Fraud victims hope for repayment as Regina woman sent to prison
Pastuch expected to appeal sentence for bilking people out of $5.5 million
REGINA Watching as a dishevelled and disgraced Alena Marie Pastuch — who once attracted investors with her air of success and wealth — was sentenced to prison, one victim was more focused on the dozens of people not there to see this day.
“I feel sorry for the people that will never recover from the loss,” said Garnet Peterson, possibly the only victim in a Regina courtroom Friday to see the woman who orchestrated a $5.5-million fraud sentenced to seven years in prison. Many victims said during the trial that they’re trying hard to move past what happened, even as they still grapple with the embarrassment, anger and financial hardships.
Starting in 2007, Pastuch urged them to join her promising technology opportunity, a “guaranteed” and “zero risk” investment purportedly secured by $1.8 million in “receivables” from the Saskatchewan government. Individual investments ranged from $10,000 to $1.26 million, the latter from a couple who sold their farm, in the belief their money would go toward the development and marketing of saleable anti-fraud and child protection software.
What they couldn’t possibly have known then was that Pastuch’s many claims were all lies — no product, no sales, no Harvard business degree, no $20-million company valuation, no $1 million of her own money at risk, no board or executive. Just Pastuch and their money.
“I have no idea how she got into it,” Peterson mused. “Maybe there was some sense of honesty at the early stage — but then she saw opportunities for personal gain.”
Between 2007 and 2009, when Saskatchewan’s security watchdog issued a cease-trade order, more than 80 people poured in money. The judge found it was largely spent on Pastuch’s life of luxury. She favoured high-end hotels in Los Angeles and Las Vegas, paid thousands to a high-profile Beverly Hills plastic surgeon who worked on movie stars, earned a high-roller reputation at casinos, sunk more than a million into collectibles she hoped to resell at a profit, had pricey glamour photos taken of herself, spent thousands promoting a rock band, bought tickets and trips for friends and family, and shopped at Holt Renfrew and other posh stores. Investors’ money flowed through 27 bank accounts.
“Greed played a significant role,” Justice Richard Elson said. He believed Pastuch was also unduly motivated by a desire to look more successful than reality justified. “This motivation appears to have completely overwhelmed whatever moral compass the offender may have had.”
Among the aggravating circumstances, the judge noted the victims’ enduring losses — only $137,000 has ever been recovered — and sense of betrayal. Some were relatives, who trusted Pastuch and struggle with shame and broken relationships after encouraging friends and colleagues to invest. Others sincerely wanted to fund a product purported to help protect children.
“The victim-impact statements paint a picture of human tragedy,” said Elson.
He found no meaningful mitigating circumstances. Although Pastuch apologized Thursday for “what happened” and her lawyer said she expressed remorse to him, Elson was skeptical.
“(I) have considerable difficulty in believing that she has genuine remorse,” he said, noting she tried repeatedly to blame the province’s securities regulator, RCMP and even the victims during the trial.
After the sentencing, Peterson said, “I’m glad it’s over.”
But the legal proceedings aren’t. Pastuch had already filed a conviction appeal as of Friday and one for the sentence is expected to follow, as is another bid for bail. Released within days of her arrest in June 2014, she’d been out on release conditions until June 27 when Elson revoked bail upon finding her guilty. Her sentence is actually seven years and three months, but she got three months’ credit for remand time served.
Elson also ordered her to pay $5,523,507 in victim restitution, a companion to an order already made in 2014 for breaking securities laws. Any amount repaid will be deducted from a $5.5-million fine, reflecting the amount defrauded. Elson gave her 12 years to pay the fine after her release, and if she fails to pay up, is subject to a further five-year prison sentence.
“When you look at the whole thing, I think it’s fair,” said Peterson. “But it just went on way too long.”
In submissions Thursday, Crown prosecutor Dana Brule had sought 10 years in prison, while defence lawyer Kevin Hill argued for six. He appeared only for sentencing since Pastuch represented herself during an 80-day trial.
Elson extensively canvassed cases and found the appropriate range here was between six and 81/2 years.
“Today, the court agreed with the Crown that white collar crime in Saskatchewan is going to be treated severely, harshly for fraud that’s over a million dollars,” Brule told reporters afterwards.
Pastuch opted to attend court via video link from the Pine Grove Correctional Centre in Prince Albert.
In sharp contrast to the glamorous Pastuch investors once knew, she wore an oversized, prison-issue grey sweatsuit, the sleeves stretched and frayed.
She revealed her pale and unmade-up face outlined by tousled, greying hair only when Elson insisted she stand to hear the sentence pronounced.
As she did during Thursday’s three hours of submissions, Pastuch sat hunched over Friday, the closed-circuit camera catching glimpses of her shirt and hair but little else.
Hill told court Thursday only that a health condition made it challenging for her to travel or stand. Pastuch, herself, alluded to a “complex PTSD” condition. When she was upright, she held a finger in one ear, then the other.
Pastuch had wanted the judge to recommend she serve time at a Maple Creek healing lodge, but Elson instead recommended time in the Regional Psychiatric Centre in Saskatoon, based on the mental and physical challenges, “whatever they may be,” that she raised at trial. It’s not binding on corrections officials.
Peterson invested $200,000. He’s one of the lucky few to recover any money, getting just $37,000 back and a promise of future weekly instalments that never came. It altered the retirement he had planned, forcing him to take out a mortgage and sell a mobile home for winter getaways.
He doubts he’ll ever see restitution. And yet, “I really believe that justice will be served.”
Greed played a significant role. This motivation appears to have completely overwhelmed whatever moral compass the offender may have had.