A Vancouver man who withdrew $504,095 from his company’s bank accounts that had apparently been “frozen” by the B.C. Securities Commission has been sentenced to 90 days in jail after pleading guilty to failing to comply with an order.
A Vancouver Provincial Court judge sentenced Scott Thomas Low, 75, on Dec. 19 and ordered him to repay the commission the money.
Low must also complete 60 hours of community work service and is subject to 12 months of probation, Judge Reginald Harris ruled.
Harris said the violation of the freeze order "was the last of dishonest manoeuvres by Mr. Low as opposed to an isolated error in judgment."
The judge accepted that Low was remorseful for his actions, saying he is a low risk to reoffend.
"He is not a danger to the community," Harris said.
The sentence is to be served intermittently on weekends, the judge ordered.
In 2016, the commission froze bank accounts associated with Low’s FS Corporate Group, including accounts held by 3i Capital ClearPath Limited Partnership and FS Financial Strategies Services Inc.
But, the commission noted in a statement Friday, “Low also admitted that, in 2018, he went to a branch of the bank, met with an employee there and withdrew $504,095 from three frozen corporate accounts.
“Low provided the bank drafts to a B.C. lawyer, who was defence counsel for the FS Corporate Group at the time. The lawyer deposited the bank drafts to his trust account, and the proceeds were subsequently used to pay for expenses on behalf of the FS Corporate Group,” the commission stated.
In 2020, a commission hearing panel found that Low, Aik Guan “Frankie” Lim and the FS Corporate Group committed misconduct. It ordered Low to resign as director or officer of any issuer or registrant, permanently banned him from the investment market and imposed a $2-million administrative penalty that Low has yet to pay, the commission stated Friday.
When the commission demanded that the bank hand over the money in the frozen accounts, it discovered the missing funds, prompting the BCSC Criminal Investigations Branch to launch an investigation.
Harris said the bank has given no explanation for releasing the funds.
The commission said freeze orders, now called preservation orders, prevent a person from transferring property, which could include money, physical property and investments.
Glacier Media has asked the commission to explain how such orders work precisely; are accounts not actually blocked at the bank? Are banks not informed of the orders? If banks are informed, how was Low able to withdraw money? Are such instances reported to the Financial Consumer Agency of Canada (FCAC) and the Office of the Superintendent of Financial Institutions (OSFI)?
Glacier Media will update this article if the commission responds.
