Avtar Singh Dhillon has been sentenced to jail time for a pump-and-dump stock fraud and ordered to pay back illicit profits and fines of nearly $1.5 million US
Former B.C. stock promoter Avtar Singh Dhillon has been sentenced to jail time for a pump-and-dump stock fraud and ordered to pay back illicit profits and fines of nearly $1.5 million US.
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Dhillon, 63, a Canadian who lived in B.C. for years and formerly headed up a medical cannabis company headquartered here, now lives in Long Beach, Calif.
Dhillon earlier pled guilty to several charges related to his sentence, including one count of willful failure to disclose stock sales, and one count of aiding and abetting the sale of unregistered securities.
In a pump-and-dump scheme, low-priced stocks, often called penny stocks, are amassed secretly by owners and sold at inflated prices through false promotions. The stocks are then dumped at a profit at the expense of unsuspecting investors.
According to the U.S. Attorney’s Office for the District of Massachusetts, Dhillon and his then-attorney, Daniel V. Martinez, placed 2.75 million of Arch Therapeutics shares that Dhillon beneficially owned into a limited liability company that Martinez created.
Dhillon and Martinez then worked together to sell the shares in the open market without a valid exemption under the relevant securities laws and to distribute the approximately $1.34 million in proceeds.
The proceeds were distributed primarily to third parties for Dhillon’s benefit, with a small portion distributed to Martinez directly. “Dhillon thereafter willfully failed to report the stock sales to the U.S. Securities and Exchange Commission and the investing public, as he was required to do,” said the U.S. Attorney’s Office.
While Dhillon now lives in the U.S., he and his wife own more than $24 million in property in Metro Vancouver through two numbered companies, 0826239 B.C. Ltd. and 0827277 B.C. Ltd., according to information from B.C.’s Land Owner Transparency Registry and the B.C. Assessment Authority.
The eight properties include two pieces of farmland in Richmond on Lulu Island and six empty pieces of properties in an agriculture area adjacent to the DeBoville Slough in Coquitlam.
The recent fines brings the total that Dhillon must pay to more than $11.6 million US.
The Securities and Exchange Commission had found that Dhillon had worked with Sharp and others who had been accused of hiding the beneficial ownership of millions in shares with domestic and offshore shell companies.
Many of those involved in that scheme admitted guilt or were found guilty in 2023.
In a recent case filed in B.C. Supreme Court, cannabis grower Krishansarup Kallu alleges that he lost money because Dhillon and Sharp used a takeover of B.C.-based medical marijuana company Emerald Health Sciences by a U.S.-based company to enrich themselves.
Neither Sharp nor Dhillon have responded in court to that suit.