In a continuing five-year legal battle, the B.C. Securities Commission will get another chance to try to collect on one of its largest penalties through assets held by the wife of the financial fraudster.
A B.C. Supreme Court decision earlier this month gives the securities commission the go ahead to test new powers granted in 2020 that provide more latitude in collecting ill-gotten gains through family members and third parties.
As a result of that decision, B.C. Securities Commission spokesman Brian Kladko said this week that the regulator will be moving forward with an amended claim, expected to have been filed by Wednesday.
The securities regulator is trying to collect $21.7 million in penalties through properties and a company held by Vicki Irene Pasquill, a retired teacher in her 70s and the wife of financial fraudster Earle Douglas Pasquill.
The penalties were ordered by a securities commission tribunal in 2015 for Pasquill’s part in a fraud against nearly 700 investors. He and associate Michael Patrick Lathigee raised tens-of-millions of dollars from investors without telling them the real estate development projects pitched were in serious financial difficulty. The panel also found millions raised to invest in U.S. foreclosures had been redirected to prop up the real estate developments with unsecured loans.
The $21.7 million penalty was issued to recoup losses from investors that date to 2008.
Under B.C.’s new laws, the securities commission can now go after family members of financial fraudsters who receive properties and other assets for less than market value, including transfers that not only take place during and after illegal activity, but before the illegal activity.
“This remarkable provision seeks to address the reality that fraudsters and others operating on the margins of market probity will structure their affairs in advance of precarious transactions, promotions and other activities, often transferring assets to family members or other third parties, in order to protect themselves from future judgments and sanctions,” said B.C. Supreme Court Justice David Crerar in his 45-page judgment.
These type of provisions are the first of their kind in Canada, noted the Dec. 6 ruling.
Vicki Pasquill and the company, Vicker Holdings, had sought to dismiss outright the B.C. Securities Commission claim, but the judge ruled against arguments that the suit had been abandoned and had exceeded the limitation period for bringing a case.
“This complicated and novel proceeding should be determined at trial rather than on a summary application,” Crerar said in his ruling.
The judge noted it isn’t surprising that some delay was experienced in the case, including from the changes to securities laws in B.C. and COVID-19.
Crerar added the “ultimate reason” for this delay and why the securities commission was pursuing “secondary” action against Vicki Pasquill and the company is because neither Earle Pasquill nor Lathigee, who now lives in the U.S., had paid their penalties.
According to an amended claim attached to Crerar’s ruling, the securities commission will now target two of seven properties owned by Vicki Lathigee and the company Vicker Holdings. Those include a home on West 27th Avenue, assessed at $3.74 million, and another on West 7th Avenue, assessed at $5.39 million, both in Vancouver.
The claim notes the house on West 27th Avenue, originally owned solely by Earle Pasquill, had half its value transferred to his wife in 1995 for $1 and the other half in 2000 for $1. Vicki Pasquill has argued the 7th Avenue property was inherited and should be off-limits, but the securities commission has noted that it came into Vicki’s ownership after Earle’s fraud and she undertook $400,000 in property upgrades.
Also targeted are shares in Vicker Holdings (which owns two of the other five houses) claimed to have been transferred from Earle to his wife for less than fair market value, and other transfers that include proceeds from Earle Pasquill’s retirements savings of about $645,000.
According to company registry records, Earle was a director in Vicker Holdings but was removed on March 27, 2015, the same day his penalties were announced. His wife is now the sole director.
B.C.’s regulatory changes in 2020 had allowed the B.C. Securities Commission to go after retirement savings, which had previously been off-limits. However, the B.C. Securities Commission lost an earlier round in the long-running legal battle when a 2021 B.C. Court of Appeal ruling found the securities commission’s effort to freeze the retirement savings of Earle Pasquill fell outside its authority, and that laws to protect pension savings trumped securities regulations.
Amendments introduced in 2023 are meant to fill that gap and allow the securities commission to target pensions.
The B.C. government has been introducing changes to improve the securities commission’s penalty collection abilities and strengthen market regulations following a 2017 Postmedia News investigation that found more than half-a-billion dollars in penalties had gone uncollected by the B.C. Securities Commission in the previous decade, and that criminal prosecutions by police were rare.
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