'Never been to Alabama': Vancouver Island man claims innocence in U.S. Ponzi scheme

A Vancouver Island man embroiled in a battle to control a legendary Sooke hotel claims he's the innocent victim of both a deceased former business partner and a U.S. justice system which has accused him of being a Ponzi schemer.

Timothy Durkin appeared Monday at an immigration hearing where he is fighting to avoid deportation because of what authorities in Alabama claim is his role in a multi-million dollar financial fraud.

Durkin, a financier who made headlines in an ownership fight with the founders of the fabled Sooke Harbour House, says he has done nothing wrong.

"I never had any involvement with this at all," Durkin told Immigration Division member Trent Cook during a virtual proceeding.

"Not a single drop. Never been to Alabama. Don't know anyone from Alabama. Never took a penny from anyone in Alabama."

'He slaughtered me'

Monday's hearing comes more than three years after Canada Border Services Agency officers showed up at Durkin's Sooke home to question him about a 2013 indictment accusing him and three others of defrauding investors of more than $4 million through a scheme involving a complex financial trading instrument.

It also follows a recent B.C. Supreme Court judgment calling Durkin a "garden variety bully" in relation to his years-long fight with Sinclair and Frederique Philip for control of Sooke Harbour House, the legendary tourist destination the pair established in 1979.

Justice Jasvinder S. Basran awarded the Philips $4 million in relation to a deal they struck with Durkin and a partner in a failed 2014 share purchase agreement for the hotel, which has hosted both Hollywood royalty and real kings and queens.

Mason Cooke, counsel for the minister of immigration, asked Durkin about the judgment, in which Basran accused him of swearing a false affidavit and said: "His view of the truth is whatever will serve his interests in the moment. He is entirely unencumbered by ordinary norms of morality, integrity and decency."

"He slaughtered me," said Durkin, who is appealing the judgment.

He accused Basran of bias and said the judge failed to take into account his vulnerability as a self-represented litigant.

"We went into that courtroom totally unprepared, totally disorganized, with all kinds of trepidations," he said. 

"He drew conclusions, and those conclusions are based on a half-baked cake."

This summer, North Vancouver-based IAG Enterprises purchased the land, the Sooke Harbour House building and its associated assets for $5.62 million in a court-ordered foreclosure sale.

Neither Durkin, his companies, nor the Philips are involved with the property anymore.

'Without our knowledge or consent'

Durkin came to Canada as an infant from the United Kingdom, where he was born. 

As a permanent resident, he could be stripped of his status, but he revealed on Monday that he believes he has a right to Canadian citizenship because his parents worked and lived in Canada in the years immediately before and after his birth.

If he's successful, the immigration proceedings would be moot.

Durkin grew up in Canada but lived for many years in both the United Kingdom and the U.S. overseeing offices in London, Zurich, New York, Dubai, Singapore and Hong Kong.

He left the U.S. in 2012.

The next year, prosecutors in Alabama charged Durkin and three co-accused with wire fraud.

According to the indictment, they convinced investors they had developed a high-speed computerized system that could maximize profits through rapid same-day stock trades.

At the hearing, Durkin claimed he ran a successful trading system and allowed a former business partner, Stephen Merry, to raise a limited amount for investment through family and friends. 

But he said Merry, who died in 2014, set up his own firm through which he apparently traded on the reputation of Durkin's company to raise millions while keeping Durkin and others in the dark about the true nature of his transactions.

"Despite their assurances that they weren't soliciting funds, [Merry] went out and solicited what looks to be millions of dollars worth of funds, without our knowledge or consent and claiming that they were giving the money to invest in a trading program," he said.

"Instead they were taking the money from the people in Alabama and paying someone else with it and, at the same time, keeping money for themselves."

'I'm very suspect of that'

At one point, Durkin was asked about the movement of a sum of money from Merry's company to Durkin's trading firm and then into his bank account. Durkin said he didn't think the record of the transaction was correct.

"I'm very suspect of that. Very suspect," Durkin said.

"I believe the FBI was too, sir," Cooke replied.

Durkin told the hearing he knew Merry had been charged by the FBI, and he said another friend also told him at one point that his own name had come up in connection with a financial judgment of more than $4 million in relation to the case in the United States.

But he claimed he did not know he had been charged until the CBSA informed him and sent him court materials from the U.S.

Merry and the two other co-accused were ultimately convicted and sentenced to five years in prison. The charges against Durkin have never been tried.

Durkin said he has never met the other two accused, David Petersen and Yaman Semcan. He said he believes that, like him, they may well be innocent.

But Durkin claimed it could be his knowledge about the case that led U.S. immigration authorities to refuse him entry to the country in the year before charges were announced.

"I was prevented from entering the United States by the FBI," he said. "I believe that they were investigating and I don't think they wanted me because I may have been able to uncover some things they didn't want to uncover."