The British Columbia Securities Commission (BCSC) levied $626,000 in sanctions and issued market bans against Cherie Evangeline White and her company Kingdom Investments 2015 Inc. for orchestrating a Ponzi scheme involving a real estate flipping scam.
According to the charges brought against her, White’s company promised high returns for investors from “fixing and flipping” and “buying and holding” properties. Most investors were promised returns of between 10% and 30%. White also claimed her company was helping individuals who faced barriers to housing access, including recovering addicts.
However, White and Kingdom fraudulently used approximately $176,000 of some of the investors’ funds to repay other investors and to pay back a personal loan from White’s stepfather. She also raised an additional $100,000 from two investors without telling them the company was defaulting on payments to other investors.
In an interview with BCSC investigators, White admitted repaying investors with funds from earlier investors, but claimed ignorance by insisting she “was at the beginning of my career when I didn’t know that you weren’t allowed to do that.”
Investigators also found White’s company distributed more than $1.18 million worth of securities to 24 investors without a prospectus between 2016 and 2016.
The BCSC determined that investors lost approximately $776,000 based on White’s actions.
“The damage done to the investors in this case cannot be overstated,” the BCSC panel said. “Investors shared their anger, remorse for trust lost and shed tears while speaking of feelings of violation, disappointment, self-doubt, shame, regret, guilt and failure.”
The panel added White and Kingdom “did not cooperate fully in the enforcement process, have shown little to no remorse for their actions or the damages caused by them, and have failed to demonstrate any understanding of their misconduct or its impact.”
White and Kingdom must pay a combined $275,771 to the BCSC, while White must also pay an administrative penalty of $350,000 for her misconduct.
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So the government gets a bunch of money, but the investors get nothing. Seems about right.