Door Manufacturing Caught Up in British Columbia Ponzi Scheme

August 3rd, 2020 by Drew Vass, Executive Editor

Two residents of the province of British Columbia, Canada, were recently ordered by the British Columbia Securities Commission (BCSC) to pay $6.3 million for committing fraud through a Ponzi scheme. Todd Norman John Bezzasso raised approximately $5 million from a total of 85 investors through two companies known as Bezzaz Holdings Group Ltd. (Holdings) and Nexus Global Trading Ltd. (Nexus). Among the companies incorporated into the marketing and promotions for investment was a door manufacturing business. The door business isn’t identified in any of the documents relating to an investigation or ruling, nor has it been identified in other reporting.

Holdings was incorporated in British Columbia February 26, 2010, listing Bezzasso as the sole officer and director. Although evidence posted amid the hearing did not include a share registry, based on witness testimony it is believed that the holdings company was wholly owned by Bezzasso, who began soliciting investors in late 2013 or early 2014. Bezzasso prepared, or commissioned at his direction, promotional materials for the investment opportunity he was offering—describing Holdings as having various business interests, including ownership in a liquor distribution business and the sale of products related to liquor consumption, health supplements, e-cigarettes and a door manufacturing business.

Between February 2015 and March 2016, Bezzasso, a resident of Richmond, British Columbia, raised approximately $5 million from 85 investors. Meanwhile, Wei Kai Liao acted as a dealer and advisor, referring to 27 investors who together posted $1.6 million. While a panel found that Bezzasso, Holdings and Nexus committed fraud against all 85 investors, it also found that Liao committed fraud against one investor, traded in securities without being registered and acted as an adviser to investors without being registered to provide such services.

In its investigation, the panel found that instead of using all of investor funds as described and promoted, Bezzasso was actually operating a Ponzi scheme (a scheme designed to lure in new investors, in order to pay profits to earlier investors—so on and so forth). As such, a large portion of investors’ funds was used to pay earlier investors in the scheme, while many of the people who invested later lost some or all of their funds.

Over the course of their dealings, an employee of Nexus was also involved in a door manufacturing business. The individual, listed simply as “VY” testified that none of Bezzasso, Nexus or Holdings had any cause for or right to raise money on behalf of the door manufacturing business, nor did they have any basis for promoting the door business through marketing materials. The employee of the door manufacturing business testified that he was not aware that Bezzasso was referencing the door manufacturing business in promotional materials.

Bezzasso has been ordered by BCSC to pay an administrative penalty of $4.5 million, and Bezzasso, Holdings and Nexus are jointly ordered to pay a financial sanction representing the amount they obtained or avoided losing as a result of their misconduct: $1,619,563. For his role in the scheme, Liao has been ordered to pay $100,000 in administrative sanctions and a financial sanction of $68,530.

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