A British Columbia Securities Commission (BCSC) panel has found that a B.C. resident and two B.C. companies used a Ponzi scheme to commit fraud against investors.
Another B.C. resident also committed fraud against one investor by failing to tell the investor about repayment problems that other investors were experiencing in the Ponzi scheme.
Todd Norman John Bezzasso raised approximately $5 million from 85 investors through his companies, Bezzaz Holdings Group Ltd. (Bezzaz) and Nexus Global Trading Ltd. (Nexus). During this time, Bezzasso got another Richmond resident Wei Kai (a.k.a. Kevin) Liao to find investors on his behalf.
Investors were shown promotional material for Bezzaz indicating it owned Nexus, a company contracted to distribute certain brands of alcohol in B.C. Promotional material also indicated that Bezzaz sold a variety of products, including health supplements and e-cigarettes. In return for investing in Bezzaz, investors were promised rates of return between 5 per cent and 30 per cent payable through post-dated cheques.
The panel found that instead of using investor funds as promised, Bezzasso was actually operating a Ponzi scheme. A large portion of the investors’ funds were being used to pay earlier investors, meaning many people who invested later during the scheme lost some, or all, of their money.
While the panel found that Bezzasso, Bezzaz and Nexus committed fraud against all 85 investors, the panel found that Liao:
- committed fraud against one investor for aggregate proceeds of $37,887
- sold $1.6 million worth of securities to 27 investors without being registered
- acted as an adviser to 12 investors without being registered.
The panel will impose sanctions after considering submissions from BCSC staff and the respondents.
The panel had earlier dismissed, for lack of evidence, an allegation of fraud against an employee of Nexus, Fiorino Corsi, who was named as one of the participants in the fraudulent investment scheme in a Notice of Hearing on August 3, 2018.