The British Columbia Securities Commission (BCSC) has found that Timothy Craig Durkin defrauded an investor of $1 million in violation of the Securities Act. According to the BCSC ruling, released on Tuesday, Durkin falsely claimed ownership of a local hotel with “an intention to deceive the Investor and her advisors.”

Durkin’s history with the hotel, Sooke Harbour House, dates back to 2014, when he entered into a share-purchase agreement to buy it from Frederique and Sinclair Philip. He then sought out investors, ostensibly to develop the business.

One of those investors was Mona Mo, who owned La Sooke Spa, which provided in-room spa services to guests at the hotel. Durkin told Mo that Sooke Harbour House was a wholly owned subsidiary of his company, SHH Holdings Limited, and that a $2-million investment would give her a 40% ownership interest in the hotel. 

But ownership shares weren’t Durkin’s to give. He’d failed to go through with the  necessary steps to purchase the hotel—or to abide by any of his other contractual obligations under the share-purchase agreement.

At the time, Durkin was a fugitive who’d been indicted in the US on charges related to financial crimes. The US dropped the charges last year (because of jurisdictional issues and witness availability, according to a solemn declaration by a Canada Border Services hearing officer who spoke with an attorney for the US Department of Justice).

The Philips eventually learned that Durkin was a fugitive, and, after they terminated their agreement with him, he sued them. Though he never paid them anything for the hotel, he tried to pass himself off as its rightful owner—and even managed to gain control of its day-to-day operations after filing a false affidavit in court. 

The Philips countersued and won a judgment against him of approximately $4 million; they have yet to see any of that money. (Durkin also sued Capital Daily for our reporting on the Sooke Harbour House saga. He lost that case, and was ordered to pay our costs; he has not done so.)

Mo, too, successfully sued Durkin. After paying the first million of her agreed-upon investment, she learned that he didn’t actually own the hotel and therefore wasn’t in a position to give her equity in it. Last year, a BC Supreme Court judge awarded her $1 million in compensatory damages with 4.75% interest, as well as $100,000 in punitive damages. 

The BCSC pointed to three fraudulent misrepresentations that Durkin made in his dealings with Mo. The “single most compelling piece of evidence,” according to the commission, was an email exchange between Durkin and Mo’s lawyer in which the lawyer, seeking to clarify the hotel’s ownership structure, asked whether Durkin’s company was already the sole shareholder or would be acquiring shares concurrently with Mo’s purchase. Durkin replied, “Already acquired,” which, according to the commission, “contradicts all of Durkin’s evidence and submissions to the effect that he believed the Investor understood that Holdings did not then own the Hotel Shares.” 

The key evidence in the case was written, the commission pointed out. It also revealed Durkin’s intentions. “We have no difficulty interpreting that evidence,” the commission wrote.

Sanctions will be determined at a later date. BCSC can impose financial penalties of up to a million dollars, as well as order the return of ill-gotten gains. It can also impose market prohibitions, such as barring Durkin from engaging in investor relations or from participating in the securities market.

Durkin told Capital Daily there are “numerous flaws” in the commission’s decision. He says he plans to take them up with the Court of Appeal. Mo declined to comment.