Allegations of Fraud and Misrepresentation Under the Yukon Business Nominee Program

Business Immigration Under Scrutiny
Two civil actions currently before the Yukon Supreme Court allege serious misconduct under the Yukon Business Nominee Program (the “Program”), including fraud, misrepresentation, and breach of fiduciary duty by parties offering immigration consulting and investment services.

The plaintiffs claim they were induced to invest significant sums into business ventures ultimately controlled by individuals with undisclosed personal ties to their consultants. Both now allege significant financial loss, failed businesses that were mired in self-dealing by the families of the immigration consultant in question, and failed immigration outcomes that were promised by the consultants. These proceedings raise concerns about regulatory oversight and the professional duties owed to foreign nationals participating in nominee-based immigration programs.

The Yukon Program: A Promising Pathway—With Pitfalls
The Program provides foreign nationals with a two-year work permit during which they are expected to invest in and operate a qualifying business in Yukon. If they meet the requirements set out in a formal Program Agreement—including minimum investment amounts and business performance targets—they may be nominated for permanent residency.

In both cases, the plaintiffs allege they were advised to invest in pre-arranged business ventures, later revealed to be controlled by individuals closely affiliated with their consultant. They claim they were excluded from key decisions, deprived of control, and placed in arrangements that ultimately failed to meet Program expectations.

Neither matter has been tested at trial, and all defendants have denied the allegations.

The Claims: Investments Diverted, Immigration Jeopardized
One plaintiff invested approximately $600,000 into a Whitehorse retail venture, believing he was entering into an arms-length commercial arrangement. He later discovered the “Canadian partner” identified in Program filings was a close relative of the consultant, and that his capital had been diverted toward a related real estate project which was owned by the consultant and the Canadian partner. He was allegedly denied operational control, income, and the ability to meet Program milestones.

The second plaintiff invested in a dry-cleaning business alongside a partner introduced by his consultant. That partner—also later revealed to be closed affiliated with the consultant—is alleged to have misused funds, neglected operational duties, and ultimately abandoned the venture. The plaintiff claims he was misled about the structure of the business, overcharged for services, and left without a viable path to the promised permanent residency which was the reason for his investment.

Key Legal Issues
The claims raise several overlapping legal issues:

• Misrepresentation and Non-Disclosure: Plaintiffs allege that they were misled about the identity of their business partners, the viability of their ventures, and the likelihood of Program success.
• Fiduciary Breaches: Immigration consultants and their affiliates may owe fiduciary duties of loyalty, candour, and fair dealing. The claims assert that these duties were breached through self-dealing and undisclosed conflicts.
• Contractual Unenforceability: Both plaintiffs seek to void their Program Agreements on the basis of fraud, misrepresentation, and lack of informed consent.
• Constructive Trust and Unjust Enrichment: The Plaintiffs also claim equitable relief to recover funds allegedly diverted or misused by those in control of the businesses.

Regulatory Reflections: A System in Need of Safeguards
The allegations in these proceedings point to structural risks in nominee-based immigration programs where foreign investors must rely on consultants and intermediaries to protect their legal rights and interests. In both cases, the plaintiffs were non-residents with limited knowledge of Canadian regulatory and legal frameworks. The absence of safeguards against overlapping business and advisory relationships left them vulnerable to exploitation.

While the facts remain unproven, these matters highlight the need for stronger regulation over immigration consultants including enhanced disclosure obligations, better enforcement of professional standards, and clearer conflict-of-interest rules for the consultants and their associated business partners.

Enforcing Accountability in Business Immigration

These cases highlight the importance of transparency, accountability, and proper legal guidance in Canada’s business immigration programs. Where nominee pathways intersect with private investment and professional services, even minor irregularities can lead to significant legal and financial exposure.

The Yukon Supreme Court will ultimately determine the merits of these claims, but the legal and regulatory issues raised have broader implications for the administration of nominee programs and the responsibilities of those who operate within them.

For individuals or professionals navigating immigration-related disputes, our Litigation and Immigration Practice Groups offer the experience and strategic insight needed to protect your interests and pursue appropriate remedies. Contact Darren Penner and Jimmy Burg to learn how our team can assist.