SURREY – Investors defrauded by a South Asian notary public and an Indo-Canadian accomplice who worked for Coast Capital Savings, took their fight to recover their money to the door step of the credit union’s Newton branch last Saturday.
Despite defrauded by notary public Rashida Samji and her accomplice Arvindbhai (Arvin) Patel, a former investment advisor at Coast Capital, the victims say they hold the credit union responsible for Patel’s actions who recommended they invest in what regulators say was a Ponzi scheme.
They carried signs outside the Newton office reading, “Coast return our money” and “Coast gave us bad financial advice”, reported Surrey Leader newspaper.
The dispute, which is the subject of lawsuits before the courts, involves Patel, who has already been banned from trading securities.
He admitted to the B.C. Securities Commission (BCSC) in April that he encouraged his Coast Capital clients, as well as friends and family, to invest in what he called a secure investment guaranteed to pay them 12 per cent a year.
The money went to Vancouver notary public Rashida Samji, who was to keep it in a trust account that would act as borrowing security to the Mark Anthony wine group to expand their winery operations internationally.
The claims were untrue – the Mark Anthony group was never involved – and the now-suspended Samji is accused by BCSC regulators of defrauding investors of $83 million after using money from new investors to pay earlier ones between 2003 and January 2012.
Nearly $29 million was invested in the Samji-led investment by the mainly Surrey residents Patel referred since 2006, according to a BCSC ruling.
Coast Capital claims Patel – who was only authorized to deal in mutual funds – was essentially a rogue employee, acting outside his scope of employment.
“We were actually the ones who uncovered Ms. Samji’s scheme and reported it to the B.C. Securities Commission,” said Karen McDonald, senior manager of corporate communications at Coast Capital Savings.
She said Patel was relieved of his duties within days of a client complaint that uncovered his activities.
McDonald said Coast Capital is cooperating fully in an ongoing investigation by securities regulators and the RCMP.
Customers who invested through Patel hold the credit union responsible.
Scott Nicholl, a Surrey lawyer representing 90 affected clients, says some invested more than $1 million and have lost much of their net worth.
Some borrowed money through Coast Capital to invest via Patel and may be forced to sell their homes to pay back credit lines.
The securities commission said in an April ruling that Patel – who put $600,000 of his own money in the scheme – should have known Samji’s claims were false and that high returns with no risk are impossible.
Most of Patel’s assets have been seized and Samji’s accounts are frozen but it’s not clear how much investors may recoup.
A separate class action lawsuit has been filed against Samji, Patel and Coast Capital, with Delta couple Lawrence and June Jer and Surrey resident Janette Scott acting as lead plaintiffs.
The cases are not expected to go to trial until early 2014.
Courtesy The Surrey Leader