A former Abbotsford man who was sentenced in 2011 and 2014 for his role in a Ponzi scheme has lost his bid to overturn a default order that he pay $9.5 million to the BC Securities Commission (BCSC).
The ruling was made Jan. 10 in B.C. Supreme Court in Vancouver and was posted online Thursday (Jan. 26).
The BCSC previously determined that Malcolm Stevenson and two others – Daniel Eric Byer of Abbotsford and Preston Pinkett II of Virginia – had defrauded investors through an investment vehicle called the International Fiduciary Corporation (IFC).
IFC operated from 2004 to 2006, and the BCSC determined that the Ponzi scheme took more than $23.3 million from 89 B.C. investors, who received returns of only $10.3 million.
The BCSC found that Stevenson had withdrawn at least $5.53 million from a pooled account through which the sham investment scheme was administered, court documents state.
In February 2008, the BCSC ordered that Stevenson pay the $5.53 million, plus a $1.5 million administrative penalty, as a result of his contraventions of the B.C. Securities Act.
Stevenson was charged in June 2007 with three counts of contravening the act. He was convicted in 2010, but his sentencing was put on hold after he disappeared and a Canada-wide warrant was issued for his arrest.
Stevenson was believed to be living outside of Canada and was arrested in March 2011 at Toronto Pearson International Airport. He was sentenced later that year to another five months in prison after being given double credit for the 17 weeks he served following his arrest.
He also pleaded guilty in 2014 to a charge of fraud over $5,000. Stevenson was sentenced to five years and eight months in prison but, after he was given credit for time in pre-trial custody, he had no more time left to serve.
Over the years, Stevenson did not pay the BCSC the money he had been ordered to.
The commission took further action, and received a full default judgment against Stevenson in June 2019. He was ordered to pay the entire amount still owing, plus interest – a total of $9.5 million.
Stevenson still has not paid, and court documents state that the BCSC has been negotiating with him since February 2022 to obtain documents related to his financial affairs.
The commission delivered a notice of application in November 2022, seeking orders in this regard.
Stevenson cross-applied for an order to set aside the judgment that he pay the $9.5 million, but that request was denied on Jan. 10 of this year.
“Mr. Stevenson has delayed in bringing the application and, most importantly, does not have a defence worthy of investigation,” Justice Geoffrey Gomery stated in his ruling.
Stevenson is now required to turn over his financial records to the BCSC.
According to the BCSC, IFC promised investors a return of six per cent a month through an “asset growth program.”
The BCSC said the program did not exist and instead Stevenson, Byer and Pinkett used the money “to enrich themselves and keep the scheme going” by shifting money from new investors to older investors.
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