Court hears of financial adviser’s mental health issues

A former financial adviser who pleaded guilty to defrauding clients of more than $3.1 million was “brought down” by a combination of mental health issues and medications that weren’t working for him, court heard Tuesday.

Scott Reeves, who operated through Reeves Financial Services Inc. and three other companies, has lived with major depression since at least 2004, as well as severe sleep apnea and chronic anxiety, forensic psychiatrist Dr. Julian Gojer told the sentencing hearing.

Reeves had been treated with antidepressants as well as antianxiety medication by a past doctor, who prescribed some of the drugs at a higher-than-recommended dosage, which can lead to brief hypomanic episodes, he told court.

Defence lawyer John Erickson argued his client was “blinded” by his mental health issues and medications.

“Mr. Reeves was, in essence, brought down by some underlying mental health issues,” he said.

The overprescription of medication gave Reeves, 47, a sense of “grandiosity” — “a sense that he could not fail,” Erickson said.

Court heard Reeves was taking his clients’ funds to expand his business. He believed he would replace the money before anyone found out it was gone.

“He fell into this scheme, believing that he would be able to make things right,” Erickson said.

Reeves had provided a broad range of financial services to local clients for 25 years when he was charged in 2014.

His victims included a dog groomer, a doctor who is a longtime friend, a family friend of 20 years, and one of Reeves’ own family members.

Court heard at the start of the sentencing hearing in April that most of the victims had been saving for their retirement, but are now destitute and having to work beyond their late 60s — despite health problems and family challenges.

They invested their money with Reeves in mutual funds, but on his advice, transferred them through him to Guaranteed Investment Certificates at credit unions or banks — or so they thought. Some, when they became suspicious, contacted the credit union or bank where their GICs were supposed to be invested, only to learn the institutions had no record of them.

Reeves briefly addressed the court Tuesday when asked by Justice Andrew Goodman if there was anything he wanted to say.

“I’m very sorry for what has happened,” he said. “I’m eager to make restitution to the victims here today.”

Assistant Crown attorney James Vincelli told court he believes a five-year prison sentence would be appropriate for Reeves, given the magnitude and duration of the fraud, and the degree of planning that went into it.

He noted Reeves had been siphoning money off one of his clients for as many as seven years before he was arrested.

“Mr. Reeves had ample time to reflect on what he was doing,” Vincelli said.

Erickson said he is seeking a conditional sentence of two years less a day or 18 months in jail — followed by a three-year probation in both cases. He said Reeves has begun counselling and has complied with bail conditions.

Goodman ruled Reeves must return to court June 27 when he will deliver his decision.