Man sentenced to 3 years for Ponzi scheme

Brian Wilfred Clemens is going to jail for running a Ponzi scheme that collected more than $1 million.

Clemens, from Oliver, B.C., was sentenced Tuesday in Lethbridge provincial court after entering a guilty plea on Sept. 25. He was handed a three-year sentence resulting from a joint submission.

Special prosecutor Brian Holtby said the sentence is acceptable as it lies in the range for a fraud case of this size.

“One of the things we considered was that he was pleading guilty and saving about a week of court time,” he said.

He noted Clemens was cooperative during the process and negotiations leading to the joint submission were “amicable.”

The 49-year-old had been charged with a single count of fraud over $5,000 and laundering the proceeds of crime.

He was charged in 2015 after an investigation by the Lethbridge Police Service determined that between September 2009 and March 2014 he used his position as a mortgage associate to approach acquaintances and solicit funds he claimed would be used as “bridge financing” for his real estate clients, promising a high rate of return.

He managed to collect $1.2 million from nine people.

He used some of the money gained from later victims to pay interest to earlier victims, but much of the money was deposited in his own bank accounts for personal gain.

Clemens will also be forced to pay restitution to all of his victims, minus any money they had already received.

All of the restitution orders have been made save for a single victim due to the judge requiring more information. It is expected that order will be finalized on Nov. 30.

“What the victims are entitled to is what they provided to Mr. Clemens less what they received back from Mr. Clemens,” Holtby said.

A Ponzi scheme is a type of fraudulent investment operation that relies on a large upfront investment for promises of high interest returns.

The scheme works by paying the old investors with the money generated from new investors. The scheme needs a constant influx of new investment or else it falls apart.

Holtby said this case was not “particularly complicated” compared to similar crimes.

“It was very hard on the complainants, many of whom lost a great deal of money,” he said. “Fortunately, there were only nine. We’ve had cases like this where there were hundreds of complainants.”