The B.C. Securities Commission has accused three men of defrauding investors in the failed Sage Hills development in Royston.
In a notice of hearing, the BCSC alleges that Theodore Robert Everett, Leonard George Ralph and Robert H. Duke, and two B.C. companies, committed fraud and illegally distributed securities.
The notice alleges that between 2002 and 2011, Independent Academies Canada raised $7.3 million from at least 150 investors to develop a business concept combining sports, educational, wellness and residential components into one complex. In 2006, IAC purchased the 2,083-acre Sage Hills property. Everett, Ralph and Duke are all directors and officers of IAC.
In a news release, the BCSC says at least 122 investors had spent nearly $6 million. IAC filed 36 exempt distribution reports purporting to rely on exemptions from prospectus and registration requirements. The commission contends that only 15 of the investors qualified for an exemption, thereby rendering much of the distribution illegal.
In 2009, foreclosure proceedings were commenced against the property. The notice alleges the respondents committed fraud by failing to disclose this information while continuing to market and sell IAC securities to 61 investors, raising about $1.49 million.
With federal funds, the Province purchased the Sage Hills property. The Supreme Court of B.C. approved the deal in September.
Victoria-based IAC planned to build a private sports academy and a K to 12 school that included specialized university programs. The company also wanted to create an ice sheet and a regional park where the property borders the Trent River.
The land will be included in the final settlement package in K'ómoks First Nation treaty negotiations, says the Ministry of Aboriginal Relations and Reconciliation.