Man countersues securities regulator, taxman, province
A Port Coquitlam businessman who was fined nearly a decade ago by the B.C. Securities Commission has launched a $480-million civil claim for damages against the commission and others, including the Canada Revenue Agency.
Michael James Savage’s suit is a counter-claim responding to a BCSC action filed in B.C. Supreme Court in late November 2017 to enforce payment of a $100,000 fine. That fine was issued to Savage by the BCSC in February 2008 for misrepresenting a telecom investment and committing fraud.
The BCSC filed the latest court action following a Postmedia News investigation that found more than 80 fraudsters who have harmed thousands of investors had not paid the largest penalties issued by the securities commission.
From fiscal 2007-08 to 2016-17, the B.C. Securities Commission had collected less than two per cent of $510 million in fines and orders to pay back the proceeds of fraudulent activities, the investigation found.
Savage is among those who have not paid his fine.
He filed the countersuit on Jan. 19 on his own.
Savage’s expansive 43-page counter-claim alleges a “miscarriage of justice” as a result of wrongful conviction and defamatory statements that includes malicious prosecution, abuse of process, negligence, failure to disclose evidence, and breaches of his constitutional rights.
None of the claims have been proven in court, and none of the parties, including the BCSC, have responded in court to the claims.
In a written statement, BCSC spokeswoman Alison Walker said the commission would respond in court.
The action filed in November against Savage was to extend the judgment to pay the $100,000 penalty, said Walker. The BCSC had 10 years to enforce the original order, a deadline that would have ended in January.
In a written response to questions from Postmedia, Savage said he had not filed the counter-claim to delay paying his fine. “I am entitled like all Canadians to due process,” said Savage.
As well as the BCSC and the Canada Revenue Agency, the suit names several BCSC officials, the province of British Columbia, a law firm and several of its lawyers, who once worked for Savage, and the Law Society of B.C.
In late 2007, a BCSC tribunal found that Savage had sold securities of Savage Tele.com when he was not registered to do so and without a prospectus (a detailed legal document laying out the company’s business). He also told investors the company existed when he knew its incorporation had been delayed, and that the company had purchased two of a planned 24 internet service providers knowing it had not done so, the tribunal found.
When some investors asked for refunds and threatened to sue, Savage transferred money from a company account and made some of it available to his fiancée.
Savage challenged the decision in 2008, seeking leave for an appeal at the B.C. Court of Appeal, which rejected his application.
In 2010, Savage pleaded guilty to tax evasion in Ontario and was fined $40,000, 88 per cent of the federal income taxes he evaded.
A Canada Revenue Agency investigation revealed that Savage used $163,544 transferred from Savage Tele.com to pay for personal expenses and had not reported the income.