Three men who promoted a massive sports and educational development in the Comox Valley have been accused of illegally selling shares and defrauding investors.

In a notice of hearing this week, the B.C. Securities Commission alleges that, from August 2002 to July 2011, Theodore Robert Everett, Leonard George Ralph and Robert H. Duke sold $5.7 million worth of securities in IAC-Independent Academies Canada Inc. to 183 investors.

The money was being raised for a proposed $4-billion Sage Hills sports and educational complex, to be built over 20 years on 2,040 acres south of Courtenay.

The commission alleges the promoters raised the money without being registered to sell securities and without filing a prospectus with the commission.

In most cases, the promoters claimed an exemption that allows for the sale of securities to friends, family and business associates without meeting registration and prospectus requirements.

However, the commission alleged only 15 investors accounting for $1.94 million of the money qualified for this exemption.

The commission further alleged in November 2009, the mortgage holder commenced foreclosure proceedings, but the promoters continued to raise money, thereby defrauding 61 investors of $1.49 million.

In July 2011, after learning most of the investors did not qualify as friends, family or business associates, the commission issued a cease trade order.

However, the commission alleges the promoters circumvented the order by raising more money through IAC’s parent company, Micron Systems Inc.

It is an ignominious end for such a celebrated project. As envisioned by its promoters, the project would turn the Comox Valley into a sports and educational mecca.

It would include a private university, a K-12 private school, sports academy, two golf courses, a variety of residential enclaves, student residences, and a socially and economically diverse commercial village.

One of the key tenants was to be University Canada West, a small independent university established by former University of Victoria president David Strong.

Just before Christmas 2007, there was more exciting news: Sage Hills had teamed with sports-business giant IMG World to develop the sports component of the project, and former NHL hockey star Ryan Walter had signed on as “senior sports consultant.”

However, the funding stalled, the partners disappeared, and the commission intervened.

A hearing date has not yet been set.

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