British Columbia

'Smoking gun' leads to mistrial for man accused of taking cash from Ponzi schemer

A mistrial has been ordered in a civil suit against a bookkeeper accused of conspiring with a notorious B.C. Ponzi schemer after the discovery of "smoking gun" payments even greater than those imagined by the alleged victim.

Judge had sided with defendant before new evidence emerged about his relationship with Rashida Samji

Rashida Samji leaves court in Vancouver after being found guilty on 28 counts in a $110-million Ponzi scheme. (Jason Proctor/Twitter)


B.C. Supreme Court Justice Ward Branch took the extraordinary step of ordering a new trial for Naguib Dhalla months after dismissing a claim against the bookkeeper for allegedly receiving commissions from Rashida Samji.

Samji — known as the 'Magic Lady' for her ability to conjure up investors — is currently serving a six-year prison sentence for perpetrating a $110 million fraud on nearly 300 people.

Dhalla denied accepting money to send clients her way, but according to Branch's ruling, his alleged victim came across documents after a civil trial which showed Samji had paid Dhalla upwards of half a million dollars.

"Based on the evidence before me, the plaintiffs appear to have found a 'smoking gun'," Branch wrote.

"The only way to avoid a miscarriage of justice is through a new trial with the evidentiary gun in evidence."

Fraudster's testimony rejected

According to the original notice of claim in the case, Andreas Eric Manning invested $12 million with Samji between 2008 and 2011 "allegedly at least partly on the basis of Dhalla's advice, recommendation and encouragement."

The radiologist claimed he paid Dhalla, an accountant, as much as $10,000 a month to handle his financial affairs.

As part of Samji's scheme, investors were told a winery group needed collateral to get loans and credits to pay for its expansion.

Rashida Samji was known as 'the Magic Lady' for her ability to attract investors to a scheme that turned out to be a fraud.

Manning was allegedly told he would get a 12 per cent return on his investment.

Samji, a notary public, was supposed to keep the cash in her trust account. But instead, the money was used to pay other investors in her scheme.

Manning claimed he lost at least $8 million.

Dhalla denied the accusations and Branch said no documents were available at trial to contradict his testimony,

There was one witness who claimed he did receive commissions: Rashida Samji.

But the judge said he "preferred the evidence of the defendant over that of a convicted fraudster."

Documents 'squarely contradict' testimony

Last December, Branch ruled in the bookkeeper's favour, dismissing Manning's claim.

He gave oral reasons for his judgment, but the result had not yet been entered in the official record when new evidence came to light.

B.C. Supreme Court Justice Ward Branch dismissed a suit against Naguib Dhalla after a trial, but has now ordered a mistrial as a result of new evidence. (David Horemans/CBC)

Manning was provided documents from the B.C. Securities Commission containing a spreadsheet of payments and a letter containing calculations of amounts payable to Dhalla from the Magic Lady.

"On their face, these documents seem to squarely contradict the defendant's trial testimony that he did not receive commissions for placing the plaintiffs' funds into the scheme," Branch wrote.

"The amounts flowing to the defendants for the limited period covered by the new documents are in excess of $500,000, almost an order of magnitude greater than the $60,000 previously deduced by the plaintiffs."

Mistrials are rare and viewed only as a "last resort" which happens when the court concludes that no alternative measure will suffice.

Dhalla argued that a new trial wasn't warranted, claiming that Manning should have brought an application to introduce fresh evidence instead.

He also argued that his former client could have found the documents before the trial and that they were given in violation of an undertaking.

'A fraud on the court'

But the judge disagreed.

Branch said that the circumstances of the case would have warranted an order releasing the keeper of the documents from any undertaking because of the public interest.

"On the basis of the record before me, the new evidence suggests that the defendant perpetrated a fraud on the court in his testimony," the judge wrote.

Rashida Samji made her first appearance in a Vancouver court more than six years ago. She is now serving a jail sentence for fraud. (CBC)

Branch found that the information contained in the documents not only undermined Dhalla's claims, but may have constituted evidence he was "actively concealing the extent of his involvement."

The judge said evidence of significant levels of payment from Samji may also have cast a different light on Dhalla's claims that he and his family also lost money in the scheme.

"It appears the plaintiffs will now be in a position to argue that the defendant was earning more from the fraudster than from the plaintiffs," the judge wrote.

"In these circumstances, an objective observer would conclude that a trial in which the plaintiffs were deprived of the information generated by the defendant would be unfair."

Branch also ruled that a new judge should preside over the next trial.