Over the course of three years a Vancouver woman seemingly went from working at McDonald’s to buying and selling at least $5.9 million worth of stock and signing, over a five-month span, lucrative six-figure consulting contracts, documents reveal.

Explaining the mystery of Danilen Villanueva’s apparent meteoric rise in B.C.’s capital markets may be one of the keys to explaining one of the largest cases of alleged securities fraud in the province’s recent history.

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Villanueva’s business transactions are something British Columbia Securities Commission (BCSC) investigators are looking into as part of an investigation of alleged securities violations by at least 11 junior public companies and over two dozen purported consultants, including Villanueva, the corporate receptionist for companies run by Anthony Jackson, a chartered professional accountant.

Jackson is a central figure among the group of consultants who, along with the 11 Canadian Securities Exchange-listed companies, are respondents to a BCSC notice of hearing. Jackson lives in a $16 million luxury waterfront mansion in West Vancouver that’s been frozen by the commission. The allegations have not been tried or proven in court or by the BCSC hearing panel.

Villanueva and many of the other self-described consultants are tied personally or by business to Jackson, a prolific junior stock promoter who also directs BridgeMark Financial Corp. BCSC investigators coined the consultants the “Bridgemark Group.”

On Sept. 10, 2018, securities investigators and police visited Villanueva’s last known address, a Vancouver apartment, to glean more information about her six-figure consulting contracts and the nearly $6 million worth of private placements her company made in eight of the 11 companies, between February and June 2018, a partially redacted BCSC affidavit obtained by Glacier Media reveals.

Authorities didn’t find Villanueva at the apartment that day but they did speak to an “unidentified male” (UM) and “unidentified female” (UF), who resided there and seemed familiar with Villanueva’s life, the affidavit, including investigator notes, shows.

“The UF and the UM both confirmed they are [redacted]” and that Villanueva had been paying rent but moved out at the end of August 2018. Villanueva graduated from Capilano University in 2015 with a two-year diploma in business administration, said UF. While attending university she worked at McDonald’s and after graduating she worked at a Coal Harbour restaurant. At some point in 2016 Villanueva was hired to “do deposits” at Jackson and Company accounting firm, authorities were told.

On November 10, 2017, Villanueva, as sole director and beneficiary, incorporated Detona Capital Corp. with the same mailing address as Jackson’s companies, according to the BCSC.

Up until the 2017 tax year the UM had done Villanueva’s taxes, UF explained.

According to the investigator’s notes: “UF stated DV’s income is approximately [redacted]. I asked the UF whether [redacted] has $1 million, both the UF and the UM laughed and the UF added that DV has approximately [redacted].”

Trading records indicate Villanueva’s company would have needed $1 million to make such substantial trades. If she didn’t have $1 million, then where did she get the money?

That’s the question Vancouver lawyer Paul Bennett is seeking to answer after launching a class-action lawsuit against the companies and consultants as well as some of their associates.

Glacier Media reached out to Villanueva’s lawyers but did not receive a response. Jackson and Company and BridgeMark Financial Corp., where Villanueva also worked as secretary, have since left their last known shared address on West Hastings Street.

The BCSC alleges the companies – low-value shells with little prospect of profit – illegally distributed $50.9 million worth of shares under a trade exemption for consultants while simultaneously issuing consulting contracts for close to the same value of the shares. The consultants allegedly never performed any substantial work outlined in those contracts and immediately dumped their shares on the exchanges at a discounted price. Nevertheless significant overall profits were made, a BCSC notice of hearing claimed on Nov. 26, 2018.

But each company dealt with a different combination of consultants, who either bought shares and received contracts or were only given contracts. It is not known to what extent the company executives and purported consultants worked together to “to make the scheme work to its fullest profit potential,” Bennett told Glacier Media.

Some transactions show not all consultants received as much money as others. In the case of Blok Technologies Inc., contract and trading records revealed in BCSC affidavits show Detona would have lost about $145,000 while Bridgemark Group members collectively netted $1.4 million between the contracts and the buying and selling of shares. Some consultants who didn’t buy shares had lucrative consulting contracts, such as respondent Justin Liu’s company, Lukor Capital Corp., which received $360,000 for online advertising.

In other instances, Villanueva’s consulting contracts far exceeded what someone at the onset of a business administration career would typically earn. Polish-Canadian wood pellet company, and BCSC hearing respondent, Green 2 Blue Energy Corp. provided Detona a $220,500 contract to provide “general administrative assistance and services” and “initiate and prepare draft agreements” while reporting net sales of $71,586 in 2018.

Based on the BCSC allegations and various related court claims, Bennett’s class action filing states Jackson conceived the scheme along with fellow West Vancouver residents and respondents including Liu, who operated illegal marijuana dispensaries, former professional hockey player Cameron Paddock and Aly Babu Mawji, who spent time behind bars in 2013 for securities fraud in Germany.

Bennett notes in his claim that CSE trading records show it was those four who participated in the first alleged illegal share distribution on February 2, 2018, with Jackson-directed Kootenay Zinc. Corp., also a BCSC hearing respondent. Detona was the fifth participant. The group collectively bought $1.22 million worth of shares and according to audited records was awarded $1.13 million in contracts.

Whether Jackson orchestrated trades is another question being asked by investigators. One BCSC affidavit shows Jackson’s brother-in-law, Ryan Venier, an Abbotsford dentist, was asked by investigators whether Jackson told him to trade shares in the respondent companies Venier, a hearing respondent himself, bought shares in. Venier denied Jackson directed his trades.

The enforcement action, including limited and temporary trade orders against some parties, involves an unusually high number of operatives, who, according to the Canada Stockwatch database, have collectively been involved in hundreds of other penny stock companies listed on the Canadian Securities Exchange and TSX Venture Exchange.

A company not listed in the BCSC notice of hearing but that Villanueva was involved with is TSX-V-listed RewardStreams Solutions Inc.

On November 17, 2017, Villanueva and Paddock became company directors. On April 10, 2018, they oversaw a $3.2 million private placement.

“At approximately the same date as the private placement, consulting fees of $666,805 were paid to companies owned by individuals who had subscribed for shares which had gross proceeds of $702,905 in the April private placement,” audited records indicate.

In the name of privacy, the TSX-V does not disclose who buys shares in private placements, unlike the CSE, which had done so prior to redacting their Form 9s (private placement records) last December. Those Form 9s were valuable tools for investors to conduct due diligence and in revealing the alleged scheme.

gwood@glaciermedia.ca