Agency takes steps to collect from financial fraudsters
Collection orders filed with court and other enforcement orders renewed
The B.C. Securities Commission has taken preliminary steps to seize the property and goods of financial fraudsters who owe nearly $70 million in unpaid penalties from the past decade.
At least 10 collection orders — called writs of seizure and sale — were filed in B.C. Supreme Court immediately after a Postmedia investigation, published in midNovember 2017, reported that the Securities Commission had collected less than two per cent of $510 million in penalties in the past decade.
The commission appears to have taken other preliminary steps after publication of the investigation to enforce payment from fraudsters owing another nearly $40 million in penalties.
Those filings in B.C. Supreme Court include renewing three enforcement orders to extend a 10year deadline to collect payment and registering a case in an effort to sue in another jurisdiction.
A writ of seizure and sale must be filed in court, followed by a request for a privately owned but government-authorized court bailiffs company to seize property and items such as cars, boats and jewelry to pay penalties. The items are sold at auction or through a tender process to produce cash.
The B.C. Securities Commission declined an interview on its recent actions. In a written response to questions from Postmedia, the commission declined to say if any of the writs of seizure and sale had been executed by bailiffs.
The commission also declined to say whether it had recently executed any other writs and seizures other than the 10 Postmedia found.
The commission also would not answer a question on whether its recent actions were a response to the Postmedia investigation findings or instructions by the B.C. government to improve collections.
In the written statement, commission spokeswoman Alison Walker said these actions are being taken because the Securities Commission pursues “all costeffective avenues to collect outstanding sanctions and has done so for many years.”
The B.C. Ministry of Finance, whose minister, Carole James, denounced the commission’s poor penalty collection record following the Postmedia investigation and told the commission to make improvements, declined to comment on the latest steps to enforce collections. The increased activity, however, appears to be unusual.
A Postmedia review of court records of more than 80 fraudsters who had been issued the BCSC’s steepest fines in the past decade shows only a handful of garnishment orders and a writ of seizure on one fraudster, Surrey resident Dianne Sharon Rosiek.
The 57-year-old Rosiek and three others — including mastermind Hal (Mick) McLeod, now known as Michael Smith — were ordered in 2009 to pay $26 million in fines and pay back $16 million in proceeds of a Ponzi scheme that collapsed in 2007.
There is no indication whether the seizure effort in 2010 against Rosiek was successful.
Another writ of seizure was issued for Rosiek on Dec. 21, 2017. Attached as support material for the seizure and sale effort was a B.C. Personal Property Registry file, which registers loans on items such as vehicles or boats, and shows Rosiek owns a 2014 Mercedes-Benz C350, a fact first reported in the Postmedia investigation in November.
Rosiek now owes $27 million, up from $22 million because of interest on her penalties, according to court filings.
Contacted by phone by Postmedia, Rosiek immediately hung up.
The writs of seizure and sale also named several people involved in another Ponzi scheme: Surrey resident Thomas Arthur Williams, West Kelowna resident Susan Grace Nemeth, Surrey resident Renee Michelle Penko, Kelowna resident Irene G. Beilstein, and the Global Wealth group of companies.
Williams was the mastermind of a Ponzi scheme between February 2007 and April 2010 that duped about 123 people of $11.7 million, according to the findings of a commission tribunal in 2016.
Nemeth, Penko and Beilstein were among a number of finders who drew investors to the scheme, according to the tribunal decision.
None have paid any of the steep penalties issued by the Securities Commission. Williams owes more than $22 million in penalties and interest, Nemeth more than $240,000, Penko nearly $202,000 and Beilstein nearly $49,000, according to court filings.
Williams did not respond to messages left at his home phone and has declined in the past to respond to Postmedia questions. Nemeth, reached by phone in Kelowna, also declined to comment.
The commission also filed writs of sale and seizure for four people involved in a pump-and-dump scheme, in which the price of a stock is artificially inflated and then sold by the perpetrators.
Those are husband and wife Thalbinder Singh Poonian and Shailu Sharon Poonian from Surrey and husband and wife Manjit Singh Sihota and Perminder Sihota from Vancouver.
The scheme obtained about $7 million by selling shares of OSE Corp., a small oil and gas exploration company, to unsuspecting buyers, a commission tribunal found.
Collectively, the Poonians and Sihotas owe Securities Commission penalties and interest of more than $19 million.
Whether the Securities Commission will be able to collect on these writs of seizure and sale is unclear, as often fraudsters ensure that property and other valuable assets are in others’ names.
For example, the Williams’ family home, valued at $774,000, lists the owners as Tom’s wife Lori and his father-in-law, Gordon Max Kenyon, according to B.C. Assessment documents.
In West Kelowna, Nemeth is the co-owner of a home valued at $754,000, according to B.C. Assessment.
Vancouver lawyer Kent Wiebe noted that successfully executing a writ of seizure and sale involves a number of steps, including assessing what kind of assets could be seized.
And even if there is property or goods that could be seized, you would need to also determine if there is enough potential money to be realized from those assets that it’s worth executing the seizure, said Wiebe, a founding partner at Wiebe Wittmann El-Khatib LLP.
There are costs to seizures, including the cost of the seizure itself and the sale of goods, and payment to the bailiffs, explained Wiebe, who recently wrote a brief on the process for seizure and sale for the Continuing Legal Education Society of B.C.
“Unless the writ of seizure is actually executed, it’s just another piece of paper,” said Wiebe.
The case registered in preparation to sue in another jurisdiction involves Michael Patrick Lathigee and Earle Douglas Pasquill, each slapped with $15 million in fines for fraudulently raising $21.7 million in 2008 from nearly 700 investors.
Lathigee now lives in Las Vegas, where he is listed as the owner of a home valued at US$543,069 ( just more than $665,000 in Canadian dollars), according to Clark County Assessor records.
The cases where the commission has renewed enforcement orders include three men involved in a Ponzi schemed that bilked 89 investors of about $13 million between 2004 and 2006, according to a BCSC tribunal decision. Those are Abbotsford residents Malcolm Cameron Boyd Stevenson and Daniel Eric Byer, and Preston Pinkett II, a resident of Virginia. Collectively, the trio owes $16.7 million in penalties.
Byer has filed a counter claim for damages, arguing that the commission claim is invalid “for a lack of jurisdiction.”
The Securities Commission also renewed a claim on fraudster Ian Thow, who has an outstanding fine of $250,000, according to court filings. The former mutual fund salesperson bilked 29 investors of $6 million between 2003 and 2005 for investments that never existed, a tribunal found.
The B.C. Securities Commission would not say whether there were more enforcement renewals to extend the 10-year deadline or whether they had taken this step in the past.
Unless the writ of seizure is actually executed, it’s just another piece of paper. KENT WIEBE, lawyer