MENU

BC Fraud Costs Investors $21.7 Million

By Andrew Rickard | July 16 2014 07:25AM

The British Columbia Securities Commission (BCSC) has found that two men behind a real estate scheme committed fraud. Their actions cost 698 investors more than $21 million.

Michael Patrick Lathigee and Earle Douglas Pasquill controlled the Freedom Investment Club (FIC Group). They raised $9.9 million from investors and told them the money would be invested in US residential real estate foreclosures through their FIC Foreclosure fund. In fact, the two men used nearly all of the investors' money to make loans to FIC Group companies, which were struggling with debts related to several Alberta real estate properties they had had acquired and were attempting to develop.

By their own admission the FIC Group was “in a very bad situation” and “close to insolvency”, but Lathigee and Pasquill failed to disclose this fact to investors. Instead, they focused on raising capital in a bid to save their company.

"As a consequence of the respondents’ dishonesty, the pecuniary interests of the investors in the corporate respondents were clearly put at risk," found the BCSC Panel. "The 698 investors invested, and have lost, $21.7 million. It would be difficult to find a more compelling example."

The parties will finish making submissions on sanctions in August.

Advertisement
Related to the same topic …