The British Columbia Securities Commission (BCSC) has handed down a $2 million fine, a permanent market ban, and ordered almost $650,000 in disgorgement against a man that, it says, carried out a fraudulent investment scheme around a failed ski resort development.

A BCSC panel found that Robert Stephen McHaffie committed fraud when he raised approximately $642,960 from 30 investors through the sale of shares in a company, BigFoot Recreation & Ski Area Ltd., that was supposed to be developing a recreation and ski resort.

The commission says that the company never filed a prospectus in B.C., and McHaffie has never been registered to sell securities. It also found that McHaffie made false statements to entice investors, including a pledge that the company would be going public. Instead, it says that he used investor funds to pay for personal expenses, including gas, restaurants, groceries and retail purchases. And, it notes that he raised over $100,000 from investors even after BigFoot’s ski resort proposal was rejected by the provincial government in September 2010.

“McHaffie lied to investors in order to induce them to invest in Bigfoot. He fraudulently misused the funds he raised from investors. Fraud strikes at the integrity and reputation of our markets,” it said in its decision, adding that there’s no indication that investors will be able to recover any of their funds.

The decision indicates that neither the company, nor McHaffie, appeared at the hearing, or was represented by counsel. The panel went ahead and dealt with both the merits of the commission’s allegations and the sanctions together.

As a result of its findings, it permanently prohibited McHaffie and BigFoot from trading, registration, engaging in investor relations, and from acting in a management or consultative capacity in connection with the securities market. It also permanently prohibited McHaffie from acting as a director or officer of any issuer or registrant. It also ordered them to pay $642,960 in disgorgement, and it ordered McHaffie to pay an administrative penalty of $2 million.

In setting the administrative penalty, the panel noted that it “followed earlier precedents in which a multiplier of three was applied to the amount raised through the fraud.”