In this picture taken Wednesday, Aug. 29, 2018, hops cones are seen during a harvest at a hopfield in Czech Republic. A Fraser Valley hops farm company and its director have been ordered to pay more than $1 million over an alleged fraud that a B.C. Securities Commission panel described as "near to the most serious type of fraud possible in an investment context." THE CANADIAN PRESS/AP, Petr David Josek

VANCOUVER - A hops farm company and its director have been ordered to pay more than $1 million over an alleged fraud that a B.C. Securities Commission panel described as "near to the most serious type of fraud possible in an investment context."

A statement from the commission says Fraser Valley Hop Farms Inc. and its sole named director, Alexander William Bridges, must pay a combined $498,273, representing the amount they obtained as a result of their alleged wrongdoing.

It says Bridges, also known as Alex Blackwell, has been fined a further administrative penalty of $550,000.

The three-person panel has also permanently banned him from participating in the investment market in the province, except as an investor, and the company is prohibited from trading its shares or engaging in any promotional activity.

The statement says investors had been told their money would be used for operating expenses on a 125-acre farm growing hops for the craft brewing industry.

It says Bridges controlled the company's bank account, solicited investors and decided what to do with their money, allegedly committing fraud when he spent nearly $500,000 on expenses for personal or otherwise illegitimate use.

The commission says Bridges and the company's marketing director, Shane Douglas Harder-Toews, also illegally distributed securities to investors when they sold shares without a prospectus, or a formal document providing details.

The panel found Harder-Toews was a "de facto" director of the company. He's been ordered to pay a further administrative penalty of $50,000 and prohibited from participating in the markets for six years, the statement issued Friday says.

In its decision, the panel says the pair's alleged misconduct resulted in "significant financial and emotional harm to investors," adding "it is virtually certain that the investors lost all of their money."

One unnamed victim testified that she had two young children, her mother had cancer, and she was going through a divorce at the time of her investment, the document says. The alleged fraud had an even greater psychological impact on her than it did a financial one, it says.

Another testified that she used money she received after a debilitating car accident to invest with the company, the decision says. She felt traumatized after Harder-Toews allegedly "started screaming at her" when things were "falling apart," it says.

This report by The Canadian Press was first published Jan. 28, 2024.

News from © The Canadian Press, 2024