Canadian Fraud Law

Canadian Fraud Law

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Investment Fraud

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Double Jeopardy Argument fails for the Magic Lady

Posted in Investment Fraud
Dubbed the ‘Magic Lady’ by the media for perpetrating a $100 million Ponzi scheme, Rashida Samji faced administrative proceeding brought by the BC Securities Commission (“Commission”) as well as criminal charges. The Commission found in 2014 that she perpetrated a fraud, imposing a disgorgement order of almost $11 million and a $33 million administrative monetary… Continue Reading

Fraud by Omission: Ontario Case Law Updates

Posted in Investment Fraud
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… Continue Reading

“Magic Lady” fails in Constitutional Challenge

Posted in Investment Fraud
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… Continue Reading

Guilty verdicts delivered in one of Canada’s largest ponzi schemes

Posted in Investment Fraud
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… Continue Reading

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

Posted in Investment Fraud
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… Continue Reading

Sino-Forest OSC hearing continues

Posted in Investment Fraud
The Ontario Securities Commission (“OSC”) has almost completed its case in the high-profile Sino-Forest Corporation (“SFC”) hearing that began on September 2, 2014.  SFC and certain of its former executives are alleged to have engaged in widespread fraud relating to its public financial disclosure.  Specific allegations involve the fabrication or overestimation of revenue and assets,… Continue Reading

‘Magic Lady’ ordered to pay $43 million for running Ponzi scheme in British Columbia

Posted in Investment Fraud
A panel of the British Columbia Securities Commission has imposed an administrative penalty of $33 million against Rashida Samji for committing a $100 million fraud on at least 200 investors in its recent sanction decision. The scheme which the panel determined was a Ponzi scheme earned her the nickname the ‘magic lady’. The panel also… Continue Reading

Sino-Forest OSC hearing opens

Posted in Fraud Recovery, Investment Fraud
On September 2, 2014, the Ontario Securities Commission commenced its high-profile hearing in the case of the Sino-Forest Corporation (“SFC“). SFC is alleged to have engaged in widespread fraud relating to its public financial disclosure. The specific allegations involve the fabrication or overestimation of revenue and assets, falsified evidence of ownership, backdated contracts, and undisclosed… Continue Reading

RCMP arrest six in alleged investment fraud

Posted in Investment Fraud
The RCMP’s Greater Toronto Area Financial Crime team has arrested and charged six people in an alleged fraudulent investment scheme. The RCMP has reported that the alleged fraud worked by enticing investors to purchase business tax losses valued far in excess of their investments. The companies used by the accused included: Integrated Business Concepts (IBC),… Continue Reading

“Winners” and “losers” in alleged Ponzi schemes: Court approves bankruptcy trustee’s settlement with parties who did not lose money

Posted in Investment Fraud
When a Ponzi scheme collapses, as with musical chairs, there will be some investors with a place to sit, while others are bereft of such comfort. Unlike musical chairs, the first time the music stops for most Ponzi schemes, the majority of the participants are on the losing end.  A recent British Columbia decision in… Continue Reading

‘Magic Lady’ in British Columbia faces criminal charges related to alleged ponzi scheme

Posted in Investment Fraud
Vancouver resident Rashida Samji, 60, was arrested after an investigation by RCMP Federal Serious and Organized Crime Unit and Vancouver Police uncovered a scheme potentially stretching back to 2003. She earned the nickname “magic lady” from a seperate investigation run by the B.C. Securities Commission in which it is alleged that Samji took in more than… Continue Reading

Investment manager gets two-year prison term for fraud

Posted in Fraud Recovery, Investment Fraud
The Globe and Mail reported on the sentencing of investment manager Terrence Bedford who received a sentence of two years in prison after he was found guilty of running a fraudulent trading scheme that cost investors millions. Mr. Bedford ran Hamilton-based Greyhawk Equity Partners LP, and was accused of telling investors he was operating a highly… Continue Reading

Documents uncovered during fraud investigations

Posted in Investigations & Compliance, Investment Fraud
SA Capital Growth Corp. v. Mander Estate dealt with the thorny issue of whether a court-appointed officer, in this case a Receiver appointed to sell the assets of an insolvent entity, had a legal obligation to disclose information that it had obtained to an individual who was facing serious allegations under Ontario’s Securities Act. Justice… Continue Reading

If it seems too good to be true, it probably is.

Posted in Investment Fraud
Financial Advisory services serves a very important function for many Canadians who do not have the time, skill or interest to manage their investment portfolios. Unfortunately, this proves to be dangerous where financial intermediaries go (or arguably have always been) rogue. When you entrust your finances with an investment firm or advisor, you are also… Continue Reading

When would silence or non-disclosure of material facts amount to fraudulent misrepresentation?

Posted in Fraud Recovery, Investment Fraud
In Canada Mortgage and Housing Corp v. Gray (Canada Mortgage and Housing Corp v. Gray, 2013 ONSC 1986), the Canada Mortgage and Housing Corporation (“CMHC”), the insurer of mortgages, attempted to block the release of a mortgage debt from a bankrupted individual who was a victim of a fraudulent scheme, but in CMCH’s view, was… Continue Reading

How should a Court divide a shortfall of money among victims of a Ponzi Scheme

Posted in Fraud and Insolvency Law, Fraud Recovery, Investment Fraud
Dividing up a shortfall from a Ponzi scheme was first posed before the United States Supreme Court in 1924. The infamous case of Cunningham v. Brown dealt with the original Ponzi scheme of Charles Ponzi and distributing remaining funds back to victims when his investment scheme was finally unravelled, but left victims with only a fraction… Continue Reading

Red flags of a Ponzi Scheme

Posted in Fraud Prevention, Investment Fraud
Charles Ponzi perpetrated the first notorious investment scheme in the early 1900s – after whom the investment scheme was named. Ponzi schemes share a basic feature and red flags usually exist which can help investors avoid becoming victims. In a Ponzi scheme, the perpetrator convinces victims to “invest” money, for the promise of a high or… Continue Reading