The British Columbia Securities Commission has banned two individuals from buying or selling securities after they admitted to soliciting funds from investors for a failed investment scheme.

The scheme, called the Pay it Forward Program, raised approximately $9.6 million from 943 investors between November 2005 and April 2007.

In a BCSC settlement agreement published this week, Kerry John O’Neill, a Richmond resident, admitted to being the principal of the scheme. O’Neill admitted that he told investors that their funds would be used to buy and sell distressed merchandise, and they could expect between 100% and 300% return within 90 days.

O’Neill admitted that he committed securities fraud when he used just under $1.1 million of investors’ money to purchase merchandise, approximately $6.4 million to pay amounts due to other investors, $56,000 for his personal expenses, and $213,000 for other investment opportunities.

Most investors in the scheme lost some or all of the invested capital, according to the BCSC.

Under the settlement agreement, O’Neill is permanently banned, except in limited circumstances, from buying or selling securities. He is also permanently prohibited from acting as a director or officer of an issuer, registrant, or investment fund manager, acting as a manager or consultant in connection with securities industry, and engaging in investor relations.

In a separate settlement agreement, Renee Marie Helmig, a North Vancouver resident, admitted that she used false information provided by O’Neill to make misrepresentations to investors and potential investors to convince them to invest in the scheme.

For her role in the investment scheme, Helmig is banned for 10 years, except in limited circumstances, from buying or selling securities. She is also prohibited for 10 years from acting as a director of officer of an issuer, registrant, or investment fund manager, acting as manager or consultant in connection with the securities industry, and engaging investor relations.

The BCSC acknowledged that fines up to $500,000 would have been assessed as part of the settlement with the two individuals, but said there was “no reasonable prospect” of the individuals paying such fines. The settlement agreement noted that both O’Neill and Helmig have been unemployed since the Pay it Forward program ended.