The U.S. Securities and Exchange Commission is continuing its dogged legal pursuit to take back tens of millions of dollars from British Columbians who took part in a $1 billion dollar stock fraud scheme orchestrated out of Vancouver between 2011 and 2019.

The commission filed a civil claim in B.C. Supreme Court June 10 against six B.C. residents who have been ordered, via U.S. federal court judgments, to pay back more than US$50.9 million (CAD$72.1 million) of illicit profits to American investors.

The commission is seeking approval from the Canadian court for recognition and enforcement of the U.S. judgements via the Foreign Money Claims Act.

The claim comes after a lengthy but ultimately successful legal battle against Fred Sharp, the 73-year-old West Vancouver man the commission alleged in 2019 to be the scheme’s “mastermind.”

Sharp was found liable for committing fraud in civil proceedings on May 12, 2022 after not putting up a defence. He was ordered to pay back $28.9 million, including $7.2 million of pre-judgment interest.

The commission pursued seizing Sharp’s assets in Canada in July 2022, which is when Sharp first put up a defence in court, via criminal defence lawyer Joven Narwal.

Despite claiming he was never properly served in 2019, Sharp lost both the original case and his appeal. He has since filed for leave to appeal at the Supreme Court of Canada and a decision is pending.

Sharp continues to face unproven criminal fraud charges in the United States. Those proceedings have yet to commence and there have been no active extradition proceedings against him.

Now, this month, the commission is going after five of Sharp’s associates. However it is only seeking to collect the disgorgement orders, and not the tens of millions of dollars of pre-judgement interest and penalties levied against them.

The commission is seeking: US$17.4 million from Paul Sexton of Lake Country; US$13.3 million from Mike K. Veldhuis of Vancouver; US$11.9 million from Jackson Friesen of Delta; US$4.3 million from Graham Taylor; $2.5 million from Zhiying Yvonne Gasarch of Vancouver; and $1.6 million from Courteney Kelln of Surrey.

The five individuals have yet to file a response to the claim.

Taylor is the only person of the six to have settled without admitting or denying fraud. He is also the only one to have paid some money back to the commission (US$425,965), according to the claim.

Sexton, Veldhuis and Kelln admitted liability to the civil charges that resulted in the judgments, but they still face unproven criminal charges.

Friesen and Gasarch denied liability and went to a 10-day jury trial in Boston in October 2024. The jury determined the two did commit fraud.

These five individuals are only some of the clients or co-conspirators Sharp worked with, according to the commission’s original claim.

According to the commission, Sharp solicited a network of groups of individuals who controlled US. penny stock companies. Then, using nominees Sharp concealed beneficial stock ownership through offshore shell companies and Swiss trading platforms to avoid reporting requirements and trading restrictions. His client groups then sold their shares to retail investors at elevated prices after surreptitiously promoting the companies.

Sharp is a former lawyer turned offshore shell facilitator via Panamanian corporate service firm Mossack Fonseca.

Sharp has been banned from the province’s markets by the B.C. Securities Commission but more than a dozen British Columbians from the so-called “Sharp Group” network have not to date.

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