A Vancouver Island man has been fined $600,000 by the B.C. Securities Commission (BCSC) after he swindled $1 million from an overseas investor under the pretense of owning part of the Sooke Harbour House hotel.
The fraud dates back to 2015, when Sooke man Timothy Craig Durkin told an investor that his company, SHH Holdings Limited, owned the Sooke Harbour House.
He told the investor, a woman from China, that if she bought 40 per cent of his shares for SHH Holdings Limited, she would obtain 40 per cent ownership interest of the hotel.
“In reality, at that time, SHH did not own any of the shares in the corporation that owned the hotel,” said the BCSC in a release Wednesday.
On three separate occasions between December 2015 and March 2016, the BCSC says that Durkin and SHH misled the investor and her financial advisors about the ownership of the hotel “knowing that they would be taken as an accurate representation of its current financial situation.”
“Based on misleading or false information, the investor’s company signed an agreement with SHH and advanced $1 million to purchase the shares.”
The funds were later spent and have not been recovered, according to the BCSC.
On Wednesday, the securities commission announced that it had ordered Durkin to pay a $600,000 administrative penalty.
He’s also permanently barred from participating in B.C.’s investment market and must resign from any position “as a director or officer of an issuer or registrant.”
SHH has also been ordered to pay $1 million, which represents the amount it obtained through fraud.
However, the BCSC says it will reduce that fee by any amount that’s returned to the investor “as a result of a judgment in a civil action in the B.C. Supreme Court,” if that ever occurs.
The Sooke Harbour House is temporarily closed for renovations, according to its website, with no scheduled date for reopening.
The BCSC has also banned Durkin from several other activities, including:
- Trading in or purchasing any securities or derivatives
- Becoming or acting as a director or officer of any issuer or registrant
- Becoming or acting as a registrant or promoter
- Advising or otherwise acting in a management or consultative capacity in connection with activities in the securities or derivatives markets
- Engaging in promotional activities by or on behalf of an issuer, security holder or party to a derivative, or another person that is reasonably expected to benefit from the promotional activity, and
- Relying on any exemptions set out in the Securities Act, the regulations, or a decision.
This article was originally sourced from www.CTVnews.ca