A Calgary man who defrauded investors out of tens of millions of dollars has been arrested after a judge convicted him in a decades-long Ponzi scheme.
Arnold Breitkreutz, 74, was found guilty of defrauding over $5,000 by Crown Court judge Colin Feesby following a trial earlier this month.
When the charges were first laid in 2018, the RCMP said there were hundreds of investors affected.
These men and women invested in Breitkreuz’s company, Base Finance, and believed their money was backed by mortgages on real estate in Alberta.
In reality, it was loaned to an oil and gas promoter and used in a “venture oil play in Texas and secured against oil and gas leases and equipment,” the judge wrote in his 20-page ruling.
“We saw the sheriffs take him away”
A group of about a dozen investors were in the courtroom Wednesday afternoon for the sentencing.
“He was convicted and we know he’s going to prison,” said Bill Janman, an investor who lost nearly $3 million in the scam.
“We actually stayed in the courtroom until we saw the sheriffs take him out the back door where they take prisoners out.”
Although Base Financial began operating in the late 1980s and took investors’ money for more than 30 years, the time period examined by the courts was over 16 months, from May 2014 to September 2015.
Investment losses at Base Finance totaled more than $100 million, but much of that fell outside the dates of the breach.
“There was no way we could recover from the loss,” said Janman, who is in his mid-70s.
“Nothing But A Big Ponzi Scheme”
In 1999, Janman knew someone who had invested in Base Finance mortgages. He met with Breitkreuz, put money into the company and got little back. He also received checks for interest.
“Over time, we started lending more,” said Janman, who was trying to build up his retirement savings.
In 2016, Base Financial filed for bankruptcy and “everyone’s world came to an end,” Janman said.
“That’s when we realized it was nothing, it was nothing but a big Ponzi scheme and everything everyone had invested in was gone.”
Although he claimed he did not intentionally mislead investors, Breitkreutz knew he was “defrauding” those who had entrusted the business owner with their money, Facebook ruled.
“Mr. Breitkreutz knew he was gambling with his investors’ money in ways and with risks they did not understand and did not agree with.”
“Among the Worst Scams”
In 2019, the Alberta Securities Commission (ASC) ordered Breitkreutz and his office manager, Susan Elizabeth Way, to pay nearly $4 million.
At the time, the ASC called the scheme “among the worst frauds perpetrated in Alberta.”
Breitkreutz and Base Finance Ltd. were permanently barred from trading or buying securities after being convicted of violating the Securities Act.
Many of the investors defrauded by Breitkreutz and Way were elderly.
Wei was sentenced to three years in prison last year after pleading guilty to her role in the scam.
A sentencing date for Breitkreutz will be set next month.
Prosecutor Brian Holtby said that based on similar cases, the appropriate range was between seven and 12 years in prison.
Defense attorney Kyle Ellis-Toddington did not say what he plans to seek for a sentence.
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