Two- year jail sentence in Alberta fraud case

Ex- mutual fund salesman in Calgary also to pay $ 240,000 in restitution

A former Calgary mutual fund salesman who pocketed money from three investors after telling them it would be invested in real estate associated with Edgeworth Properties Inc. has been sentenced to two years in jail and ordered to pay restitution of $ 240,000.

Neil Andrew McDonald pleaded guilty a year ago to three counts of fraud, as well as making misrepresentations to investors and violating a 2010 Alberta Securities Commission settlement agreement under which he was not to offer investment advice or trade securities for 15 years.

He was charged with the offences in October 2012.

On Monday, he was sentenced in provincial court and ordered to permanently refrain from trading in securities or acting as an adviser in connection to the securities market.

The court also ordered that $ 36,000 frozen in McDonald’s bank accounts be split between the three victims and placed him on probation for three years.

The settlement deal he admitted breaching originated in September 2010, when McDonald paid $ 15,000 to settle allegations of fraud plus $ 5,000 to cover ASC costs.

He admitted that between February and April 2009, he raised $ 439,000 by telling seven Alberta investors that he would purchase GICs, when in fact he used $ 260,000 of the investors’ funds to buy securities in another company in his own name and that of his business partner.

McDonald repaid the investors’ money, a factor the ASC considered when determining his penalty.

Sentencing on the more recent charges was delayed after the court ordered a pre- sentence report and a “psychological/ psychiatric” assessment of McDonald last June.