Chilliwack developer who bilked investors fined $1 million, banned for life by BCSC
The man accused of bilking investors in The Falls Resort in Chilliwack out of millions of dollar has been fined more than $1 million and permanently banned from the province's capital markets by the British Columbia Securities Commission (BCSC).
The BCSC panel found Rodney James Wharram, West Karma Ltd. and the Falls Capital Corp. committed fraud when they took $139,000 from Falls Capital, deposited it with West Karma, and then used it for Wharram’s personal expenses.
Wharram also took $130,000 from Deercrest Construction Fund Inc., deposited it with West Karma and then used it for his personal expenses.
And both Wharram and Deercrest were found to have committed fraud when they took $265,000 directly from Deercrest’s bank accounts and used it for Wharram’s personal expenses.
During his hearing in early 2014, the BSCS said Wharram used investors' funds to buy a $24,000 diamond ring for his wife and lend her $240,000 to invest in a grocery store and to purchase a home.
On Tuesday, Wharram, who still lives in Chilliwack, told the Times he paid back that money and that the BSCS got it wrong. He points to the fact that he was originally accused of taking more than $5 million and was found to have taken $517,000.
Further, Wharram admits to making foolish accounting moves, but he insists the final amount that he still can't account $112,000.
All the above money the BCSC found him to have taken was originally raised to develop The Falls in Chilliwack.
"In this case, the investor losses were significant," the BSCS panel wrote in its decision. "Wharram’s fraudulent misconduct was significant and repeatedly deceitful. As a consequence, it is necessary, for deterrence purposes, to order a significant administrative fine. Other market participants must know that significant financial sanctions will follow this type of misconduct."
The panel ordered Wharram pay $517,500 to the commission, the amount he fraudulently took from investors, and pay a $500,000 administrative penalty.
Wharram was also ordered to resign any position he holds in any "issuer or registrant," and similarly permanently prohibited from becoming a director or officer of any issuer or registrant.
The panel also ordered that the Falls, Deercrest, and West Karma be permanently cease-traded.
One of Wharram's victims, Arnold Earl, a High River, Alta., pensioner, said in 2014 that he knew there was no guarantee that he would recoup his money, but he didn't imagine the money he invested wouldn't help develop The Falls.
"He definitely had the gift of the gab," Earl told the Times of Wharram. "I went in with my eyes wide open knowing something could happen."