A convicted fraudster and his company who had been permanently banned in Ontario capital markets have now received the same penalty from the British Columbia Securities Commission.

All told, Richard John Smith, president, director, secretary and treasurer of Synlan Securities Corp. and his company cheated 45 investors in Ontario and B.C. out of more than $2.4 million.

The BCSC said Thursday that Smith and his company have been permanently banned from the B.C. capital markets and ordered to pay $750,000 in administrative penalties for violations of the Securities Act, including failure to be registered as required under the Act and for distributing securities without a prospectus.

A BCSC panel said Smith and his company showed “a pattern of deceit and disregard for securities regulatory requirements.”

“Their conduct is serious, they have harmed investors, and have damaged the integrity of British Columbia’s capital markets,” the panel said in its decision. “They are not fit to participate in our capital markets. We must also make orders that will have the appropriate deterrent effect.”

In December 1997, Smith pleaded guilty to 22 counts of theft over $5,000 and 10 counts of fraud and was sentenced by Ontario provincial court to two years less a day in prison for a scheme involving sales of limited partnership units in a proposed downtown Toronto residential real estate development. He and a company withdrew investors’ money before several of the deal’s conditions had been met and continued to sell units to other investors. Thirty-one investors lost almost $1.8 million.

Smith did not disclose the charges or convictions to the Ontario Securities Commission in 1997 and 1998, which subsequently permanently banned him and Synlan from the Ontario capital markets.

Around the same time, Smith and Synlan also formed three partnerships to raise money for residential developments in Arizona and Florida and sold partnership units to 14 B.C. residents. Smith held his own sales seminars and paid financial author and radio personality Brian Costello to promote the partnerships.

The homes were never built and the partnerships did not return the funds they collected from investors, who lost about $600,000.

The panel found that Smith engaged in deceit by leading investors to believe that a $15,000 promissory note that each investor signed would be paid off by the cash from the investment. The panel also determined that the investment terms violated the Securities Act because $44,000 required of each investor fell short of the $97,000 minimum investment the law required of each investor. That minimum investment from each investor was necessary before Smith and his company could exclude themselves from regulatory requirements that they be registered to sell securities and file a prospectus.

Smith was also permanently prohibited from becoming an officer or director of any company issuing securities other than one he or his family solely owned and from engaging in investor-relations activities.