A Sooke businessman embroiled in legal battles over ownership of Sooke Harbour House hotel has been ordered deported from Canada as a result of his involvement with a Ponzi scheme that ran from 2009 to 2013 and involved millions of dollars in the U.S.
Timothy Craig Durkin is a U.K. citizen and a permanent resident of Canada.
The deportation order was issued Jan. 18. A deportation order issued for organized criminality, as in the Durkin case, cannot be appealed to the appeal division of the Immigration and Refugee Board of Canada. Decisions, however, can be challenged through an application for leave and a judicial review at the Federal Court.
It's not yet clear if such a challenge has been launched.
Neither Durkin nor his lawyer could be reached Wednesday.
An email from an official at Immigration, Refugees and Canadian Citizenship Canada said on Wednesday they could not comment on specific cases without consent due to privacy legislation.
Durkin has been involved in legal battles in the capital region due to a failed share-purchase agreement for the Sooke Harbour House hotel.
He was a director of companies related to the hotel that were ordered in 2020 to pay $4 million to Frederique and Sinclair Philip, who owned the hotel. Frederique Philip said this week that no money has been received.
On Tuesday, the B.C. Securities Commission announced Durkin had defrauded a would-be immigrant from China of $1 million by lying about ownership of the hotel. A decision on potential sanctions is scheduled for March 6.
Last week’s deportation decision by adjudicator Trent Cook of the Immigration and Refugee Board follows an admissibility hearing in December 2020 between representatives of Public Safety Canada and Durkin.
“I find that there are reasonable grounds to believe that Mr. Durkin was wilfully committing criminal offences on behalf of a group that meets the definition of a criminal organization,” wrote Cook, who decided Durkin was inadmissible to Canada and issued the deportation order.
Durkin had been deemed inadmissible to Canada due to his alleged involvement with a group of individuals who collaborated to carry out a pattern of investment fraud similar to a traditional Ponzi scheme.
A Ponzi scheme is a fraudulent investing scheme where funds go to earlier investors from money contributed by later investors. Money is typically not raised through legitimate investments.
The alleged activities would be considered fraud over $5,000 in Canada, where punishment can bring a maximum of 14 years in jail, the decision said.
In the aftermath of the Ponzi scheme, criminal indictments were issued in the U.S. against Durkin and three others. The three others were each sentenced to 60 months in prison.
A U.S. Appeals case said that Durkin had been charged with 20 criminal counts but had fled the country.
Durkin told the immigration hearing in Canada that he and his company were unsuspecting pawns in the scam carried out by the others, but Cook said he did not find Durkin credible.
Durkin acquired his permanent resident status in Canada in 1952 in Quebec, Cook said.
The issue of Durkin’s status in Canada arose during his admissibility hearing in December 2020, where it was revealed that Durkin had made a citizenship application 11 months earlier.
Immigration, Refugees and Citizenship Canada suspended Durkin’s citizenship application, pending the results of the admissibility proceeding.
In February last year, the U.S. Department of Justice in Alabama dismissed all criminal counts against Durkin, citing a jurisdictional issue, lack of witnesses and only a 50-50 prospect of winning the case.
Cook wrote that he is not concluding that Durkin is a member of the group that carried out the Ponzi scheme, but that Durkin “consistently contributed to the modus operandi of the scheme through his ongoing relationship” with one of men and the preparation of false financial statements which fostered the fraud and allowed it to expand.
Durkin may not have started the scheme or been as active as others in recruiting investors, but he was a “hearty participant whose role was critical to the scheme’s success,” Cook said.
“Mr. Durkin performed a vital role for a criminal organization perpetrating a Ponzi scheme. While he may not have orchestrated the operation or recruited investors, Mr. Durkin and Westover (his company) were integral to the operation’s success through the production and distribution of false investment returns intended to maintain current investors and assist in the inducement of future investors.”
Cook said it is probable that Durkin either knew about the scheme or was wilfully blind to its existence.