A high-flying Vancouver businessman who promised riches to immigrants has been grounded by a B.C. Securities Commission panel.
Commissioners Audrey Ho and Suzanne Wiltshire and vice chair Nigel Cave ruled that Paul Se Hui Oei committed fraud in connection with 63 investments worth slightly more than $5 million.
One of his companies, Canadian Manu, was also convicted under the B.C. Securities Act of the same offences in the same amount, according to the decision.
Two other numbered companies linked to Oei were convicted of fraud in connection with 33 and 30 investments, respectively.
“The respondents misappropriated these funds and used them for their own purposes and not as the investors were told they would be used,” the panel stated.
Last month, Oei was the subject of an unflattering article in the New York Times, which cited allegations that he spent investors' money "on luxury cars, beauty pageants and donations to the British Columbia Liberal Party".
Eighteen other fraud allegations were dismissed.
Investors were told that their money would be invested in Cascade Renewable Organic Fertilizer Corp. in Abbotsford and Cascade Renewable Carbon Corp., which was going to compost waste materials in Port Coquitlam.
An investor who lived in Hangzhou, China, was not told that some of his funds would be used to pay commissions to find other investors. Nor was he informed that some of his money would cover legal fees to process the investment, donations, advertising, or funding beauty pageants.
There were similar stories from several other investors, including residents of Vancouver, in the ruling.
Counsel for the B.C. Securities Commission and the respondents will file submissions next month in advance of any penalties being imposed.