BCSC orders fraudster to pay more than half a million dollars for real estate scheme that caused "substantial harm"

VANCOUVER, BC, April 15, 2024 /CNW/ - The B.C. Securities Commission (BCSC) has ordered $626,000 in financial sanctions and issued market bans after finding that a B.C. resident committed fraud, illegally sold shares of her purported real estate company and obstructed justice. 

Cherie Evangeline White and her company, KingdomInvestments2015 Inc., must pay a combined $275,771 to the BCSC, representing the amount they obtained as a result of their wrongdoing. Any money collected by the BCSC toward that amount can be made available to the victims. White, who was the CEO and owner of Kingdom, must also pay an administrative penalty of $350,000 for her misconduct.

Investors were promised returns of between 10 and 30 per cent (usually after six months) and were told that their investments would help house people who faced barriers to housing, including those experiencing addiction. The funds were supposed to be used to flip residential properties for profit.

Instead, the respondents used the investors' funds to repay earlier investors, which the panel determined "is consistent with a Ponzi scheme." Some of the funds also went toward paying back a personal loan from White's stepfather.

White, the panel said, "attracted some investors by projecting shared spiritual values and ... through her calculated use of faith-related institutional logos on investment-related materials." She also created a false sense of urgency, "going so far as to accompany one investor to their financial institution in order to facilitate payment ... despite attempts by staff at such institution to warn such investor."

Kingdom illegally distributed more than $1.18 million worth of securities to 24 investors without a prospectus, a formal document providing details of an investment. The panel noted that prospectus requirements "are the foundation upon which modern securities regulation is framed." White also obstructed justice when she failed to provide documents and information demanded by BCSC staff during a compelled interview.

In total, investors suffered losses of approximately $776,000 as a result of the fraud and illegal distribution. "The damage done to the investors in this case cannot be overstated," the panel said. "Investors shared their anger, remorse for trust lost and shed tears while speaking of feelings of violation, disappointment, self-doubt, shame, regret, guilt and failure."

The panel noted that White and Kingdom "did not cooperate fully in the enforcement process, have shown little to no remorse for their actions or the damages caused by them, and have failed to demonstrate any understanding of their misconduct or its impact."

The panel permanently prohibited White from participating in B.C.'s investment market, except as an investor. Kingdom is likewise permanently prohibited from trading its shares or engaging in any promotional activity.

The B.C. Securities Commission, an independent provincial government agency, strives to make the investment market benefit the public. We set rules, monitor compliance by industry, take action against misconduct, and provide guidance to investors and industry. As guardians of B.C.'s investment market, we're committed to maintaining a market that is honest, fair, competitive and dynamic, enabling British Columbians to thrive.

Learn how to protect yourself and become a more informed investor at www.investright.org

SOURCE British Columbia Securities Commission