Richmond pair fined $6.3M for running a Ponzi scheme
Todd Norman John Bezzasso and Wei Kai "Kevin" Liao fraudulently raised $5 million from 85 investors
Two Richmond, B.C., men who operated a multi-million dollar Ponzi scheme have been ordered to pay fines of $6.3 million by the British Columbia Securities Commission.
According to the decision, Todd Norman John Bezzasso and Wei Kai "Kevin" Liao fraudulently raised approximately $5 million from 85 investors through two companies, Bezzaz Holdings Group Ltd. and Nexus Global Trading Ltd., between February 2015 and March 2016
The BCSC said Bezzasso, who was the mastermind, used a large portion of investor funds to pay the profits of early investors. It said late investors suffered the most financial harm, many of them losing everything.
The scheme promised returns of between five per cent and 30 per cent for periods of one to six months, payable monthly through post-dated cheques.
Promotional material led investors to believe that Bezzaz owned Nexus and its contracts to distribute certain brands of alcohol in B.C. Additionally, it was presented that Bezzaz sold a variety of products, including health supplements and e-cigarettes.
Bezzasso was found to have defrauded all 85 investors. He has been ordered to pay an administrative penalty of $4.5 million. Bezzasso, Bezzaz and Nexus have been jointly fined $1,619,563, representing the amount made as a result of the misconduct.
Liao worked as a "finder" of investors for Bezzasso and was ordered to pay $100,000 in administrative sanctions and handed a financial sanction of $68,530 representing the amount he profited.
Liao was found to have committed fraud against one investor, and to have traded in securities and acted as an investment adviser without being registered.
The decision describes Bezzasso as the "controlling mind and management" of both companies.
It says "the failure...to maintain proper or indeed any financial records, the co-mingling of investor and other funds and multiple transfers among various bank accounts made it impossible to trace the exact flow of investor funds and business revenues."
In addition to the fines, Bezzasso was permanently banned from B.C.'s securities industry. Liao was banned for 15 years.