A British Columbia man has agreed to a three-year ban along with financial sanctions for his role in a massive Ponzi scheme.

The B.C. Securities Commission (BCSC) announced that it has settled with Keith Henry Alexander, who admitted to unregistered trading and an illegal distribution of securities, in connection with his efforts to raise funds for the Little Loan Shoppe, which was “a Ponzi scheme masquerading as a payday loan business,” according the provincial regulator.

In its settlement with Alexander, the BCSC alleges that Doris Nelson, who is facing allegations of fraud, illegal distribution, and misleading the BCSC, masterminded the scheme. That enforcement proceeding is ongoing in a separate hearing and the allegations have not been proven.

However, in 2014, Nelson pled guilty in U.S. court to 110 counts, including charges of wire fraud, mail fraud and international money laundering connected to the Little Loan Shoppe. She was sentenced to 108 months in prison followed by three years of supervision.

According to U.S. authorities, the scheme ran for more than eight years and took in approximately US$137 million from at least 650 investors in Canada, the U.S. and Mexico.

The BCSC’s settlement with Alexander indicates that he raised $1.44 million from 13 investors for the scheme in 2007 and 2008, under legitimate prospectus exemptions. However, he also took $20,000 from one investor who did not qualify for an exemption, which represented an illegal distribution. He also admitted to using investor funds to buy promissory notes from the Little Loan Shoppe in the names of companies he set up and, in turn, issuing promissory notes to the investors.

Ultimately, the scheme collapsed in 2009 and investors stopped receiving payments. The BCSC notes that Alexander lost his own money in the scheme and it says that he also paid back $143,000 to other investors — both of which are cited as mitigating factors in the settlement.

To settle the case, Alexander agreed to pay $7,500 to the BCSC along with the $20,000 that he obtained as a result of his misconduct. In addition, he is banned from the securities markets for three years.