'Magic Lady' Rashida Samji guilty in $110M Ponzi scheme
Samji already faces a $33-million fine from the B.C. Securities Commission
A former Vancouver notary has been found guilty on 28 counts of theft and fraud in relation to a $110-million Ponzi scheme.
Provincial court Judge Gregory Rideout delivered the surprise verdict after rejecting Rashida Samji's bid to claim that criminal charges against her amount to double jeopardy, because she has already been disciplined by B.C.'s securities regulator.
The 63-year-old watched glumly as Rideout said the $33 million in fines leveled against her by the B.C. Securities Commission doesn't begin to address her "moral blameworthiness" for defrauding more than 200 investors.
For that, she still needs to face criminal consequences.
'There's never a happy ending'
Samji stood as Rideout announced his verdict; she now faces up to 14 years in prison. Her sentencing is set for Sept. 27.
Only one of her victims was in the court to witness the abrupt ending to an ordeal which began in January 2012, when the Ponzi scheme came to light.
The court appointed custodian of Samji's notary practice, Ron Usher, was also in the courtroom.
"It is remarkable that she moved to guilty, but of course, the facts have been overwhelming from day one of this investigation," Usher said outside the courthouse.
"There's never a happy ending, but people do like to get to an ending."
Samji declined to comment as she walked away to a nearby pastry shop with Rideout's judgment clutched under her arm. The court heard that publicity around the case has left her an outcast and crippled her self esteem.
Rideout said she has been rejected by members of her own family and lives in a rental apartment after losing her Vancouver home. She works as a receptionist at an inn in the Fraser Valley.
The scheme ran from 2003 until 2012. Investors were told they were providing the money which would back up "letters of comfort" needed by a winery group to convince creditors to finance their expansion.
The cash was supposed to remain in Samji's notary trust account, and victims were promised returns of up to 12 per cent. Samji became known as the 'Magic Lady' because of her uncanny ability to turn a profit.
In reality, the investors were paying each other.
"These promises were false," said Rideout. "Samji's scheme was a big lie and monumental deceit."
A 'true penal consequence'?
In an agreed statement of facts, Samji admitted to running the Ponzi scheme. But she made a constitutional argument that proceeding with criminal sanctions would be an abuse of process by punishing her twice for the same crime.
Rideout's decision is a vindication for the securities commission and its ability to punish white collar crime with large fines. The order against Samji is the biggest against an individual to date.
In order to reach a conclusion, he had to consider whether or not the multi-million dollar fine against her amounts to a "true penal consequence".
Samji argued that the sanctions came as a result of an investigative process that duplicates the criminal system. She claimed the size of the fine made it equal to the kind of punishment she might receive from the courts.
She also argued that she has been stigmatized by media coverage — and particularly by a series of CBC stories which drew on her interviews with commission investigators to paint a picture of the fraud.
"Although Samji opines that the media has socially embarrassed and upset her, she has not argued that the information published by the media is exaggerated, biased or untruthful," Rideout said.
"The stigma caused by the media publications is expected and not exceptional."
Rideout found that the securities commission and the criminal courts serve different functions: the BCSC regulates the market and maintains confidence of investors, while the courts administer justice for the public at large.
The judge found that the size of the commission's penalty, while large, was not out of whack with the scale of Samji's scheme. And while she may have been impoverished and humiliated, she has not lost her liberty.
"Although Samji has been held accountable to the commission and its audience, her misconduct has not been redressed to society at large," Rideout said.
"The present proceedings aim to achieve that purpose."
Samji is also permanently banned from B.C.'s capital markets.
About 90 of Samji's investors came to her through a financial planner at the credit union Coast Capital Savings, Arvindbhai Bakorbhai Patel.
He still faces 32 counts of Securities Act violations in connection with the scheme last year.
In 2012, Patel reached a settlement agreement with the BCSC, receiving a permanent market ban and signing away his interest in five properties.