VANCOUVER — The B.C. Securities Commission has ordered a real estate developer to pay a fine of $125,000 after a hearing concluded he defrauded a client for part of a $1-million investment in a project that failed.
The commission says that after Vancouver resident Brendan Schouw deposited the investor's money into Hornby Residences Ltd., his company account, he put some of the funds into his own account.
A news release from the commission says Schouw spent about $75,000 of the redirected money on his personal mortgage payments and on his separate property management business.
Schouw and Hornby Residences are listed as respondents in the case.
The panel says Schouw knew his actions would put the investor's money at risk and disagrees with a submission from the respondents that characterized the misconduct as "technical in nature" or a fault that can be attributed to poor record keeping.
Besides the fine, Schouw and his company have been permanently banned from trading in and buying any securities and ordered to pay the commission nearly $75,000 for repayment to the investor.
The panel's written decision says the investor lost all of his money because the project failed and he testified that he suffers from the guilt of having invested funds from his mother’s estate and the sale of a family home.
The panel does acknowledge in its decision that there was a "real business that was being pursued by the respondents" and that in terms of the number of investors harmed and the size of the fraud "this case is not the most serious of its kind that the commission has dealt with," which was a consideration in the sanctions it imposed.
