‘She threatened to sue me,’ investor tells fraud trial
Man who invested $1.2M says Pastuch got ‘nasty’ when he asked about money
Grant Williams knew Alena Pastuch as a savvy and successful businesswoman, a Harvard graduate who had done postgraduate work in the Soviet Union, and with the United Nations, the World Bank and the Rockefeller Foundation.
He was impressed by her knowledge, the way she spoke, the BMW she drove and her fine clothes. He believed the Regina woman had put $2 million of her own money into what she described as a “zero risk” investment, secured by a sizable trust fund, “receivables” from both the provincial and federal governments, and her own property.
Among Williams’ family and friends, there was a buzz around the promising anti-spam technology company — carrying a value of $20 million — and Pastuch was willing to bring in investors to share in the potential wealth.
In time, the company had offices in Regina, Calgary, and Los Angeles. One update referenced potential investors in Australia. There was talk of a New York gala, appearances on talk shows with Oprah and Kelly Ripa, and a potential sale to the Bank of America.
“This was the big one. This was the one she was going to retire on,” Williams recalled Thursday in a Regina courtroom.
According to Williams, Pastuch shared all that and more in conversations, emails and documents — information that persuaded Williams and his wife to give Pastuch a total of $1,260,000 in invested money and loans between 2008 and 2009.
How much did he get back? “Not a penny,” Williams testified. Until court, the last time he had seen Pastuch was in 2010, spotting her by chance at the Craven Country Jamboree. He asked again about his money.
“Her response was very defensive,” Williams testified, seated on the witness stand across from Pastuch, who is defending herself without a lawyer. “She threatened to sue me for defamation of character.”
Pastuch, 53, is on trial for theft, fraud and money laundering. She’s accused of misappropriating millions from corporate and private investors between 2006 and 2013. Court has heard investors understood the money was put into companies focused at varying times on developing anti-fraud and child protection software.
As he has done with other witnesses who also said they invested, Crown prosecutor Dana Brule asked Williams if he had ever agreed or understood that his investment would go toward Pastuch’s personal expenses, including gambling, clothing, health care, beauty products and services or fitness.
“No,” Williams replied. Williams was asked about an email exchange with Pastuch, from the fall of 2009, when he was pressing for repayment of at least his last $200,000 — a loan Pastuch promised to repay within six months, he testified. Unable to reach her, Williams emailed Brian Pederson, Pastuch’s chief technology officer.
Williams got what he described as a “nasty” response from Pastuch, chastising him for asking Pederson about the money, and adding she can’t have “back stabbing by investors.”
Around that time, Pastuch told him she was undergoing surgery. Williams said from a call to the Los Angeles office, he and his wife learned from Pastuch’s business associate that, “(Pastuch) was undergoing a full body makeover — and the company was paying for it.”
At one point when he was pressing for repayment, Williams said Pastuch had indicated she was due to come into some money soon through the sale of memorabilia — some Jimmy Hendrix guitars and a suit owned by Buddy Holly. Williams said he didn’t know where Pastuch got the money to buy memorabilia, and he never did see any money from it.
Williams said when he initially invested in 2008, he had sold some farmland. Pastuch offered a guaranteed investment with a better return than the banks. He understood her company was developing anti-spam technology, but then switched to a child protection product called Cyber Angel.
When he wasn’t seeing any return on his investment, he pressed to see the product and eventually saw a “shaky ” amateur video showing two guys pressing buttons on Blackberry phones.
Williams thought, “Oh my God, we’re in trouble. This is crap,” he told the court. “It was terrible. It made no sense to us at all.”
Testifying with the help of his notes, Williams said he has tried to forget all that happened. He felt depressed, guilty and ashamed in the aftermath, wondering, “How could we have got scammed this way?”
The trial, now in its fourth week, is expected to hear from 86 Crown witnesses.