A former financial advisor has been convicted on six of the 10 counts of fraud that he was charged with, involving allegations that money he took from investors for insurance policies and investments wasn’t used as promised, depriving investors of their funds.
Following a trial, Justice Jennifer Campitelli of the Ontario Court of Justice found former rep Brian Kumar guilty on six counts of fraud — totalling $1.09 million (although $339,000 of that total was paid back to victims). He was acquitted on four other fraud charges.
According to the court’s decision, the Crown alleged that Kumar defrauded various investors between the start of 2011 and the end of 2018 through various mechanisms.
The court said that Kumar “adamantly denies these allegations, refuting any suggestion he engaged in any fraudulent or dishonest behaviour.” He insisted that he entered “fully informed contractual agreements” with the investors, and that two of the complaints were addressed in a prior settlement with the Investment Industry Regulatory Organization of Canada (IIROC).
In 2015, Kumar was permanently banned and fined $50,000 in a settlement with IIROC. That settlement included admissions that between Feb. 2013 and April 2014, while he worked at National Bank Financial Inc., he improperly transferred $1.45 million of clients’ money into his own brokerage account without their approval.
According to the settlement, Kumar traded those assets and generated positive returns, ultimately repaying $1.6 million to the clients. Nevertheless, he was sanctioned for violating IIROC’s rules.
In its decision, the court rejected the claim that the investors were compensated as part of the IIROC settlement, and he was convicted on that count. The court said that a pair of clients provided him with almost $1.5 million, which was supposed to be invested in insurance policies with Sun Life — but, the court found that only $731,000 was advanced to Sun Life.
“By failing to deposit those funds with Sun Life, Mr. Kumar placed the life insurance policies held by [the investors] at risk, and they ultimately lapsed,” the court said.
As for allegations involving four other investors, the court also found that the evidence established fraud in connection with various investment schemes, including options trading, that involved promissory notes between the investors and Kumar.
“… I have determined that the only reasonable inference available on this record is that Mr. Kumar did not invest the funds as promised,” the judge said.
However, the court declined to convict on four of the counts alleged, including one of the promissory note victims, finding that while the investor was credible, her evidence wasn’t reliable due to memory issues.
The other counts rejected by the judge included loans that allegedly weren’t repaid. While people lost money as a result of those transactions, the failed loans didn’t amount to fraud, the court said.
“These were personal loans requested of friends and family wherein Mr. Kumar indicated to them he was in financial need … Unfortunately, many of those funds were not returned; however, that reality standing alone does not make the related transactions fraudulent,” it said.
Prior to the start of the fraud trial, Kumar sought a stay of the case — which was originally filed in 2021 — alleging that his right to a speedy trial, under the Charter of Rights and Freedoms, was violated.
The court dismissed that argument, finding that most of the 1,633-day delay was attributable to the defence (1,108 days), and that the Crown was only responsible for 525 days of delay. It also noted that the trial was ultimately completed in just under the 18-month limit established by the Supreme Court of Canada for provincial court trials.