Victims of a Victoria investment fraudster get some payback

A small payday is coming for more than 480 investors, most of whom were seniors, who were defrauded of $65 million by a Victoria man.

Former mutual fund dealer David Michaels was convicted by the B.C. Securities Commission nearly five years ago and banned from the industry for fraudulently advising clients and selling them exempt securities.

"The money is often all gone [in cases like this]," said Doug Muir, the director of enforcement for the BCSC.

"So this is an example of a good result to get some money back to investors." The average age of investors who lost money was 72.

Unlikely to see a full return

The victims are unlikey to get back all of the money they lost.

Michaels was ordered to pay $23.3 million in fines after losing an appeal in 2016, but the commission has only been able to get $1.1 million so far.

Investors will get a pro-rated share of that money, collected from a cash payment and the sale of Michaels' property in Hawaii, based on how much they lost.

"Unfortunately, one of the terrible consequences of investment fraud is that people often lose money," Muir told All Points West host Robyn Burns.

Muir said the commission will continue to try to collect more money from Michaels, but they are unaware of any other assets he might have.

Michaels made $5.8 million in fees and commissions from the fraud, according to the securities commission.

"It's very important that people do their homework, understand who they're investing with and what background information they can find," said Muir.

Those defrauded by Michaels will be contacted by mail or email by the B.C. Securities Commission court-appointed receiver, Grant Thornton Limited, about accessing available funds.

The deadline for people to respond is May 31.