The British Columbia Securities Commission (BCSC) has permanently banned Ponzi scheme operator Doris Elizabeth Nelson and fined her $18.5 million.
A BCSC panel has also ordered Nelson in its decision to repay bilked investors $18.5 million that remains outstanding from Nelson’s fraud.
Not only did Nelson commit fraud and illegally distribute securities but she also lied to a BCSC investigator, according to a February 19 announcement from the BCSC.
Nelson operated a payday loan business through a group of companies that was represented and promoted collectively as the Little Loan Shoppe.
“That was, in actuality, a Ponzi scheme,” the BCSC said in a release.
The BCSC panel found that Nelson perpetrated fraud on at least 121 British Columbia investors, who invested at least $19 million in multiple transactions. The panel also found that Nelson distributed promissory notes in contravention of securities laws concerning prospectus requirements to 47 investors who invested a total of $3,074,900 and US$73,000.
Nelson financed the growth of her business by raising funds from investors in B.C. and the U.S., and used existing investors to recruit new investors, paying these recruiters on a commission basis. In return for investors’ money, she had her companies issue promissory notes.
“[Nelson] carried out a multi-million dollar fraud that was international in scope.,” the panel wrote. “Her payday/short-term loan business was the front for a widespread Ponzi scheme.”
The panel also found that Nelson made false statements to the commission by producing a false affidavit in response to an order to provide information and records on one of her company’s investors.
Nelson must resign any position she holds as a director or officer of any issuer or registrant, and she is permanently prohibited from becoming or acting as a director or officer of any issuer or registrant, trading or purchasing securities or exchange contracts, acting as a registrant or promoter, engaging in investor relations activities, and acting in a management or consultative capacity in connection with the securities market.
