Ponzi scheme fraudster fined more than $500K as investors lose life savings

BCSC says real estate related fraud caused 'substantial harm' and lost $776K

Ponzi scheme fraudster fined more than $500K as investors lose life savings
Steve Randall

Promising returns of 10-30% on purported real estate investments has landed a BC resident with more than half a million dollars in financial sanctions and a permanent market ban.

The British Columbia Securities Commission says the activities of Cherie Evangeline White and her company, KingdomInvestments2015 Inc., were consistent with a Ponzi scheme and caused “significant harm” to investors with many losing their life savings among the $776,000 total losses.

The regulator found that White and her company told investors that their investments would help house people who faced barriers to housing thanks to the purchase, improvement, and sale of properties at a profit.

Some of those who invested were attracted by White’s use of “shared spiritual values and by carefully building trust through representations about her family’s alignment with the Salvation Army Church and common dreams and aspirations,” the BCSC said.

Investors’ funds were used to repay earlier investors while some was also used to repay a personal loan from White’s stepfather. Kingdom illegally distributed more than $1.18 million worth of securities to 24 investors without a prospectus.

“The damage done to the investors in this case cannot be overstated,” the BCSC 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 regulator’s panel said that White made herself difficult to locate and communicate with and promised returns to investors, sometimes for years, without them materializing. She also used “aggressive tactics on investors by creating a false sense of urgency.” This included accompanying one investor to their financial institution to get a payment despite staff at the FI attempting to warn the investor.

Obstructing jusice

As well as fraud and illegally selling shares in her company, White also obstructed justice by failing to provide documents required by the regulator, and she 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 BCSC ordered White and Kingdom to pay a combined $275,771, representing the amount they obtained as a result of their wrongdoing with any money collected being made available to the victims.

White must also pay an administrative penalty of $350,000 for her misconduct and is permanently banned from participating in BC’s investment market except as an investors. Kingdom is permanently prohibited from trading its shares or engaging in any promotional activity.

The panel’s full decision is available on the BCSC’s website.