Arvindbhai Bakorbhai Patel, financial planner, charged in Ponzi scheme
Former B.C. Coast Capital Savings mutual fund salesman faces 32 Securities Act charges in $110M scheme
Arvindbhai Bakorbhai Patel, a former B.C. Coast Capital Savings financial planner, has been charged with 32 counts of Securities Act violations in connection with a $110-million Ponzi scheme.
Patel is accused of advising clients to invest in a fraudulent scheme operated by former notary public Rashida Samji.
Investors included family members, co-workers and Coast Capital customers.
'We trusted him'
Victor Vishwanathan and his daughter are among 15 alleged victims named in charges sworn in Surrey provincial court in January.
"We trusted him," Vishwanathan said. "I feel betrayed by a friend, and also I feel morally responsible for introducing my daughter to this scheme and losing her money."
Last month, the B.C. Securities Commission fined Samji $33 million for running a Ponzi scheme. She still faces 28 criminal charges of fraud and theft, relating to $17 million she allegedly defrauded from 14 victims.
According to the commission, investors believed they were providing financial backing for the expansion of foreign wineries built by the Mark Anthony Group.
They were told the money would be used as collateral for loans, but remain in Samji's trust. As it turned out, the company had no idea its name and reputation were used in association with the scheme.
Clients thought they would earn 12 per cent interest on their investment annually, with the first half of that amount paid after just one month.
News of the Securities Act charges against Patel came as a surprise to investors contacted by the CBC.
In April 2012, the then 58-year-old reached a settlement agreement with the securities commission, receiving a permanent market ban and signing away his interest in five properties.
The commission said he convinced about 90 investors to place nearly $29 million with Samji.
But the RCMP said their investigation continues. The new charges carry maximum penalties of $3 million and up to three years in prison.
Vishwanathan said Patel handled his RRSPs at Coast Capital.
He said he put Patel in touch with his daughter after the financial planner allegedly suggested a "secure" investment in the Mark Anthony Group.
"They exchanged some emails and talked over the phone and finally, she decided to go ahead and invest $50,000," he said.
Vishwanathan said she lost about $25,000.
Co-worker named as victim
Another of the investors named in the charges worked with Patel at the credit union. Her husband told a securities commission hearing they heard about the scheme at a Coast Capital Savings Christmas party and invested $200,000.
He said the collapse of the scheme and the ensuing investigation sent his wife into depression and alienated her from other credit union employees.
In her own interviews with commission investigators, Samji claimed Patel often brought cash into her office from investors, taking some of his cut from their money.
As part of the panel's decision, Samji was ordered to pay the commission $10.8 million, which is the difference between the monies deposited by investors and paid to other investors.
None of the charges have been proven in court.