Investment Fraud

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A bankruptcy discharge releases the debtor from pre-bankruptcy debts or liabilities. The purpose is to give the debtor a “fresh start” from excessive debts that cannot be repaid, except in certain situations such as where the debt arises from deceitful or fraudulent conduct. In Poonian v. British Columbia (Securities Commission), the British Columbia Court of Appeal held that securities sanctions are excluded from bankruptcy discharge. This is significant because this decision diverges from other Canadian appellate decisions.
Continue Reading Securities Sanctions Survive Bankruptcy, British Columbia Court of Appeal Rules

David Holden was recently convicted of defrauding Canadian investors in Seaquest Corporation and Seaquest Capital Corporation of more than $54-million in a complex ponzi-scheme. In related civil proceedings our team acted to obtain significant recoveries for some of Holden’s victims. Sadly, this was not the first time that Holden had defrauded investors.
Continue Reading Ponzi Mastermind Sentenced to 12 Years – $54 Million Payment Ordered

On November 15, 2018, the Supreme Court of Canada granted Christine DeJong Medicine Professional Corporation’s (“DeJong”) application for leave to appeal from the decision in DBDC Spadina Ltd. v. Walton, 2018 ONCA 60. By granting leave, Canada’s highest court will weigh in on the liability of “victims” of fraud as against one another.
Continue Reading Supreme Court to Rule on Conflicting Rights of Investors in Fraudulent Schemes

Two recent decisions of the Ontario Superior Court demonstrate the willingness of Canadian judges to find fraud on the basis of material omissions in both civil and criminal cases. In Midland Resources Holding Limited v. Shtaif, 2017 ONCA 320, 135 O.R. (3d) 481 and R. v. Fontana, 2016 ONSC 707,  omissions by the defendants were found to constitute fraudulent conduct.

Civil Fraud: Midland Resources Holding Limited v. Shtaif

In Midland Resources Holding Limited v. Shtaif, the Ontario Court of Appeal confirmed that the tort of deceit or fraudulent misrepresentation may:

 involve not only an overt statement of fact, but also certain kinds of silence: the half-truth or representation that is practically false, not because of what is said, but because of what is left unsaid.

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Continue Reading Fraud by Omission: Ontario Case Law Updates

On May 26, 2016, the British Columbia Provincial Court dismissed Rashida Samji’s request for a stay of criminal fraud charges in R v. Samji.  The British Columbia Securities Commission had previously levied an Administrative Monetary Penalty (“AMP”) of $33 million against Samji, in relation to what the British Columbia Securities Commission found was a $100 million Ponzi scheme perpetrated by Samji between 2003 and January 2012. Samji had earned the nickname the “Magic Lady” for the large profits she claimed to generate for clients. Samji argued that the AMP was essentially a criminal penalty and the stigma that she has suffered as a result of media coverage amounted to criminal punishment. In light of the AMP, she argued that the Charter prevented double prosecution under both the Securities Act and Criminal Code.
Continue Reading “Magic Lady” fails in Constitutional Challenge

In a previous post, we reported on a then-ongoing Calgary trial involving an alleged $300 million Ponzi scheme affecting as many as 2,000 people, many of them Canadian.  The fraud represents one of the largest Ponzi schemes in Canadian history.  The accused individuals had already been sanctioned by the U.S. Securities and Exchange Commission and the Alberta Securities Commission.
Continue Reading Guilty verdicts delivered in one of Canada’s largest ponzi schemes

A Calgary trial is nearing conclusion on criminal charges against Gary Allen Sorenson (“Sorenson”) and Milowe Brost (“Brost”) relating to an alleged $300 million Ponzi scheme that operated between 1999 to 2008 with money from thousands of investors across the United States and Canada. The alleged scheme was orchestrated utilizing the sale of promissory notes issued by Syndicated Gold Depository, Inc. (“SGD”), an entity formed in 1999 by Sorenson and Brost. The two men were arrested in 2009 for what police called “the largest Ponzi-type scheme” in Canadian history.

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Continue Reading Final Arguments nearing end in trial of one the largest alleged Ponzi schemes in Canadian history