Lawsuit of the week: American broker-dealer claims West Vancouver businessman using ‘sham’ trusts to evade a US$20 million arbitral award

San Francisco-based broker-dealer BTIG LLC is suing West Vancouver businessman Scott Dorey and several others, claiming Dorey is using “sham” trusts and numbered companies to ...

San Francisco-based broker-dealer BTIG LLC is suing West Vancouver businessman Scott Dorey and several others, claiming Dorey is using “sham” trusts and numbered companies to dodge a US$20 million arbitration award.

The company filed a notice of civil claim in BC Supreme Court on October 20, naming Dorey, 0961737 B.C. Ltd., 0998650 B.C. Ltd., BK 2012 LLC, Southpac Trust International Inc. as trustee of the Dorey Capital Family Trust, and Justin Boswick and Michael Dorey as trustees of the JGR Trust, as defendants.

According to the lawsuit, the arbitral award stems from an October 2013 trade on the Indonesian Stock Exchange where BTIG was left holding the bag when the value of the security “fell to near zero levels.” The trade transaction involved “numerous parties,” including Dorey and BHP International Markets Ltd., a company incorporated in the Bahamas of which he was a co-chairman and co-CEO.

BTIG filed suit against Dorey and others in California over the ill-fated trade, and it ended up going to arbitration with the Financial Industry Regulatory Authority. BTIG won a US$20 million award, which was later confirmed by a federal court in California, and the BC Supreme Court issued an order on October 16 to enforce the award against Dorey, according to the lawsuit.

But Dorey, the company claims, “has structured his affairs and assets in a deliberate and unlawful attempt to defeat recovery by creditors,” the claim states. “Through the use of alter ego and nominee corporations and sham trusts which are actually bare trusts, the defendant Dorey deliberately structured his affairs and assets and acquired assets in a manner designed to hide, insulate and protect his assets.”

Dorey allegedly holds title to a Whistler property through defendant 0961737 B.C. Ltd., a company in which he and his wife, non-party Marci Cooper, are officers. The property at 7449 Treetop Lane is assessed at more than $4.1 million. In addition, the couple holds title to 3280 Thompson Crescent through defendant 0998650 B.C. Ltd., a property where the land and buildings are assessed at more than $9.3 million.

Both properties, BTIG claims, are beneficially owned by Dorey and the titles are allegedly structured and “held to create the false appearance that he is not the beneficial owner.”

BTIG seeks declarations that the defendant trusts are shams and that Dorey beneficially owns the Whistler and West Vancouver properties. The company also seeks an order registering the judgment against the properties under the Court Order Enforcement Act.

The allegations have not been tested or proven in court, and the defendants had not responded to the claim by press time.

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