BAINES: ACADEMY OFFICIALS REPAID MONEY

Kenneth Eng of Burnaby has quit as director of finance and operations for the North Shore Disability Resource Centre Association after being banished as a certified general accountant.

“He submitted his resignation and we accepted it,” Liz Barnett, the resource centre’s executive director, said in an interview Thursday.

Eng offered his resignation after I reported that the CGA Association of B. C. had expelled him for misappropriating money while working as business manager for the Fraser Academy, a school for children with dyslexia and other language- related disabilities.

The CGA association said that, from January 2003 to August 2006, Eng charged $ 80,000 in personal expenses to the school’s credit card, then approved expense reports for him and “his boss,” who was also improperly using the credit cards.

His boss was not named, but is known to be Eleanor Nesling, who served as Fraser Academy’s “head of school” at the time.

As I reported Wednesday, the school dismissed Nesling and Eng in 2006 and filed a lawsuit accusing them of conspiring to use the school’s credit card for personal purposes.

The pair denied any wrongdoing and the matter was eventually settled out of court. The school never indicated in its lawsuit how much money was allegedly misappropriated, and the terms of the settlement were never disclosed in court files.

Since my column Wednesday, I have learned that the amount of money diverted from the Fraser Academy may have been far more than the $ 80,000 reported by the CGA association.

In September 2007, the school issued a release announcing that, as a result of its settlement with Eng and Nesling, it had recovered $ 250,000. The release indicates that Nesling’s only failing was to trust Eng.

Asked whether the resource centre, which provides services for disabled people and their families, knew about Eng’s problems before hiring him, Barnett replied, “No, we didn’t. We were very surprised by that.”

She said that, although no financial discrepancies have come to light, the resource centre will conduct a forensic audit this year, in addition to its usual audit.

• In December, I reported that Ladysmith insurance agent Roberta Mayer had called me a “dingbat” for criticizing a charitable donation tax- shelter scheme that is being promoted at seminars in Vancouver, Victoria and elsewhere in Canada.

The scheme, called the VIA Project, enables investors to borrow money to purchase an interest in a collection of archival photographs, then donate those photographs to charity and generate a tax credit equal to 43.7 per cent of the purchase price.

It was not clear to me whether this is a bona fide investment opportunity, or simply a device to create artificial values for the photographs and inflated tax receipts for investors.

I reported that Mayer was one of a half dozen sales reps who attended the VIA sales seminar in Victoria. I have also learned she was heavily involved in Dexior Financial Inc.

Dexior was run by Mo Jiwani of Toronto, a self- described “wealth enhancement expert,” and Gerard Darmon, a former Alberta securities offender. People who attended their seminars were encouraged to invest in Dexior, which, in turn, invested in an eclectic array of businesses.

Dexior bragged about its ability to provide “consistent and predictable rates of return.” Investors were promised 12 per cent per year. People who invested more than $ 1 million would earn 15 per cent.

In all, investors sunk more than $ 20 million into Dexior, but the company went bankrupt in early 2008. The bankruptcy trustee, Mike Cheevers of Wolrige Mahon LLP, says investors will lose nearly all their money.

According to documents I received this week, Mayer worked as Dexior’s “senior private client manager.” Among her clients was Richard Innes, who invested $ 75,000 in a real estate development that Dexior was promoting on Bowen Island. At the time, he was in his 80s.

Asked whether Mayer recommended he invest in Dexior, he replied: “Oh yes, she said it was a good investment.”

He said she even drove him from Nanaimo to Saltspring Island to show him a similar development that Dexior was promoting there.

Court files show that Innes filed a statement of claim against Dexior and Mayer in October 2007. Innes, who is now 89, could not remember the details of the lawsuit, other than it didn’t go anywhere.

Mayer insists she did not “sell” investments in Dexior to anybody, rather she “offered” them, which is a fine legal distinction. And even though Dexior is bankrupt, she still contends it was a “viable” business.

Cheevers has quite a different view. He says all Dexior’s investments were “ill- conceived” and none generated any profits. He says any interest paid to investors — which Dexior characterized as dividends — was simply a return of investors’ capital.

“My mistake is that I trusted Roberta too much [ with respect to this investment],” Innes says. “I gave her a little more leeway than I should have.”

I think the message is clear: the Insurance Council of B. C. should take whatever steps are necessary to stop licensed agents such as Mayer from selling ( or even “offering”) dubious, high- risk, illiquid investments like Dexior to elderly people like Innes.