A former mutual fund rep from Calgary has been charged with alleged breaches of the Criminal Code following an investigation by the Joint Serious Offences Team (JSOT) in Alberta.
The Alberta Securities Commission and the Alberta RCMP have announced that Neil Andrew McDonald has been criminally charged with:
- seven counts of fraud over $5,000;
- one count of fraud under $5,000; and
- one count of money laundering.
The ASC says it’s alleged that McDonald fraudulently raised approximately $240,000 from seven different investors between October 2012 to July 2015, while he was engaged in court proceedings on previous charges and waiting to serve an existing two-year jail term. None of these charges has been proven in court.
McDonald is in custody and his bail hearing has been set for February 22, 2017. This is the first arrest resulting from JSOT investigations in Alberta, and the third time McDonald has been charged under Alberta Securities law.
Between February 2009 and April 2009, the ASC says in a settlement agreement that McDonald violated Alberta securities law by fraudulently raising $439,000 from investors. The ASC’s settlement agreement and undertaking, from 2o1o, says seven investors were affected and that McDonald was selling “non-existent Guaranteed Investment Certificates.”
The agreement says, “McDonald admits that, instead of purchasing Certificates on the investors’ behalf, he deposited the $439,000 into the bank account of 1440488 Alberta Ltd., a company owned and controlled by McDonald.”
The ASC adds McDonald also put two of the investors’ interests at risk when “he paid $260,000 of the $439,000 to purchase the Alternate Securities in his own name and that of his boss and business partner.”
As of September 2010, says the ASC, McDonald was banned from trading or advising in securities for a period of 15 years. The ASC adds that he repaid, “on his own initiative,” $439,000 in restitution. McDonald also agreed to pay the Commission $20,000 in settlement and investigation costs, and that he “lost his livelihood and voluntarily refrained from acting as an investment advisor.”
But then, in 2011, McDonald allegedly fraudulently raised $240,000 from investors, says the ASC. In October 2012, the Commission charged McDonald with offences under the Securities Act (Alberta).
On August 15, 2014, after a Provincial Court trial, McDonald was then permanently banned from trading in securities and ordered to pay restitution. The ASC says he was sentenced to two years in jail on May 29, 2015.
In a June release, the ASC details why McDonald received that sentence, noting, “When he made his guilty pleas [in 2015], McDonald admitted that he had taken funds from three investors on the basis he would use the money to purchase securities in real estate investments connected to Edgeworth Properties Inc. Instead, he put the investors’ money into an account he controlled and used the funds for personal purposes.”
The ASC says the current Criminal Code charges (eight counts of fraud and one count of money laundering) are alleged to have taken place between October 2012 and July 2015.