Commission releases list of deadbeat fraudsters

Alberta’s securities regulator is turning to a new motivational tool in an attempt to get the province’s fraudsters to pay fines and penalties for breaking the law: shame.

The Alberta Securities Commission on Thursday released a list of people and companies that have failed to pay charges levied for misleading the public, perpetrating fraud on investors and other financial crimes.

This is the first time the province’s securities commission has published such a list, ASC spokesperson Mark Dickey said in an email.

The list includes 135 names — though some people are listed twice, for separate infractions — and dates back to 2005. Dickey said the total amount listed individuals and companies have failed to pay is $104.7 million.

He said the ASC has collected, as of March 31, $22.9 million from the delinquents.

“Collecting money from wrongdoers continues to be a very difficult process as they have often spent, hidden, or simply lost any funds they have made when breaching securities laws,” Dickey said in an email.

“If there is a chance we may recover even a modest amount, we pursue it,” he said.

Some of the names on the ASC’s deadbeat list include people who, subsequent to being punished in the ASC’s quasi-judicial process, have been convicted of fraud in court and jailed, such as Calgary con artists Milowe Brost and Gary Sorenson.

The two were convicted of fraud and theft in February for running a huge Ponzi scheme, which investors say bilked them of a cumulative total of $400 million. Brost was also convicted of money laundering.

The ASC list shows Sorenson hasn’t paid one cent of the $2 million he owes in fines. Brost has been penalized twice and has paid a $650,000 penalty from 2007 but none of the $3-million penalty levied against him in 2012.

Brost was also ordered to pay the Canada Revenue Agency $390,878 in evaded taxes earlier this year.

“Holding respondents accountable for their misconduct is important for investor protection and for protecting the integrity of the Alberta capital market,” ASC chairman and CEO Bill Rice said in statement.

“Enforcing commission orders, including collecting outstanding amounts owed, is key to effective deterrence.”

The ASC released its annual report on Thursday, which showed the regulator had issued $2.8 million in administrative penalties in 2015 but collected only $122,000 from those penalties.