Stealing money

The perpetrators of a real-estate development scheme that ultimately defrauded investors of over $3.4 million are being sanctioned by the Alberta Securities Commission (ASC).

In 2023, an ASC hearing panel found that Ali Ghani and various companies involved in developing a strip mall in Edmonton’s Summerside neighbourhood — including Summerside Development Trust, Summerside Commercial Trust, Prism Summerside LP, Prism Summerside Development Corp. and Prism Real Estate Investment Corp. — misappropriated millions from investors.

The funds were diverted to other companies controlled by Ghani, resulting in losses to investors.

The panel noted that the companies’ practice of spreading investors’ funds to various other failing projects was not disclosed to investors.

“The Prism real estate projects ongoing at the time — including Summerside Plaza — were ultimately sold at a loss, and investors received neither a return of their investment capital nor payment of any returns,” it said.

Now, following a hearing on sanctions, the regulators ordered Ghani and various corporate entities to pay approximately $3.4 million in disgorgement, along with an administrative penalty of $325,000 and costs of $173,983.

In its decision, the panel noted that the respondents, which didn’t participate in the enforcement proceedings, “are likely all impecunious” and that none of the corporate entities are still in business, indicating that it’s unlikely that harmed investors will recover any of their lost investment funds — and that it’s unlikely that imposing a costs order against them will hurt investors’ prospects of future financial recovery.

Similarly, it said that “impecuniosity alone does not justify a nominal administrative penalty.”

“We are therefore satisfied that $325,000 is proportionate to the circumstances of the misconduct and the respondents, and that the order is in the public interest because of its deterrent, preventive, and protective effect,” it said.

Additionally, Ghani was permanently banned from the market.

“The respondents have lost the privilege of participation in our capital market,” the panel said, adding that director and officer bans against Ghani, “are appropriate because of his position as their directing mind and the directing mind of the Prism group.”