The British Columbia Securities Commission (BCSC) announced Jan. 17 that investors defrauded by David Michael Michaels will get some money back after the regulator obtained money from the sale of Michael's Hawaiian property and a cash payment from Michaels.

The BCSC's court-appointed receiver, Grant Thornton Limited, holds about $1.1 million from Michaels to return to investors, which is about 20 per cent of the net amount Michaels obtained from the fraud. The regulator says that these payments will not affect its ability to continue to collect against Michaels' outstanding sanctions.

Grant Thornton has sent a notice explaining the claims process to investors, most of whom are seniors living in or around Victoria. Each investor will receive a pro-rated share of the $1.1 million (minus the fee for the receiver) based on the money he or she lost.

Committed fraud against more than 480 investors

A BCSC panel found in 2014 that Michaels committed fraud against more than 480 investors. It banned him from the securities industry and ordered him to pay $23.3 million in fines. When Michaels did not pay his fines, the BCSC started two lawsuits, relating to property in Hawaii and Victoria.

Michaels settled the lawsuits with the BCSC in June 2018, agreeing to hand over the Hawaii property and to pay $50,000. The Hawaii property was sold in December 2018, and the money given to the receiver.

Simplified claims process

"We've been persistent in our efforts to collect from Mr. Michaels, and we're now at the stage where we can return some money to the hundreds of investors who suffered losses because of their investments through him," said Doug Muir, Director of Enforcement for the BCSC. "To get money to people as quickly as possible, we obtained court approval for a simplified claims process that should be efficient and straightforward. We urge investors to respond to the receiver's notice, which is required for them to participate in the distribution."