Fraud is not a victimless crime
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Just Google me, you’ll see what I’ve been through.”
Janet Watson is at the tail end of a 13year battle to get back money she lost in a fraudulent investment scheme.
“I learned a lot about fraud, about the law, about our justice system.”
Having accidentally become a fraud expert, Watson has been approached recently by Townshippers dealing with a similar situation.
In an effort to encourage victims in the area to come forward, Watson offered to share her story.
“Most people are private. I’m not; if I have something to say, I say it,” Watson commented.
Watson was part of a fraud case involving roughly 1,300 people from across Canada, the U.S. and abroad. In total, the group lost $130 million. She lost $68,000.
In Watson’s case, she had been working with a financial advisor.
“He kept suggesting this product. Finally, I bit,” she said.
Watson was told she needed a minimum initial investment of $50,000. She put her RRSP money into Mount Real Corporation, a publically traded company listed on the Toronto Stock Exchange.
After rumours began circulating about the company, a reporter went to an investor’s meeting and was kicked out after asking too many questions. That’s when the story broke.
The Autorité des marchés financiers (AMF) eventually shut down Mount Real and appointed an accounting firm as provisional administrators to deal with the creditors, including Watson.
Of course, the money was nowhere to be found. Only $5 million was ever recovered, $3.5 million of which went to legal and accounting fees.
According to Watson, the creditors banded together and hired class action lawyers.
“We sued the accounting firms that did the books,” Watson said, explaining that the firms should have seen some red flags when reviewing Mount Real’s numbers.
The class action suit took almost four years. After a three-day settlement conference in 2016 in which Watson participated, a settlement was reached for $43 million, around 47 per cent of the creditors’ net capital loss.
“Many of the victims were elderly,” Watson said. Going to court or holding out for more money could have taken years. “Getting something back was better than nothing.”
Members of the class action suit received compensation cheques in December of 2017, Watson said.
“In my case, we didn’t do anything wrong except trust someone we shouldn’t have trusted,” commented Watson.
“Every one of us dealt with a financial advisor,” she added.
“I don’t know if we could have avoided this. In hindsight, I should have investigated the company more myself,” Watson said.
“It was a multi-million dollar company operating out of half a duplex.”
“There’s this perception that fraud is a victimless crime,” Watson said.
With many Canadians living paycheck to paycheck, there is a general lack of sympathy for people who have large lump sums available to invest. Then there is the suggestion, according to Watson, that people got what they deserved because they were being greedy or too naive.
“People have to go back to work. They struggle, they get divorced. In my group there was one suicide,” Watson said. “There is suffering.”
Knowing what she knows now, Watson stressed the importance of coming forward and talking about fraud.
“Speak up if you can, if only to protect other people from going through the same thing.”
“In small communities, less people talk about it,” Watson said.
“The bigger picture is these things are happening all the time and we don’t hear about them.”
“Whether it’s a big or small case, they all have a similar story. People were trusting, they believed in somebody,” Watson said.
“The bottom line for any of this is you have to fight. You may not get anything anyway, but at least you get some justice,” she said.
Above and beyond the money, Watson said speaking out can attract support from other victims. Knowing you are not alone is a big help, she said.
Currently, there is a possible fraud being investigated involving roughly 100 creditors, most of whom live in the Bury/cookshire area.
A former Bank of Montreal employee, Lucie Chapdelaine-talbot, is said to have solicited funds from people in the area over the past 15 years for an investment scheme that never panned out, resulting in a collective loss of close to $2.5 million among locals.
Chapdelaine-talbot declared bankruptcy on March 16.
According to figures obtained from the Office of the Superintendant of Bankruptcy Canada (OSB), her liabilities were listed at $2,532,044 and her assets at $104.
Bankruptcy Insolvency Trustee Pierre Guay met with Chapdelaine-talbot’s creditors on April 5 to explain that his client has no money to pay back.
Guay said the creditors were mainly older, between 60 and 90-years old. Some had given Chapdelaine-talbot $5,000, others between $40,000 and $100,000 and some even gave amounts as high as $200,000, thinking it was being invested on their behalf.
“Looks like a ponzi scheme,” he commented. According to Guay, the bank fired Chapdelaine-talbot as soon as it suspected foul play.
Even so, according to Chapdelaine-talbot’s creditors, the bank, where some of the transactions were said to have taken place, shares responsibility for the alleged fraud.
Sherbrooke Lawyer Marc Vaillancourt, with Vaillancourt Riou & Associés Avocats, confirmed that he met with roughly 50 of Chapdelaine-talbot’s creditors on Saturday. His firm is looking at the file, he said, without commenting further.
The Record called the Bank of Montreal Cookshire branch for comment but did not get a response by press time.