and misused taxinformation and individuals’ social security numbers as part of thealleged fraud scheme. An investigation by the Internal RevenueService of Bush’s activities also is likely to occur, many believe.

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