Here is an example of what happens when you allow a government entity to be the judge, jury, and executioner in a case where evidence can be submitted and proven on the ‘Balance of Probabilities”. Sloppy investigative work seems to be the forte of the British Columbia Securities Commission. Let’s take a look….
In November 2007, the Developer of the Falls Resort approached me and asked if I knew of anyone that might purchase a unit in the Deercrest Townhomes, located on the property. He had Unit 101 that was available for sale and the Respondents indicated they would ask around. I called one of the investors in Edmonton and asked if he wanted to buy and he indicated he would.
Shortly there later, a commission cheque in the amount of $24,292.75 arrived made payable to West Karma Ltd. I placed the cheque into the WKL bank account and NEVER wrote a cheque to myself personally. Looking at the bank account statements for WKL for the following 10 days, $20571.61 was spent directly on business expenses for WKL and FCC and the balance were used for personal expenses.
THESE WERE NOT INVESTOR FUNDS YET PAID FOR BUSINESS RELATED DIRECTLY TO THE WKL AND FCC.
That’s fine – people place funds into their business accounts on a regular basis as shareholder loans. IF the BCSC’s Executive Director (and his Staff) wanted to bring accurate allegations in their Notice of Hearing they needed to complete a proper accounting and bring in a proper number into the allegation….but let’s see what Lead Investigator Elizabeth Chan had to say during the cross examination during our hearing in April 2014:
Q Can we put up, pull up Exhibit 00240? Can you please read this letter for the panel?
A Just the body of the letter, like, —
Q Just —
A — after the “re” line?
Q Just lead the letter please, from who it’s addressed to, and who it’s from and the body of the letter, sure, please.
A Okay. So, I don’t think this is a document that I obtained. Uhm, it says:
West Karma Ltd., BC
Dear Sirs/Mesdames:
Re: Sales of 101-51096 Falls Court, Chilliwack, BC (the “Property”) by Blackburn
Developments Ltd. (the “Seller”) to -REDACTED- (the “Buyers”) effective November 23, 2007 (the”Completion Date”). As notary for the seller, we enclose our firm trust cheque drawn in your favour, in the amount of $24,292.75 representing payment in full for the Commission with respect to the above transaction. Please provide our office with a receipt for payment at your earliest convenience. We trust you find the foregoing and enclosed to be in order, however, should you have any questions, please do not hesitate to contact the writer or Shirley MacKillop of this office.
Yours truly, Simpson & Simpson. And the name there says, “R. Dean Simpson” and the letter, the date, November 23, 2007.
Q Thank you. And have you ever seen this document before?
A Uhm, I didn’t obtain this document during the course of my investigation, but I did see it in the binder of materials of materials contained in documents that you were intending to rely on.
Q That’s the first time you saw it though?
A Yes.
Source: Hearing Transcript, April 11, 2014 (pages 23-25)
Former BCSC Investigator Elizabeth (“Liz”)Chan
This is the testimony of Staff’s most important witness – a Certified General Accountant with a degree from the University of British Columbia in Bachelor of Commerce? That she never saw items going into the bank account that were relevant IF they wanted to bring an accurate number into the hearing room. Elizabeth Chan is a highly paid Senior Investigator with the BCSC – it is HER job to find out the numbers used in the Notice of Hearing are accurate! There is NO excuse for the sloppy work Staff completed in this matter!
How is this even possible is the onus was on the Executive Director to bring in clear and compelling evidence to prove the allegations in the Notice of Hearing? Was the Respondents not entitled to a fair hearing with accurate numbers as the BCSC boasts on their website? This is what happens when you allow an absolute failure to run rampant down at the BCSC….
