A complex multi-agency investigation into a high profile investment fraud has now resulted in 32 new charges against Arvindbhai Bakorbhai (Arvin) Patel, 61, a former financial planner, the RCMP announced this week.
He is alleged to have been working in partnership with Rashida Samji, 61, a well-known former notary. Samji has already been charged with 14 counts of theft and 14 counts of fraud.
“This large scale investment fraud was based on providing returns from future investors instead of from legitimate business endeavours,” said Inspector Mark van Schie of RCMP Federal Serious and Organized Crime (FSOC). “Investments such as this are unsustainable and investors are at risk of losing significant amounts of money. Some indications of fraud may include promises of a guaranteed investment or higher than usual rates of return.”
In February 2012, RCMP Federal Serious and Organized Crime (formerly Commercial Crime), in conjunction with the Vancouver Police Department, and the British Columbia Securities Commission, began an investigation into Samji, a prominent figure in Vancouver’s South Asian community. Samji’s connections had allegedly led to numerous investors unknowingly becoming involved in the investment scheme, which dated back several years.
“The success of this investigation was due to the effectiveness of the collaboration between partner agencies within the financial crime sector here in British Columbia,” said van Schie.
The 32 charges Patel faces all fall under the Securities Act, which allows for fines up to $3 million and up to three years in jail.
THE April 2012 settlement agreement between Patel and B.C. Securities Commission stated: “Arvindbhai Bakorbhai Patel (aka Arvin Patel), a Vancouver resident, breached securities laws when he engaged in multiple illegal distributions, conducted trades outside of his registration, and made numerous statements to investors that he ought to have known were false between at least 2006 and January 2012. Patel admitted that during this period, he introduced approximately 90 investors to an investment opportunity through Rashida Samji, then a notary public in B.C. Many of the investors were Patel’s family, coworkers, and Coast Capital clients. Collectively, they invested approximately $28.9 million, of which a substantial portion is now lost.”
According to the agreement, “Patel is permanently banned from trading securities or exchange contracts, except in accounts in his own name; prohibited from acting as a director or officer of any company or registrant; acting as a registrant or promoter; acting in a management or consultative capacity in connection with the securities industry; and, engaging in investor relations activities.”
The CBC reported that the RCMP said their investigation continues. The new charges carry maximum penalties of $3 million and up to three years in prison.
Back in February 2012, the RCMP Federal Commercial Crime Section and Vancouver Police Department Financial Crime Unit had announced: “The joint police criminal investigation is ongoing and independent of the British Columbia Securities Commission investigation.”
In the 2012 settlement agreement, Patel stated that investors would provide their funds to Samji and sign a letter of direction. He admitted that he told investors the following and ought to have known these statements were false:
* Investors’ money would be safely held in Samji’s notary trust account, and would not be paid out to any party. Samji’s trust account was monitored and audited by the Society of Notaries Public of British Columbia.
* Samji would provide the owner of a B.C. winery, the Mark Anthony Group Inc, and other wineries with a comfort letter that would allow the wineries to use the funds (without accessing them) as collateral for loans in foreign countries.
* Investors were required to deposit funds for terms of at least six months, and earned interest-like guaranteed returns (described as fees) of 6% every six months, or 12% per year. At the end of the six-month period, investors could choose to withdraw from the investment, or sign a new letter of direction with Samji.