Tanzanite - AMF files 144 charges and seeks fines totalling over $2 million
Securities
Montréal - The Autorité des marchés financiers (the AMF) has launched penal proceedings against Claudé Hamel, Carole Bellemare, Bernard Dropsy and CD2i Coopérative de services en développement international, and is seeking fines totalling $2,220,000.
$1,815,000 in fines for Claudé Hamel
More specifically, the AMF has filed 119 charges against Claudé Hamel, the Montréal business partner of Nil Lapointe, the sole officer of Tanzanite Inc. and Tanzanite 2005 Inc. The AMF accuses Claudé Hamel of aiding Tanzanite Inc. and Tanzanite 2005 Inc. with making distributions without a prospectus on 57 occasions and acting as a securities dealer without being registered as such on 58 occasions. The AMF also accuses him of making misrepresentations regarding securities transactions on four occasions, by letting investors believe that their investments were guaranteed.
The AMF is seeking fines totalling $1,815,000 in respect of Claudé Hamel. Several aggravating factors warrant such a fine. These include the high number of victims, investor losses, profit sharing and the fact that it would be impossible to reimburse investors.
In this matter, the AMF has also filed charges against two other individuals for illegally pursuing activities as securities dealers and aiding with illegal distributions. Carole Bellemare, assistant to Nil Lapointe, faces nine charges for which the AMF is seeking fines totalling $85,000. Bernard Dropsy, the president and major shareholder of CD2i Coopérative de services en développement international, faces 10 charges and $170,000 in fines.
The AMF also filed six charges for illegal distributions in respect of CD2i Coopérative de services en développement international for which it seeks fines of $150,000.
In this matter, investors signed loan agreements with Tanzanite for a minimum amount of $10,000, for terms from one to five years, with a monthly return of 5% and the ability to receive the interest each month or reinvest the interest. Interest payments were almost always made in cash.
Some lenders in the Tanzanite matter were offered an opportunity to transfer a minimum amount of $50,000 from their RRSPs to a group RRSP managed by Bernard Dropsy's cooperative, thereby generating higher interest than what was available on the market by investing in wines or in debentures of a company registered in Panama.
The AMF's investigation indicates that investors' losses for which charges have been filed are close to $3 million.
The Autorité des marchés financiers ("AMF") is the regulatory and oversight body for Québec's financial industry.
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