The man behind a hops farm set up eight years ago to supply B.C.'s booming craft beer industry has been fined over a million dollars for securities fraud and illegal distribution of funds.
Alexander William Bridges, also known as Alex Blackwell, was found to have funnelled $498,273 of investor funds meant to build his business, Fraser Valley Hop Farms Inc. (FVHF), toward personal expenses, according to a panel decision from the B.C. Securities Commission (BCSC).
"The evidence established that Bridges and FVHF collected money from investors and used a significant amount of those funds for their own benefit," reads the commission panel decision. "We would characterize the fraud committed by FVHF and Bridges as being near to the most serious type of fraud possible in an investment context."
FVHF was set up in 2016 on 52 hectares of land leased from the Seabird Island First Nation near Agassiz, about 98 kilometres east of Vancouver.
Bridges was the sole director of FVHF, controlled the company's bank account, solicited investors and decided what to do with their money, according to the BCSC.
Bridges has been ordered to pay an equivalent amount found to be missing — $498,273 — along with an administrative penalty of $550,000 for misconduct.
His partner in the venture, Shane Douglas Harder-Toews, was fined $50,000.
The panel found Toews was a de facto director of FVHF who also brought in investors, but said his role in the fraud was "significantly less serious" than Bridges.
"There is no evidence that Toews was enriched by his misconduct," said the decision.
Custom golf cart, Rolexes, sports car
Evidence given by an investor who lost $225,000 describes how in July of 2020, Bridges, using the name Blackwell, demanded in an email that investors "put forth additional capital immediately or the company will have no choice but to dissolve entirely..."
Bridges went on in the email to state that he had already made personal sacrifices to support the business, including maxing out his credit card and selling his custom golf cart, boat, three Rolexes, two favourite Breitling watches and his prized sports car.
The decision also notes that poor record-keeping around investor funds was a materially aggravating factor in the case.
"Bridge's failure to keep proper records enabled the fraud by hiding the fact that he was directing only a portion of the investor money towards the hops farm, and spending the rest on other purposes," it said.
CBC featured Bridges in a 2017 article highlighting new enterprises on Indigenous land. He used the name Alex Blackwell in the story.
"The area around the 49th parallel produces some of the best hops in the world," he is quoted as saying.
"We're really happy to be working with Seabird. I think we're going to build a strong relationship with them. We're the new kids on the block, but we're looking forward to getting involved with the community and being able to offer jobs in the future."
CBC has reached out to Seabird Island First Nation.
The BCSC decision notes that FVHF "is in danger of being dissolved ... and there is no evidence indicating any potential avenue for recovery by investors."
Neither Bridges nor Toews participated in the BCSC process, which is their right.
Along with the fines, both men have been handed bans from participating in securities activities.