A Thornhill, Ont.-based insurance agency, whose British Columbia registration was revoked earlier this year after B.C. regulators deemed it to be untrustworthy, incompetent and “an ongoing risk to the public,” is still selling insurance products in Ontario.

For Jerry Matier, executive director of the Insurance Council of B.C. , which revoked the registrations of Trillion Financial Corp., Billion Financial Corp.and their president, Kalano Jang, in March, the regulatory disconnect should be worrisome to consumers.

“The fact that an individual can be subject to a licence termination in one jurisdiction,” he says, “and is able to remain licensed in another jurisdiction — and Canadian insurance companies still deal with him — should be a concern to the insurance-buying public.”

Matier says that he sent copies of the ICBC’s decision to the responsible regulatory body in Ontario, the Financial Services Commission of Ontario, within days of the revocations of the licences. But there is no indication FSCO is moving to impose reciprocal orders. Rowena McDougall, FSCO’s senior manger of public affairs, has refused to comment on the matter, other than to say FSCO “works closely with other regulators.”

Tim Armstrong of Ladner, B.C., a former client who became one of Jang’s victims, notes it has been eight months since the ICBC effectively shut down Jang’s insurance agencies in B.C. “If it was proven that he improperly sold insurance products [in B.C.],” he asks, “why is he allowed to sell them in Ontario?”

According to Trillion’s Web site, its Toronto head office is located in Thornhill and its Vancouver office is in Richmond, B.C.

“Over the past 11 years, Trillion Financial Group has grown and prospered to become one of Canada’s premier organizations in providing financial services and insurance products to culturally diversified communities across Canada,” its Web site states. “TFG manages a base of more than $600 million in client investments developed through its network of financial advisors across Canada. TFG’s relationship with many of Canada’s largest financial services corporations has helped TFG build and provide a broad range of products and services that cater to all of our clients’ needs.”

Among the insurance products that Trillion and Billion sold was a life insurance/investment product designed by Transamerica Life Insurance for high net-worth clients. Ideally, clients are business owners or individuals with substantial taxable income and liquid assets. Transamerica strongly encourages its agents to have their clients seek professional advice to determine whether the strategy works for them.

According to the ICBC, Transamerica determined that Jang and his companies disregarded these selling guidelines. Consequently, in June 2006, the Transamerica terminated its relationship with them.

The ICBC conducted an investigation, which culminated in the ICBC revoking the registrations of Jang and his two companies in March of this year.

In the ICBC’s decision, it noted it had interviewed six clients (one of whom was Armstrong) and found the Transamerica plan was not suitable for any of them. The clients didn’t have a lot of assets, didn’t earn high incomes, weren’t business owners and didn’t have any need for a tax-sheltering plan.

The ICBC also found the manner in which Jang counselled his clients to take out loans on their insurance policies each year and invest the proceeds in new segregated fund accounts, then redeposit the monies back into their policies the following year, amounted to a “commission-driven scheme.”

Jang also encouraged clients to take out loans and invest the proceeds with an Ontario lawyer named Ming Ngoc Pham. Although Jang assured clients this was a solid investment, the clients didn’t receive their interest payments as scheduled. One client didn’t receive any interest payments, and his original investment was never returned to him, the ICBC noted.

The ICBC concluded Jang and his two companies “are not trustworthy or competent, and cannot be relied upon to conduct insurance business publicly in good faith and in accordance with the usual practice.”

The ICBC had intended to hold a hearing and seek five-year suspensions against each, but because Jang and his associates “posed an ongoing risk to the public,” their registrations were revoked immediately, in advance of a formal hearing. Matier says Jang had asked for a hearing, but Jang has not pursued the matter.

Even though Jang and his companies are prohibited from selling insurance products in B.C., Trillion still maintains an office in Richmond. Investment Executivecalled the office on Nov. 20 and asked the receptionist whether the firm is selling life insurance.

@page_break@“Yes,” she replied. “I will pass your name to somebody.”

Matier says that he sent a copy of the ICBC decision to his regulatory counterparts in other provinces, and to every insurance company in Canada, several days after the ICBC revoked Jang’s and his companies’ licences. However, not only are Jang, Trillion and Billion still licensed in Ontario, some Canadian insurance companies — Matier didn’t know which ones — are still providing insurance products for them to sell.

An interesting sidebar is that Jang and his son, Kalson Jang, who serves as chief operating officer of Trillion, and several associated parties were heavily involved in a Toronto-based junior public company that has evolved into a horrendous scandal.

Pender International Inc. shared the same Thornhill address as Trillion. Kalson Jang was Pender’s chairman; Ming Ngoc Pham, the Ontario lawyer who figured in Trillion’s investment scheme, served as director. Michael Ciavarella, who worked as a financial advisor for Trillion, served as Pender’s president.

In October 2004, Pender acquired a company called IMM Investments Inc., indirectly owned by Kalano Jang. In return for the company, Jang got a 36.5% interest in Pender, making him the company’s largest shareholder.

IMM’s only asset was a flooded gold mine near Kirkland Lake, Ont., but IMM’s stock, which traded on the loosely regulated OTC Bulletin Board in the U.S., rocketed from pennies to a high of US$11.35 in October 2004. Then, just as suddenly, it collapsed.

In December 2004, the Ontario Securities Commission issued a notice of hearing, alleging several private companies, all related to Pender insiders, had manipulated IMM’s share price by trading the stock back and forth at ever-increasing prices.

One of those companies is alleged to be Firestar Capital, whose principals were Kalson Jang and Ciavarella. The OSC further alleges that Ciavarella gave trading authority to Michael Mitton, a notorious con man who has garnered no fewer than 103 fraud convictions and has been banned for life from the B.C. securities market. The OSC has issued cease-trade orders against Ciavarella, Mitton, Firestar and several other companies involved in the questionable trading.

In September 2006, the RCMP’s integrated market enforcement team in Toronto charged Ciavarella and Mitton with fraud, conspiracy to commit fraud, laundering the proceeds of crime, possession of proceeds of crime and extortion.

In March 2007, Mitton was convicted and sentenced to seven years in jail. Ciavarella is still awaiting trial.

Despite Kalano and Kalson Jang’s close involvement in Pender, neither was accused of any wrongdoing. Both are still registered as insurance brokers in Ontario and both are still working as Trillion’s most senior officers.

Neither could be reached for comment. IE