Crown seeks 10 years for former Knowledge House executives

Federal Crown prosecutors argued on Tuesday that two of Nova Scotia’s most notorious white-collar criminals should be sentenced to 10 to 12 years in prison, prompting a judge to ask: “Where’s the body?”

Nearly 17 years after the dramatic collapse of Halifax educational software company Knowledge House, lawyers put forward sentencing recommendations for two architects of the sophisticated multi-milliondollar stock market scheme.

Mark Covan, one of three Crown attorneys handling the criminal trial, admitted that up to a dozen years in prison is a “harsh and significant” sentence.

But he said it’s justified given the gravity of the offence.

“A sentence that doesn’t recognize that someone has used their office, their education and their training to commit crime is an affront to the administration of justice,” Covan told the court.

“This type of crime could not have been conceived of by the average person, let alone carried out.”

Former Knowledge House president and CEO Daniel Potter and lawyer Blois Colpitts were found guilty in March of carrying out fraudulent activities in a regulated securities market.

The high-flying technology company traded on the Toronto Stock Exchange before a 2001 collapse that cost investors millions of dollars.

In a 207-page ruling in March convicting the pair, Nova Scotia Supreme Court Justice Kevin Coady said they artificially maintained the company’s stock price while securing new investors, who would make investment decisions based on a misleading impression of the stock demand.

On Tuesday, Coady questioned the lengthy sentence sought by the Crown, saying “denunciation and deterrence doesn’t necessarily mean throwing away the key.”