Former Winnipeg mutual fund dealer fined $250,000

The Mutual Fund Dealers Association of Canada (MFDA) held a hearing Wednesday to investigate allegations against former Winnipeg salesman Dennis Villarin.

According to the MFDA, between 2006 and 2008, during his tenure at World Finance Group, Villarin advised 14 new clients to borrow money and use the proceeds from those loans to buy investment funds.

Villarin has helped his clients obtain more than $1.6 million in loans in a high-risk strategy known as leverage.

He has now been fined $250,000, but the MFDA said they cannot force him to pay the fine unless he wants to stay in the industry.

Villarin told clients they would get a return on their investment, but they didn't.

Villarin helped clients obtain loans by knowingly inflating the market values ​​of some of his clients' homes. He claimed others had RRSPs they didn't have, and in one case he said a female client made $56,000 a year in retirement and wasn't even getting a pension at the time.

Lily McNemera was one of Villarin's former clients. Because of her business relationship with Villarin, she and her husband now owe $250,000 to credit bureaus.

“We're struggling,” McNemera said.

McNemera was hoping to earn a little extra money to send to her family in the Philippines when she met Villarin. He had no idea how much he owed until he took out a car loan and turned it down.

Villarin did not attend the hearing, and he did not respond to CBC's requests for comment.

Correction: An earlier version of this story stated that Mr. Villarin's name was Paul. Actually it's Dennis. (April 26, 2014 at 11:32 am)