Bookkeeper’s dealings with former Vancouver stock promoter shed light on the mechanics of an alleged billion-dollar penny stock trading scheme orchestrated in BC
A BC bookkeeper has been fined $25,000 and permanently banned from trading in penny stocks after regulators determined he “willfully aided and abetted” fraud committed by his client Avtar Dhillon, a former promoter. of prominent Vancouver stocks.
In an administrative settlement agreement with the US Securities and Exchange Commission, Shrizali Jumani, who advertises accounting services in Burnaby, admitted no liability for the facts that he and the commission agreed to on May 22.
Between at least March 2011 and February 2018, Jumani conducted a series of transactions in shares of US-registered OncoSec Medical Inc., a company chaired by Dhillon, who faces jail time at a sentencing hearing this November after plead guilty to three felonies last December. .
Dhillon’s fraud relates to an alleged multifaceted illegal pump-and-dump business scheme involving more than $1 billion in stock sales in more than 100 companies. The exchanges were made, in part, by more than a dozen British Colombians, through shell companies abroad, the commission alleges.
One such shell company offshore was 0903759 BC Ltd, controlled by Jumani but whose assets were owned by Dhillon, according to the commission.
The numbered company bought nearly 80,000 of OncoSec’s predecessor shares, at one cent per share, which were converted into more than 2.5 million restricted shares following a stock split conducted under Dhillon’s oversight.
Jumani knew the company acquired Dhillon’s shares but falsely represented them as company assets, according to the commission.
In order to lift trading restrictions on the shares in order to sell them to the public, Jumani made false representations to the brokerage firm where they were held, in particular that the shares had no OncoSec affiliation (including the firm’s president, Dhillon).
Through 50 transactions, Jumani sold $783,500 worth of shares, disbursing them to One World Ranches LLC and One World Farms Inc., companies owned by Dhillon.
Jumani repeated this process in another round of buying and selling shares, for additional gross proceeds of $257,000.
Jumani “knew or was reckless in not knowing that Dhillon was obligated, as OncoSec’s chairman, not to participate in any undisclosed holdings or dealings in OncoSec’s securities,” the commission agreement states.
In doing all of this, the commission found that Jumani “intentionally violated” various aspects of the US Securities Law.
Contador says he was a victim of Dhillon’s fraud
Reached by phone at his business, Jumani told Glacier Media that at the time of the deals he did not have any information from Dhillon about what the shares were; he said that he informed the commission that he never profited from those sales.
“I did something for him that I shouldn’t have done,” Jumani said, describing his services to Dhillon as basic bookkeeping.
Jumani “provided private accounting services including tax preparation and bookkeeping, and served as Dhillon’s Canadian tax preparer. He has never obtained a license as a Public Accountant or Certified Public Accountant,” the settlement noted.
“I think they (Dhillon) should have known better and informed me when I was selling those shares… I basically got caught up in things,” Jumani said.
“I’m kind of a victim,” he said, describing the deal as a “black mark” on his 40-year accounting career.
Meanwhile, Dhillon’s sentencing hearing has been pushed back to November. While he initially advocated for the Fifth Amendment in the SEC’s civil case against him, he wrote to the commission in April saying he was willing to testify following a statement describing “aggressive promotions” by his companies at the same time as sell restricted stock.
The commission alleged in September 2021 that Dhillon personally benefited from $5 million in three of his US companies.
Dhillon has run numerous Canadian public companies, including a once high-profile Richmond-based marijuana provider called Emerald Health Therapeutics.
Company stock records from the BC court proceedings of Therapeutics’ parent company, Emerald Health Sciences, show that Jumani was distributed 2.66 million charter shares at 0.00001 cents per share in 2013. Jumani allocated hundreds of thousands to holding companies that the commission says are associated with former Fred Sharp, a Vancouver lawyer and offshore shell facilitator. Sharp is a co-defendant in Dhillon’s SEC civil case who has since been found guilty of fraud in a default judgment, after failing to answer the charges.
“This case concerns a sophisticated, multi-year, multinational attack against US financial markets and US retail investors by domestic and foreign actors. These actors schemed to fraudulently sell hundreds of millions of dollars worth of stock in the United States markets,” the SEC complaint stated at the time.
After more than three decades of business in BC, the BC Securities and Exchange Commission recently delisted Sharp from the province’s investment market; however, Dhillon remains unrestrained.
Dhillon, a California resident, could receive a prison term of 63 to 78 months in federal prison.