Two of the three men and one women alleged to be involved in an alleged Ponzi scheme with roots in the Three Hills and Linden area have pleaded guilty and received stiff sentences.
In late November Murray Stark, 74, of Three Hills pleaded guilty to fraud over $5,000 and was sentenced to six years in prison. On December 1 Robert Fyn, 64, of Linden, identified as taking the lead role in the scheme, pleaded guilty to the same charge and was sentenced to eight years, by way of a joint submission.
Crown prosecutor Peter Mackenzie said the amount of money involved was in the area of $40 million, and could have involved in the area of 1,000 investors.
“We had on our witness list about 100 lay witnesses, and those people were typically called aggregators, so they would represent a number of investors, and they would have put money together,” said Mackenzie. “Without overestimating, the number exceeds 1,000, in my respectful view.”
On March 29, 2010 charges that included fraud over $5,000, and conspiracy to commit fraud were levied against Stark, Fyn and Garth Bailey of Okotoks. In addition, the three and Katherine Rodrique Bailey of Okotoks were charged with laundering the proceeds of crime and conspiracy to launder the proceeds of crime.
Garth Bailey is scheduled to appear in court in February.
The RCMP Calgary Commercial Crimes section investigated allegations of investment fraud and money laundering relating to an Alberta investment company called HMS Financial Inc. Investigators believed the company was involved in a series of investments between 2001 and 2004 that were believed to be part of a Ponzi scheme.
“This unravelled because some American authorities seized a large amount… a little more than $6 million U.S. that had been sent to an American attorney in California, and that is what triggered it to come down,” said Mackenzie.
According to a National Post report, investors were offered high yield returns in the area of 12 per cent, compounded quarterly, and claimed the funds were protected by a bond in trust. Some of the funds were invested in high yield investments programs that turned out to be another separate investment fraud.
The initial court appearances began in Drumheller but the venue was moved because they were not able to schedule the continuous sitting days at the provincial court house in the valley.
Mackenzie said in both cases there was no restitution order put in place, meaning restitution is to take place through civil action.
