A BC Securities Commission panel has found that a former insurance sales agent had perpetrated fraud on 13 investors by pocketing their money for personal use.
The panel found that Lynne Rae Nickford, aka Lynne Rae Zlotnik, managed to persuade 13 investors to loan or invest almost $2 million in her company, LZ Wealth Management, in 2009 and again in 2010. She told investors that the money would be used for the company’s operations and to help grow the business.
In some cases, Nickford offered investors rates of return between 12% and 16%; one investor was to receive 25%. Nickford issued either promissory notes or “private-investment” documents that promised the returns.
But Nickford spent at least $318,000 of the investment she received on personal expenses, which included personal loan payments, personal expenses and cash withdrawals in Las Vegas and local casinos, as well as payments to local casinos, a panel report noted.
The panel concluded that the investors’ funds were put at risk since the money was not used as intended.
“With the subsequent bankruptcy of the respondent and her business, the investors’ funds were lost,” the panel said in its decision.
The panel’s decision comes five years after the allegations were formally filed by the securities commission, Vancouver Sun reported.
Nickford, in her defense, argued that she was suffering from mental and physical illness during the period between 2008 and 2010. She suggested that had she not been ill, she would have been able to handle her business.
The panel dismissed this argument, saying that the medical evidence did not establish that she was actually suffering from any debilitation during the period.
The panel also noted in its decision that BC Lotteries officials told the commission that Nickford was considered one of the top 1% of slot players at the Edgewater Casino in Vancouver, spending amounts of $5,000 to $10,000 a day.
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