A B.C. Securities Commission panel has found three B.C. residents conspired in an international Ponzi scheme that defrauded 137 fellow British Columbians of nearly $1.5 million.
Between 2014 and 2015, Sabrina Ling Huei Wei and James Bernard Law, of Vancouver, and Justin Colin Villarin, of Surrey, solicited B.C. investors, organized events and sold membership units to American companies promising high, no-risk returns for what turned out to be sham gold mine operations in Brazil and Africa.
In reality, noted the commission in a statement Oct. 6, DFRF Enterprises LLC’s only source of money was from investors, some of whom told their anonymized stories to the panel of commissioners.
Investors fleeced, lose family relationships
One investor, a 41-year-old landscaper who lost $60,000, also referred family members, leading to his brother losing $15,000 and uncle losing $10,000, approximately. The panel noted he testified the fraud “had a significant and permanent detrimental effect on his relationships with his family,” including estrangement during the holidays.
A 38-year-old student and immigrant from Jordan was roped into the fraud by having her partner invest, and lose, $15,000. The Vancouver resident described the experience as “financially devastating and emotional torture,” according to the panel's decision.
A mother of four children from Richmond said she lost her savings but also her friends who she referred to the fraudsters. She also had her husband and other family members lose money.
U.S. SEC found fraud originated in Florida
On Oct. 22, 2019, the U.S. Securities and Exchange Commission obtained default judgments against four key promoters of the Ponzi scheme. The promoters raised more than $15 million from at least 1,400 investors by recruiting new members in pyramid-scheme fashion to keep the fraud afloat, noted the SEC.
Three promoters paid a US$160,000 penalty while lead promoter Daniel Fernandes Rojo Filho, a Brazilian living in Florida, was issued a $1-million fine and ordered to repay nearly US$10.2 million.
“Following several days of hearings, a BCSC panel ruled that Wei, Villarin and Law participated in the fraud by actively soliciting B.C. investors on DFRF’s behalf, and that they knew or should have known that Filho was perpetrating a fraud,” stated the B.C. commission.
The BCSC highlighted some of the steps it took to catch the trio: acting on a tip, BCSC investigators went to a promotional event at the Fairmont Pacific Rim Hotel in Vancouver.
Wei wooed the crowd, according to the panel’s findings.
“Wei spoke and explained that she was an accountant with a background in financial services, in real estate development and in mining development. She described DFRF as an opportunity for the average person to amass great wealth. She showed photographs of what she described as DFRF’s U.S. headquarters in Florida (an impressive office tower) and DFRF’s Canadian headquarters (the Jameson House building, which Wei noted is in the financial district of Vancouver).”
Attendees , the commission noted, were told to expect a monthly return of up to 15 per cent on their membership in interest, and that their principal was guaranteed by insurance.
According to the panel’s findings, Wei “is an accountant by training who articled with a major accounting firm and worked as an auditor;” Law is a businessman “involved in a number of smaller ventures, including at least one multi-level marketing business;” and Villarin was registered to sell insurance and mutual fund products.
The trio was found to be unrelenting in their promotion of the gold mines.
“The BCSC panel found that Wei, Law and Villarin chose to enable Filho’s deceitful acts, and knew — or should have known — that Filho’s claims, and theirs, were fraudulent. Although they became increasingly aware of red flags surrounding DFRF, including the promise of unreasonably high returns, the lack of details about its finances or mines, and the BCSC’s investor alert, Wei, Law and Villarin continued to promote it to unwitting investors,” noted the commission’s statement.
The panel found the trio committed fraud contrary to the B.C. Securities Act. A panel will determine sanctions at a future hearing.
Prior to this ruling against Wei, Law and Villarin, a panel found on April 20, 2021, Monita Hung Mui Chan, of Burnaby, and Marie-Joy Vincent, of Surrey, likewise found to defrauded 52 B.C. investors as part of the scheme.
Chan has paid $135,000 to the BCSC, while Vincent, who did not personally profit, has paid $6,500.