Fraudster’s tale may not be over yet

The trouble with white-collar crime is that the victims just want their lost money back

Jeremy James Peers — known to his friends as Jay — doesn’t look like a bank robber.

He looks, indeed, like a mildmannered middle manager, a slim, bespectacled, balding man in his early 70s, the scion of one of Edmonton’s old money families.

But looks — and pedigrees — are deceiving. And Peers was a master of deception.

Peers looked exactly like the sort of responsible, buttoneddown financial adviser whom you’d trust with your life savings.

And that’s just what dozens of clients did.

But Peers was a phoney. An elegant, well-dressed phoney who victimized all kinds of people, including many who considered him a close and trusted personal friend.

When his illusory business empire collapsed in late 2010, investors lost close to $80 million in a complicated Ponzi scheme, in which the first rounds of investors were “paid” with money collected from later rounds of investors. Clients thought Peers was putting their money in safe, low-risk, conservative mortgage investments. Instead, much of it was going into high-risk investment schemes, including into companies run by Peers’ sons.

A year and a half after Peers’ companies Federal Mortgage Corp. and Peers Foster Kristiansen went under, leaving bewildered investors in the lurch, the Alberta Securities Commission (ASC) charged Peers with 33 counts of breaching provincial securities law.

Rather than disciplining Peers itself, ASC took its case to Alberta’s provincial court.

Originally, Peers pleaded guilty to 11 charges. But then, in an act of remarkable audacity, he appealed his own guilty plea. He argued he should have had a right to a jury trial even though he’d never asked for one. In Canada, you only have the right to have your case tried by a jury if you face a sentence of longer than five years. The maximum sentence Peers was facing was five years less a day. But Peers argued that because he might also face a fine of up to $5 million, he should have had a right to trial by jury. And so, he and his lawyers argued, all of his charges should be stayed.

In February, Canada’s highest court ruled his arguments without legal merit. Next, his lawyers tried to force the judge to recuse himself, claiming bias. Then they threatened to file a Jordan application, saying the proceedings had gone on too long —an absurdity, since they were the ones causing the delays.

So this week, at long last, seven years after his Ponzi scheme imploded and five years after he was charged, Peers was sentenced. Judge Fred Day called him a “con man” — although, he allowed, “fraudster” might be a more genteel term for it. Then Day sentenced him to 31/2 years in prison, which was actually a year longer than the ASC had asked. Day also ordered him to pay back $513,355 in restitution to two particular investors.

Peers was also banned for life from acting as an investment adviser and from being the officer or director of any corporation.

“This is one of the most severe sentences to date under the Securities Act,” said Hilary McMeekin, who speaks for the ASC. “Not only will Jay Peers be incarcerated and permanently removed from Alberta’s capital markets, but this sentence sends a clear message to others that behaviour of this nature will not be tolerated.”

No word yet on whether Peers will appeal the sentence.

Sending a non-violent septuagenarian to jail for 31/2 years may seem cruel. Alberta’s prisons aren’t exactly comfortable retirement homes. In other ways, it hardly seems punishment enough, when you consider how many seniors had their lives destroyed.

That is the challenge with punishing white-collar crime. What shattered investors really want, of course, is their money and their faith restored. But Peers isn’t in much of a position to do either.

Did Peers actually set out to con people? Or did he get in over his head and panic, in the middle of the global banking crisis, in his efforts to preserve his reputation and keep investors happy? To the clients he betrayed, particularly those who were friends and family, maybe the difference doesn’t matter.

Meanwhile Peers still faces a civil lawsuit. And RCMP say their own criminal investigation of Peers and his company is still “ongoing.” And so, it seems, is the story of Jay Peers.

This sentence sends a clear message to others that behaviour of this nature will not be tolerated.