Multimillion dollar alleged fraud crosses provincial borders hurting investors in Alberta, B.C. and elsewhere.
The Alberta Securities Commission is alleging that a portion of the $75 million raised by Ronald James Aitkens and Roy Juergen Beyer through myriad corporations was diverted away from investors and straight into the pair’s own pockets. Those funds were initially earmarked for the purpose of acquiring shares in an oil and gas exploration company but subsequently poured into residential real estate development.
The interesting part of this case is that it’s a small piece of a larger legal controversy facing Atkins, apparently a former pastor. Back in 2013, a lawsuit sought to recover over $500 million from Atkins involving 16 different real estate ventures. The Alberta Investors Protection (AIP) website puts the amount raised at $250 million through 6,000 investors.
To date according to the AIP, there are $2 billion in failed or failing exempt-market investments in the province of Alberta alone.
Advisors looking to the private capital markets for their clients might want to follow this case more closely as it highlights some of the risks involved in these securities.
Atkins, the ringleader in this entire mess, along with Beyer, is alleged to have committed the following misdeeds: Misleading statements about the trust that was used to raise investor funds, failing to disclose a related-party profit, failing to disclose a material agreement, making misleading statements generally, issuing false certificates, providing misleading offering memoranda to the Commission, making illegal distributions and finally, committing fraud.
Very early in the proceedings there hasn’t even been a hearing date set on this matter. That should happen on May 13. Stay tuned.