The B.C. Securities Commission claims a Vancouver Island man defrauded an investor of $1 million through the sale of a fake ownership interest in a legendary hotel.
The BCSC's allegation against Timothy Craig Durkin is the latest twist in a years-long saga that has seen the Sooke man battle for control of the Sooke Harbour House amid a flurry of lawsuits and the threat of deportation because of his alleged involvement in what authorities in Alabama claim is his role in a multi-million dollar financial fraud.
In a statement Monday, the BCSC claims Durkin raised a million dollars from an investor between December 2015 and March 2016 by promising them a 40 per cent share in the hotel by purchasing 40 per cent of the shares of a company named SHH Holdings Inc.
Durkin was director of SHH Holdings, but the Sooke Harbour House was owned by a different entity.
"In reality, SHH did not have any ownership interest in the corporation that owned the hotel. The investor did not recover any of the $1 million paid for the shares," the BCSC said in a statement.
'A garden-variety bully'
The BCSC alleges that by deceiving the investor, Durkin and SHH committed fraud under the Securities Act. The allegations — which have not been proven — will be the subject of a hearing next month.
The BCSC's claim comes more than four years after Canada Border Services Agency officers showed up at Durkin's Sooke home to question him about a 2013 indictment accusing him and three others of defrauding investors of more than $4 million through a scheme involving a complex financial trading instrument.
The financier has spent years battling Sinclair and Frederique Philip for control of Sooke Harbour House, the legendary tourist destination the pair established in 1979.
Last year, Justice Jasvinder Basran awarded the Philips $4 million in relation to a deal they struck with Durkin and a partner in a failed 2014 share purchase agreement for the hotel, which has hosted both Hollywood royalty and real kings and queens.
The Philips reached a share purchase agreement in 2014 that would have seen Durkin and a partner purchase their interest in the hotel for $6 million.
The Philips believed they were going to get $2 million, and according to the judgment, Durkin assured them that his company — SHH Holdings — had the resources to cover the existing mortgage and interest owed to the Business Development Bank of Canada.
In fact, Basran found that despite promises of a "syndicate" or "posse" of investors from Tehran to Zurich — SHH Holdings never raised more than $54,000.
"[Durkin's] view of the truth is whatever will serve his interests in the moment. He is entirely unencumbered by ordinary norms of morality, integrity and decency," Basran wrote.
"He is a garden-variety bully who preys upon those whom he perceives to be weaker than himself and vulnerable to his mistruths and manipulation."
Immigration proceedings in limbo
Durkin has denied any wrongdoing in the U.S. case and is appealing the B.C. Supreme Court judgment.
Immigration proceedings against Durkin are currently in limbo.
He came to Canada as an infant from the United Kingdom, where he was born.
As a permanent resident, he could be stripped of his status because of the criminal charges in the United States, but Durkin believes he has a right to Canadian citizenship because his parents worked and lived in Canada in the years immediately before and after his birth.
The Department of Immigration Refugees and Citizenship is currently considering Durkin's claim which would render the deportation process moot if accepted.
Last year, North Vancouver-based IAG Enterprises purchased the land, the Sooke Harbour House building and its associated assets in a court-ordered foreclosure sale for $5.62 million.
Neither Durkin, his companies, nor the Philips are involved with the property anymore.