BCSC accused B.C. man, associates in $11.7M fraud involving 123 investors

VANCOUVER – The British Columbia Securities Commission has accused a former registrant of committing a multimillion-dollar fraud through a group of companies he controlled and that money was raised illegally with the help of commissioned associates.

In a notice of hearing, BCSC staff allege that in the alleged scheme the respondents, led by B.C. resident Thomas Arthur Williams and his Global Group of companies, raised about $11.7 million from 123 investors between February 2007 and April 2010.

The commission, an independent government agency which regulates capital markets in British Columbia, alleges that Williams used several finders to introduce investors to the Global Group, signing associate agreements with them and paying commissions to find investors.

Williams made promises to investors, including that their investments were shielded from securities laws, that he would provide returns of at least two per cent interest per month with a potentially higher interest rate on a “best efforts” basis, and that he would preserve the integrity of their funds.

The notice alleges that Williams invested about $5.8 million of investor funds with individuals and companies introduced by or connected to persons who had criminal or regulatory histories of securities fraud. Williams did not inform investors about the fraudulent background of the people he was dealing with nor did he receive any returns or principal from any of the investments he made.

“Williams did not inform his investors that none of his investments produced any returns, but rather continued to raise more money from investors, provided monthly statements showing fictitious returns of up to four per cent on their investments and paid interest and principal payments to some investors from other investors’ money,” the commission said.

The notice alleges that although some investors started to get suspicious about Williams in mid-2008, he continued to promise investors until at least 2011 that they would get their money back shortly.

Staff are also allege that, with the help of the finders, Williams and the Global Group of Companies raised approximately $5.3 million from 103 investors who had no exemptions from securities laws pertaining to prospectus requirements, thereby rendering the distribution illegal.

During the relevant period, none of the respondents were registered under the act in any capacity, and the Global Group of Companies has never filed a prospectus in respect of the distribution of its securities.

The finders were identified by the commissions as Susan Grace Nemeth, Renee Michelle Penko, Paul Finney, Irene G. Beilstein, Christina Kiemel, Helena Yvonne Becker, Dennis Carl Weigel, Daniel Quoming Sam, Eric Clark, Sharon Downing and Robert Laudy Williams.

These allegations have not been proven.

Counsel for the BCSC executive director will apply to set dates for a hearing before a panel of commissioners on July 22.