Falls Resort financier accused of fraud

A major financier of the The Falls Resort fraudulently used investors' money to buy himself a home and his wife a $24,000 diamond ring, the BC Securities Commission alleges.

The commission has issued a notice of hearing against Rodney Jack Wharram, who presided over three different companies that raised money to help finance the resort's development.

As president of Deercrest Construction Fund Inc., Wharram raised nearly $4 million to build townhomes and a clubhouse at the

resort. But the commission alleges that just $1.6 million of the money raised ever went to the developer of The Falls. Instead, the BCSC says Wharram put $130,000 towards the cost of his own home, loaned his spouse $240,000 "to invest in a grocery store," and spent $24,000 on a diamond ring for his wife.

The BCSC also says less than half of the $5.4 million Wharram raised as president of Falls Capital Corp. actually made its way to the developer of The Falls. Wharram used at least $75,000 of investors' money to purchase a home, the commission alleges.

When the developer of The Falls Resort fell into debt and was granted creditor protection in February 2011, the commission says Falls Capital sold its claims to owed money for

$63,779. Wharram then used the bulk of the proceeds-$47,500-"for personal expenses, including payments to restore his father's jeep and to pay his mortgage," according to the BCSC.

The commission says Wharram, along with Deercrest, Falls Capital and a third company, West Karma Ltd., committed fraud.

The allegations have not been proven. Wharram is the only individual named.

The commission also says Wharram-who it says was never registered to sell securities in B.C.-lied to investigators in March when he said he had not raised any money from investors in 2013.

The commission says that it later learned that just four days before he spoke to BCSC investigators, Wharram had raised $50,000 from one person. A total of $400,000 was raised from other investors throughout March and April, the commission alleges.

Asked if he wished to comment on the allegations, Wharram provided a letter to the Times in which he stressed that the allegations "are still just that-allegations."

He declined to comment on specifics, but did say he wants to help the hundreds of people who invested in his companies recoup their investments.

"I will have to let the legal process decide our next steps," Wharram wrote. "I remain focused in negotiating the best possible outcome for all of the approximate 250 investors that put their faith into my companies with the only priority being seeing them succeed in recouping their investment dollars.

"I would encourage the BCSC to find a way to allow the investors to still participate in the wonderful Deercrest property in Chilliwack, rather than a typical outcome of many other cases in the past.

"I feel I have co-operated with the commission throughout the process, including asking them to visit the site to see the progress we were attempting to make the past few months, which would see the possible return of the investor's money.

"My plan is currently to work towards a settlement agreement that will see our investors still participate in the project."

A temporary order prohibited Wharram from "engaging in investor relations activ-ites," has been issued. A hearing to extend the order has been scheduled for next Wedneseday.

Comments are closed

Community Events, September 2017

Add an Event