A former Langley spiritual leader had stock trading allegations against him dismissed, but has been ordered to pay more than $400,000 to a Surrey family who lost much of their investment with him.
According to court documents, James Gravelle, formerly of the Bondservants of Elohim, arranged for Charlene Reimer to loan $228,000 to South Asian Post Media. Reimer’s son Matthew loaned a further $50,000.
Gravelle and Charlene Reimer were both members of a local religious group called the Bondservants of Elohim, of which Gravelle was a spiritual leader. Reimer had been going to spiritual meetings at Gravelle’s home for about a year before the loans.
In 2007, Reimer mentioned to Gravelle she was thinking of selling her house and downsizing. Gravelle suggested she should mortgage her house and invest the money instead. He arranged the transaction with the South Asian Post, in which he already had a considerable financial interest, according to the judgement of Justice Paul Riley.
At first all went well, and Charlene Reimer received 12 per cent annual interest, while Matthew Reimer received 10 per cent.
But after three years, the principal of the loans was to be paid off. Instead, there were extensions on the loan. Finally, payments stopped in 2012. After that, Gravelle paid $1,390 a month for 14 months out of his own company’s account, “believing that was the amount required to cover Ms. Reimer’s mortgage,” Riley wrote.
Those payments stopped in 2014, and the principal of the loan was never repayed.
Gravelle represented himself and testified in the lawsuit, but the judge did not find him as credible on the stand as the Reimers.
Riley wrote that Gravelle’s testimony about the financial arrangement was “imprecise, sometimes internally inconsistent, logically flawed, inconsistent with contemporaneous documents many of which were drafted by him…”
The Reimers sued both Gravelle, his company W.Y. ATAP Investments, and South Asian Post Media for breach of contract. South Asian Post was found at fault already, but no damages were recovered from that firm.
In a Dec. 13 judgment last year, Riley ordered Gravelle to pay $359,630 to Charlene Reimer and $62,556 to Matthew Reimer in damages.
Separately, Gravelle was recently found not at fault in a series of similar transactions that came to the attention of the B.C. Securities Commission, which oversees trading of stocks and other financial securities.
Gravelle borrowed $740,000 from five investors – including $500,000 from a married couple – in 2012 and 2013.
All the investors were also members of the Bondservants of Elohim, according to the Securities Commission judgment.
Gravelle gave the investors promissory notes for the return of their money, with interest, by specified dates.
However, while Gravelle and his W.Y. ATAP Investments company did return interest for a time, that eventually ended. All the investors lost money. The money was for investments in enterprises such as commercial real estate, gravel pits, and newspapers.
The money was invested in a company bank account, and at least a portion of the money went towards Gravelle’s personnal living expenses, according to the Securities Commission documents.
The hearing heard testimony from one of the main investors.
“It was clear that the respondents provided little information to the husband and wife as to the specifics of the use of their funds or the investments to be made by the respondents,” wrote the securities commissioners.
Securities Commission executive director Peter Brady alleged that Gravelle violated the Securities Act by issuing the promissory notes without being registered to trade in securities, and that he should not have promised repayment on securities.
However, the Securities Commissioners found Gravelle had not violated B.C. stock trading laws.
In B.C., people can sell financial securities without registering if they do it infrequently, are not acting as intermediaries, and do not do it as a primary business or for commission.
“The respondents [Gravelle and W.Y. ATAP] did not hold themselves out as being in the business of trading in securities,” the commissioners wrote in their judgment. “In the circumstances of this case, the eight issuances of promissory notes by the respondents to a total of five investors over an 11 month period is not frequent trading activity.”
The allegations were dismissed.
Reached by the Langley Advance, Gravelle declined to comment on the case. He said he is no longer with the Bondservants of Elohim.
The Bondservants of Elohim are a spiritual organization that believes both the Old and New Testaments of the Bible were originally written in Hebrew. They believe that translations into other languages have obscured the original meanings of the text, and believe in studying the untranslated manuscripts.
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