The B.C. venture capitalist who promised then failed to deliver millions of dollars for neuroscience research must make good on an unrelated $100,000 fine for fraud he owes the provincial securities regulator.
Michael Savage, 57, was recently told by a B.C. Supreme Court judge that a securities ban and fine he received in 2008 for defrauding investors remains in place. The judge also dismissed the $480-million counter claim Mr. Savage had filed against the B.C. Securities Commission, the provincial government and other parties for allegedly violating his Charter rights. The sanctions are connected to a telecom business he started in the late 1990s.
The Globe and Mail began investigating Mr. Savage’s business history after he brokered the donation of champion bull rider Ty Pozzobon’s brain to the University of Washington for research. The Globe found that Mr. Savage’s track record included evading taxes, lying about credentials, ignoring court judgments and fines, and failing to pay numerous employees, landlords and businesses. The Canada Revenue Agency is on the long list of creditors.
Related: Controversial venture capitalist sues BCSC and B.C. government, seeking $480-million
Asked about Mr. Savage and the judge’s ruling, BCSC spokeswoman Alison Walker wrote via e-mail, “[It] means that the BCSC can continue to take steps to collect on our sanctions.”
Those steps include: registering against property interests; garnishing bank accounts and receivables; and seizing personal property. Ms. Walker noted that since BCSC “registers all decisions with the Supreme Court of BC,” those outcomes have “the same force and effect as if it were a judgement of the Supreme Court.”
A Globe probe last year found that Canadian securities regulators have a weak collection record. An analysis showed that the amount of unpaid fines had reached at least $1,101,583,984. B.C. has the highest count with $478-million. Ontario is second with $360-million and Alberta third at $108.7-million.
Those who have been burned by Mr. Savage’s actions are doubtful he’ll ever be forced to repay. Mark Maier and seven partners invested US$765,000 in Mr. Savage’s telecom venture in 2000. When they grew suspicious of the deal and asked for their money back, Mr. Savage moved US$530,000 to personal bank accounts, including one to his sister and one to his fiancée.
“In Canada, it’s all provincially regulated, so the jokers can go from one spot to the next and do the same thing,” said Mr. Maier, the Calgary president and CEO of The Aurum Group of Companies, which deal with dental needs. “Canadian laws [or lack of] basically state white-collar crimes pay.”
Mr. Savage is CEO and the sole director of M1 Capital, a firm based in Port Coquitlam, B.C. In his most recent venture, he had attempted to raise at least $5-million for a brain-injury research startup called Nucleus Bio, an unregistered company. To promote his business, he misrepresented his business relationship with the University of Washington in connection with Mr. Pozzobon’s brain donation, according to e-mail correspondence obtained by The Globe through the state’s public records law.
Mr. Pozzobon died by suicide in January, 2017. He was 25. An autopsy of his brain showed he suffered from chronic traumatic encephalopathy, a degenerative brain disease.
Mr. Savage also tried to exploit a US$25-million research partnership with the non-profit Society of Nuclear Medicine and Molecular Imaging. The funding deal was announced with great fanfare in Denver last June by former Pittsburgh Steelers team doctor Julian Bailes – the renowned neurosurgeon who had helped shift how the NFL deals with head blows, and was portrayed by Alec Baldwin in the movie Concussion.
But Mr. Savage did not produce any of the funding he promised to the Virginia-based society or to the University of Washington. Both organizations distanced themselves from Mr. Savage after The Globe began looking into his Nucleus Bio startup.
Mr. Savage wrote in an e-mail last week that he was not interested in The Globe’s “request(s) for comments and or interviews.”