A former notary public in British Columbia has been fined $33-million after a hearing panel concluded she conducted a $100-million Ponzi scheme fraud involving false claims about raising financing for a high-end local winery.
The British Columbia Securities Commission announced Wednesday that it has banned Rashida Samji for life from participating in B.C.'s capital markets after a panel ruled she defrauded 200 investors of at least $100-million between 2003 and 2012.
Ms. Samji told investors their money was being used to raise financing for a winery in Kelowna. However, the Mission Hill Family Estate winery knew nothing about Ms. Samji's scheme and said it had no business arrangement with her.
Ms. Samji perpetrated a fraud "many times in her dealings with hundreds of clients," the BCSC panel said in its sanction decision.
"The magnitude and duration of the fraudulent investment scheme and the number of investors affected justify a significant penalty," the decision says.
The regulator ordered Ms. Samji to pay $33-million in fines and $10.8-million as an additional penalty. She is banned for life from trading securities in B.C. and from being registered to work in the investment industry.
The BCSC said a $33-million penalty is appropriate and "serves as a meaningful and substantial general deterrent to others who would engage in similar misconduct."
The BCSC alleged Ms. Samji promised a "secure investment" that would be held in a trust account and used as collateral to secure "letters of comfort" to back loans for wineries, earning 12 per cent to 30 per cent annually for investors. However, the BCSC said Ms. Samji had no notary trust account and deposited the funds into two personal bank accounts.
Much of the money was lost, the regulator said, but at least $63-million was paid to investors over a decade in interest, using money from new investors to pay interest to old investors.
"The whole investment scheme was one big lie," the BCSC said in its July ruling in the case. "There was no investment related to the wine business, nor any letters of comfort."
The Mark Anthony Group Inc., which owns the Mission Hill Family Estate winery in Kelowna, said it did not know its name was being used in the investment scheme and had no involvement in any financing deal.
The RCMP laid fraud and theft charges against Ms. Samji in 2013 involving a portion of the funds she raised from investors between 2006 and 2012.
Investors also filed a class-action lawsuit against Ms. Samji to try to recover their losses.