The Canadian government has issued a deportation order for a businessman tied to the Sooke Harbour House in connection with his alleged involvement in a U.S. Ponzi scheme.
Timothy Durkin is a permanent resident of Canada who holds British citizenship and has been living in Sooke.
His immigration status was in jeopardy because he was indicted in 2013 by a Grand Jury in Alabama, along with three others, for an alleged conspiracy to commit securities and wire fraud.
The others were convicted and received 60-month sentences. Durkin faced the same 20 criminal counts but according to a U.S. Court of Appeals decision “fled the country and has yet to be apprehended.”
In November 2017, Durkin was served a notice from the Canadian government advising him that he was the subject of an admissibility review because of the claims that he had defrauded investors out of millions of dollars through the creation of a Ponzi scheme in Alabama between 2009 and 2012.
He applied for and was granted several extensions to provide submissions. Hearings were held in late 2020 before a decision dated Jan. 18 was released.
Durkin disputed his involvement and claimed he and his company were unsuspecting pawns in the scam.
In February 2022, the U.S. Department of Justice in Alabama dismissed all criminal charges against Durkin for a number of reasons, including the fact Durkin had lived in New York at the time and did not meet or deal with any of the investors in Alabama.
However, in his decision, Immigration and Refugee Board of Canada adjudicator Trent Cook did not find Durkin’s version of events to be credible.
“The only reason Mr. Durkin did not stand trial was because he left the United States,” he wrote.
He also rejected Durkin’s submission that the charges being dropped should impact the admissibility proceedings as a criminal conviction is not required, all that is required is the presence of a criminal organization and a person’s membership and/or the commission of criminal activities on this organization’s behalf.
“I do not believe that Mr. Durkin was unaware of the Ponzi scheme. He may not have initiated the scheme and he may not have been as active as others in terms of investor recruitment, but he was a hearty participant whose role was critical to the scheme’s success.”
The decision can be challenged through a judicial review.
Durkin was also the subject of a B.C. Securities Commission (BCSC) ruling this month. On Jan. 23, the BCSC panel found Durkin, a director of SHH Holdings Limited, had defrauded an investor out of $1 million by lying and being deceitful about the ownership of the well-known Sooke hotel.
“Durkin told the investor that SHH owned all of the shares of the Sooke Harbour House hotel through a subsidiary, and that by buying 40 per cent of its shares, the investor would obtain a 40 per cent ownership interest in the hotel,” reads a statement by the BCSC.
“In reality, at that time, SHH did not own any of the shares in the corporation that owned the hotel.”
The $1 million has not been recovered.
Back in 2020, the B.C. Supreme Court awarded Frederique and Sinclair Philip more than $4 million for what it called a “six-year odyssey of lies, excuses, threats, intimidation and bullying” by Durkin and his partner.
The couple built, owned and operated the Sooke Harbour House for more than 35 years before deciding to sell in 2012 and retire. After three failed deals, they chose to sell to Durkin and his partner in 2014 and were led to believe they would get $2 million, as Durkin claimed SHH Holdings had the funds to cover the mortgage and interest owed on the property.
“They thought they had found honest and reputable business people who would comply with their contractual obligations and pay for the hotel,” Justice Bill Basran stated in his 2020 94-page ruling.
“The Philips’ reasonable expectation of a comfortable and well-deserved retirement has been effectively stolen from them because they unknowingly put their future in the hands of these two fundamentally dishonest individuals.”
That hasn’t been Durkin’s only court battle.
Timothy Durkin filed a $50-million civil suit in August 2020 after an account impersonating him and alleging his involvement in a U.S. Ponzi scheme popped up on Facebook.
Facebook, now known as Meta, has since tried to convince the B.C. Supreme Court to throw out the claim. In a May 2021 application, Meta argued Durkin’s claim and its enormous price tag are a publicity stunt and abuse the process of the court. Meta called this “scandalous, frivolous or vexatious.”
Justice John Steeves disagreed in his August 2022 decision, stating he believes Durkin’s claim was intended to have the imposter account removed, not just to stir up media coverage.
In its application to have the lawsuit dismissed, Meta also said Durkin’s claim fails to comply with Rules of Court.
Here, Steeves agreed, noting that the current claim doesn’t cover the four elements of negligence and lacks evidence on how Durkin’s privacy was breached and what, if any, damage was caused as a result.
Still, Steeves said the court must allow some leniency for self-represented individuals, who don’t know the ins and outs of the law. He concluded Durkin should be given the opportunity to amend his claim and did not dismiss the lawsuit.
-With files from Jane Skrypnek and Chris Campbell
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