A British Columbia Securities Commission (BCSC) hearing panel has found that a man and three real estate development companies, where he was president and a director, committed fraud when money was diverted from the companies for his personal use.

The panel ruled that Rodney Wharram, and the three companies (West Karma Ltd., Falls Capital Corp. and Deercrest Construction Fund Inc.) committed fraud when more than $500,000 was diverted from the companies for Wharram’s personal expenses.

While the respondents indicated that the funds were to be repaid, the panel noted that, “repayment of any amount improperly taken is not relevant to the determination of whether the respondents committed a prohibited act.”

“We find that the prohibited acts caused deprivation. The investors have lost all the money Wharram used for personal purposes. There is no evidence of repayment. Even if there were evidence of repayment, the prohibited acts put the investors’ money at risk of deprivation, which meets the deprivation element of fraud,” the panel said. Additionally, the panel also found that Wharram made false statements to commission staff.

However, the panel also dismissed an allegation that Deercrest, West Karma and Wharram failed to advance “a majority of” the proceeds raised by Deercrest to a prticular development project. It ruled that there wasn’t enough evidence to support this charge.

The panel directed the parties to make submissions on sanctions.