BCSC imposes lifetime bans, $1.7 million in penalties for fraud
The British Columbia Securities Commission has imposed lifetime bans and hefty fines on three men it deemed to have committed fraud by not using investors' money for its intended purpose.
Patrick K. Prinster, David Scott Wright and Donald Bruce Edward Wilson were all permanently banned from purchasing or trading securities and exchange contracts, and each individual was also ordered to pay a six-figure sum.
Prinster and Wright were fined $250,000 and Wilson was ordered to pay $150,000. Additionally, two corporations run by the three men were ordered to pay fines of more than $500,000 apiece.
These penalties stem from a BCSC decision issued in April, which found that the three men and their companies had diverted money given to them by investors away from mortgages secured by real estate, which is what had been advertised.
Instead of investing the money in mortgages, the trio used investors' funds to pay related companies for start-up costs and for other purposes, BCSC said in its initial decision.
Investments totalling roughly $1.1 million were spent in this way, according to BCSC, and nearly all of that money was lost.
That said, the securities commission did not find evidence that the three men had been personally enriched by the investments they diverted.
The commission noted that the men had carried out their misconduct "despite warnings and concerns expressed to them from multiple sources."
In addition to the lifetime ban on securities trading, each of the three men was also banned from using exemptions set out in the Securities Act, acting as a "registrant or promoter" for securities, acting in a management or consultative capacity in the securities market and engaging in investor relations.
The two companies penalized share the name DominionGrand. One, called DominionGrand II Mortgage Investment Corporation, was fined $561,479. The other, called DominionGrand Investment Fund Inc., was fined $500,961.
A company called DominionGrand Development Group Inc., lists offices in downtown Vancouver and Hong Kong on its website and appears to offer mortgages and mortgage-backed investments.
The company lists Patrick K. Prinster as its founder, "D. Scott Wright" as its president and director and "Donald B. Wilson" as a vice president.