Court dismisses appeal in huge Ponzi scheme
The B.C. Court of Appeal has dismissed a bid by former notary Rashida Samji to throw out her criminal conviction for fraud relating to a $110-million Ponzi scheme that resulted in a six-year sentence.
Samji launched her appeal on the basis that she should not face jail time when she has already been fined $33 million by the B.C. Securities Commission.
However, in a decision released earlier this month, the Court of Appeal ruled that while the commission had issued a substantial administrative penalty, it was not punitive. “It was a protective and preventive order designed to deter similar fraudulent conduct, not to denounce the appellant’s conduct or reflect her moral blameworthiness,” according to the appeal decision written by Justice Barbara Fisher and supported by Chief Justice Robert Bauman and Justice John Hunter.
The appeal court concluded that a stay under the Charter of Rights was not warranted either, as Samji had not answered to society at large for her conduct, and a stay “would likely cause the public to lose confidence in the integrity of the justice system.”
Samji was sentenced to six years in prison more than a year ago, but has been out on $100,000 bail pending the outcome of her appeal.
Samji’s case is a rare criminal conviction for investor fraud, according to a recent Postmedia investigation.
As few as eight police-investigated cases have landed fraudsters in jail in the past decade, according to a review of court records and news files.
In her criminal conviction, Samji, 64, was also ordered to pay restitution of more than $10 million to her victims.
She was convicted on 28 counts of fraud and theft.
The judge said aggravating factors included that the fraud exceeded millions, had the effect of potentially destabilizing capital markets, and involved a large number of victims, as many as 200.
The sentencing dealt with the impact on 14 investors who were defrauded out of $16 million from 2003 to 2012.
The scheme saw Samji solicit money that she told investors would be used as collateral to provide “letters of comfort” for Vancouver’s Mark Anthony Group so it could obtain financing for operations in South America and South Africa.
But Mark Anthony was unaware that it was being used in the scheme. Instead of paying investors up to 12 per cent per year in interest, Samji was paying them back using their own money. It is an example of a classic Ponzi scheme, named after Charles Ponzi, an American swindler who was arrested in 1920.
The fraud was discovered when Coast Capital Savings sent out an alert that one of its employees, who had links to Samji, was believed to be involved in a Ponzi scheme.
A TD Bank official did an analysis, confronted Samji and concluded she was operating a Ponzi scheme and then contacted the B.C. Securities Commission.