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NGSA Fraud Probe Uncovers 'Canadian' Connection

NGSA Fraud Probe Uncovers 'Canadian' Connection

An attorney for the Natural Gas Supply Association (NGSA) revealed Friday that the civil investigation into the alleged embezzlement activities of the group's ousted president, Nicholas J. Bush, has spread to Canada.

During a status conference, Eugene M. Propper of the law firm of Holland & Knight told D.C. Superior Court Judge Jose M. Lopez he had been trying to serve party/parties in Canada in connection with the civil lawsuit filed by NGSA last February, which accused Bush of stealing more than $2.4 million from the producer group since 1987. He declined to identify the Canadian party/parties when questioned by reporters following the hearing.

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

The Canadian angle came to light during NGSA's three-month probe of Bush's alleged fraud and embezzlement activities, which were uncovered in January. The group is "following the money to see where the trail leads," and is looking at "anyone within the circle" of Bush's colleagues, friends and family, the source said.

John Sharp, who has been handling NGSA's day-to-day affairs since Bush's departure, declined to comment on the Canadian investigation.

At the conference, Propper reported the both sides were continuing "to talk to try to think of a way to settle" the lawsuit. But Judge Lopez expressed dissatisfaction with the slow progress of the negotiations. "You keep talking" about a settlement, "but talking is not enough," he told Propper and William J. Murphy, a Baltimore attorney representing Bush.

Lopez issued a "standard" scheduling order, which spelled out the deadlines that both sides have to meet (for discovery and other actions) and essentially put the case on track for trial. A trial date has not been set yet.

The lawsuit accuses Bush of setting up bogus consulting contracts during his tenure as NGSA president and diverting the money that was paid to the phony consultants for his own use. The funds - only a fraction of which have been traced so far - primarily went to acquire Bush's house in the Palisades section of Washington, make mortgage payments, and pay off credit card and utility bills, according to the NGSA suit. The NGSA is seeking reimbursement of the missing $2.4 million and punitive damages of $5 million.

Until the case is resolved, the court has ordered several of Bush's assets in the District of Columbia to be attached. His two houses - 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 charges against Bush. Sources now predict that charges will be forthcoming within 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 Bush created phony bank accounts and mailing addresses, and misused tax information and individuals' social security numbers as part of the alleged fraud scheme. An investigation by the Internal Revenue Service of Bush's activities also is likely to occur, many believe.

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