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$100-million Ponzi scheme snared 200 victims, many in Surrey
A former notary public who bilked scores of Metro Vancouver investors of more than $100 million has been found by securities regulators to have run a Ponzi scheme.
Vancouver-based Rashida Samji committed a fraud under the B.C. Securities Act on more than 200 investors between 2003 and 2012, a B.C. Securities Commission panel ruled.
Surrey lawyer Scott Nicoll, who acted on behalf of 51 victims from Surrey and Richmond, is not surprised by the finding.
"It was pretty apparent it was a fraud from the outset," he said.
Samji claimed she was offering a secure investment guaranteed to pay 12 per cent a year. Invested cash would go into a trust account that would secure borrowing by a B.C. winery so it could expand internationally.
"The whole investment scheme was one big lie," the BCSC panel states in its ruling. "There was no investment related to the wine business.
"Samji used investors’ funds to pay other investors in order to keep the scheme going. She also used investors’ funds for her own purposes. It was a monumental deceit."
The BCSC has yet to determine its sanctions against Samji, who also faces criminal charges of fraud and is named in civil lawsuits.
Nicoll said the Surrey victims he represented invested between $50,000 and $1.1 million each.
"They were either elderly or still working in very average jobs," he said. "These were not people who could afford to lose these investments and then go on about their lives."
Nicoll said Samji succeeded in keeping her scheme afloat for so long in part because she ensnared a former investment advisor at Coast Capital Savings who recommended her investment to clients at the credit union.
Coast Capital didn't know its rogue employee Arvin Patel was selling more than just mutual funds and this spring reached out-of-court settlements of civil action brought by many of the fraud victims.
The securities commission said in a previous ruling that the credit union advisor – who put $600,000 of his own money in the scheme – should have known Samji's claims were false and that high returns with no risk are impossible.
Other warning signs included the fact the investment wasn't approved by the credit union, had no disclosure documentation, and was described as an "exclusive" opportunity not available to the general public.
"One of the things that lured them into this investment in the first place was the comfort that their money would be held in a notary public trust account," Nicoll said.
He is now pressing the Society of Notaries Public of B.C. to agree to use its special compensation fund to help Samji's victims recoup more of their losses.
"We're hoping the notaries society will make them whole."