Sorry, you can't buy a used car from this man

When we last left Anwar Badshah in January 2008, his job as an investor-relations consultant for Vancouver junior companies had taken a turn for the worse.

B.C. Securities Commission enforcement staff had alleged that Badshah and his company, Badshah Communications Group Ltd., had sold $2.2 million worth of promissory notes to at least 150 investors, most of them B.C. residents.

Investors were told the money would be used to buy various stocks, which would then be delivered to investors. Investors were typically promised a 100-per-cent return over a specified period of time.

However, commission staff alleged that Badshah didn't use the money to buy shares. Rather, he used it for personal expenses and to make payments to earlier investors, in classic Ponzischeme fashion.

The commission further alleged that the notes were not registered for sale in B.C., and Badshah was not registered as either a broker or adviser, so he was operating illegally.

At the time, Badshah was providing investor-relations services for several bottom-feeding companies listed on the TSX Venture Exchange and OTC Bulletin Board in the United States.

One was TSXV-listed Winfield Resources Inc., headed by Vancouver promoter Michael Foley, one of the most creative storytellers I have met.

In this instance, Foley was spinning a tale about a multi-billion-dollar oil project that Winfield was supposedly developing in Libya.

The combination of Foley's tall tales and Badshah's promotion had the desired result.

The share price rocketed from 10 cents in May 2007 to a high of 73 cents in August 2007. Volume was heavy: On some days it exceeded four million shares.

But it was all for naught. The commission soon stepped in and forced Foley to admit that his sensational announcements were based on "verbal assurances" and "non-binding expressions of interest," and he had no documentary evidence to support them. TSXV officials eventually ushered the company off the exchange.

Meanwhile, the law caught up to Badshah's investment scheme. In December 2008, he was charged with defrauding three people of a total of $61,600, and in September 2009, he pleaded guilty in Port Coquitlam Provincial Court.

Crown prosecutor Mark Canofari described how Badshah enticed investors through radio and print-media ads. He assured them that, because he had access to publicly traded companies, he could deliver a 100-per-cent return within a few months.

It soon became obvious, however, that he couldn't provide the promised returns, and the only way he could repay earlier investors was to borrow more money from new investors.

Problem is, when you borrow money from somebody knowing you can't pay them back, that's fraud.

Canofari asked for an 18-to 24-month jail sentence, but the judge noted that Badshah was working as a car salesman, and if he was incarcerated, he wouldn't be earning money to pay back his victims.

So reluctantly, he sentenced him to 18 months of house arrest.

"No two licks at the lollipop here," the judge told him. "I meant you to go to jail. You are only not in jail because of the conditions [of house arrest]. ... If you screw up, you mess up, you breach, it is coming back to me and bring your toothbrush because I will lock you up. Have you got that straight?"

"Yes," Badshah replied.

As events unfolded, the judge may as well have sent him to jail, because he lost his job anyway.

He neglected to tell the provincial licensing authority for car dealers about his legal troubles, as he is required to do.

In fact, when it came time to renew his licence, he answered "no" to specific questions about whether he was the subject of any criminal or administrative investigations or charges.

In September, the B.C. Registrar of Motor Dealers, Ian Christman, revoked Badshah's licence and decreed that he couldn't reapply until three years after his conditional sentence expires in March.

But that was not the end of Badshah's woes. This week, the commission announced that, because he had been convicted of criminal fraud, the commission would automatically and permanently bar him from working or dealing in the securities market.

That means he can no longer promote miserable little companies like Winfield. Thank goodness for small mercies.

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In another enforcement action this week, the BCSC cited Jo Ann Nuttall for allegedly lying to investigators.

The commission said that, during a Sept. 7 interview, enforcement staff asked Nuttall whether she had placed any trades over the last six months. "Not that I'm aware of," she replied.

They also asked how she placed trades: "I don't recall what ... any of that. So obviously I probably haven't done it for a bit," she answered.

In fact, the commission alleged, she had placed two trades that very morning, another on Sept. 3, two more on Sept. 2 and another 13 in August.

On this basis, the commission issued a notice of hearing alleging she had lied to investigators, and ordered her to appear before a commission tribunal on Feb. 4 to set a date for a hearing.

The notice gives no indication of who Nuttall is, or why she was being interviewed. But one thing is clear: the commission is cracking down on people who have allegedly lied under oath.

Last November, five Vancouver-area people were banned for six years each after they lied about the circumstances under which they acquired shares of a bulletin-board rig job called Sungro Minerals Inc.

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