Millions gone, lives destroyed The truth about the charming Mr. White
‘If he wasn’t dead, I’d kill him,’ says Randy Brown, who lost his life savings after placing his trust in the former president of the Aurora Chamber of Commerce and his suspected Ponzi scheme
Jeffrey Mylor White was a pillar of his community, a hardworking insurance broker and financial planner always ready to dispense freely of his time, advice and laughter.
As a student of the martial arts, White embraced the principles of modesty, courtesy, integrity, perseverance, and above all, trust.
“He was the guy a lot of people wanted to be,” said Chuck Kochman, a friend for more than 30 years, now a victim of the scheme. “He was trusted by everybody because he acted and made you believe he was trustworthy.”
Since his death on July 31, 2011, of a brain aneurism at the age of 56, clients and victims are using other words to describe the financial guru who took to his grave the secret of what hap- pened to millions of dollars.
“Scam artist” and “Ponzi schemer” are two of the epithets hurled about by investors as details emerge of how White, a former president of the Aurora Chamber of Commerce, treated retirement funds of others as his own personal piggy bank.
The known investors say they are out as much as $5 million.
Randy Brown is one of the victims. His trust in White, he said, has left him broke, depressed and suspicious.
“Jeffrey White stole my money, my hopes and dreams.”
RANDY BROWN
INVESTOR
Brown is also in treatment for anger management.
“If he wasn’t dead, I’d kill him,” said Brown, a former Gravenhurst businessman who lost his home in a fire in the spring of 2011, only to learn a few months later that life savings he had calculated, with lost interest, at about $240,000 are probably gone, too.
“Jeffrey White stole my money, my hopes and dreams,” said Brown, 56. His wife, Henny, had known White’s family for years. White’s mother, Anne, had taught Henny in grade school.
The Browns, like the other investors, had no reason to suspect “Mr. Community” had gone rogue. The 7 per cent he offered was a good rate at a time when banks were offering little and stock markets seemed too risky. Investors say the rate was not high enough to set off alarm bells.
The scheme unravelled in the months after White’s sudden death. Trustees of White’s estate and stable of insolvent companies, including Jeffrey M. White & Associates Insurance, and Aurora Financial Investments, became “extremely uncomfortable with the discoveries they made.
“The Trustees have some reason to believe this operation may have been a Ponzi scheme,” the trustees’ lawyer said in court documents requesting the firm Soberman Inc. be appointed as receiver.
APonzi is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors. What Soberman found when they stepped in came as a shock.
“There are no funds or assets to which the investors’ funds can be traced,” the receiver says in a report filed with the Ontario Superior Court. “Mr. White solicited investments from many of his insurance clients, while evidently treating their moneys as funds that were loaned to him for him personally for his general use. There are many victims who lost their life savings.”
White’s business and personal accounts were intermingled, making the tracing of individual investments virtually impossible.
During this time White had a lavish lifestyle which included two large homes in Aurora, Ont., a Porsche sports car, a time-share cottage in Muskoka, ocean cruise vacations and exclusive golf club memberships for his entire family.
Hardest hit by White’s apparently fraudulent activities are two dozen longtime clients dubbed the “Aurora 7% Accounts,” a reference to the guaranteed 7 per cent annual return. Collectively they had $2.8 million invested at the time of White’s death, but with interest owed, investors estimate total losses of about $5 million.
Among them is Aurora psychologist Joyce Weinberg, who at one time had invested $1.4 million. Weinberg, like many victims, declined to comment. Weinberg did not say why she would not talk, but others said they were concerned speaking out would affect the case. Wendy Dunn, a single mother who invested $61,000 and counted on the proceeds to pay for her child’s education, said she feels “betrayed” by someone she considered a friend.
Other investors have yet to be located or come forward with their claims.
Despite an intensive search of 15 corporate and eight personal bank accounts, receiver Soberman was only able to retrieve about $18,000. At the time of his death, White was carrying more than $300,000 in credit card debt and was behind on golf membership fees at ClubLink and his time-share at Diamond’s Edge Muskoka Cottages.
The vintage Porsche 911 Turbo he drove around the GTA to impress friends and clients was leased.
In addition to selling insurance and financial services, White also moonlighted as a “life coach,” and his life appeared very, very good. He oozed success and wealth, taking expensive vacations, golfing and racing Porsches.
“If you can’t trust the president of the Chamber of Commerce, who can you trust,” said Brown, the former Gravenhurst businessman. The couple who used to own their own home and business now run a bakery and gift shop in Bala, on rented premises and work seven days a week.
Chuck Kochman, 65, considered White a friend as well as his insurance agent and investment counsellor. He had no qualms 10 years ago about handing White $50,000 on his promise that it would double to $100,000 by this year.
“It’s hard to put a guy on trial if he’s dead,” Kochman said. “I’m not sure it started out to be a scam. He may have gotten into trouble and he may have decided to use any means he could to extricate himself from that trouble. If it was a Ponzi scheme, or just Jeff’s scheme, it was totally wrong and hurt a lot of people.” And while he stiffed investors for millions, White made sure his family was well looked after, making his children, Rebecca, 25 and Dustin, 22, and his parents, Bev and Anne White, benefactors of 10 life insurance policies worth more than $2 million. His wife, Mari, died in December 2005. It may be months before investors know whether they’ll see a penny, but White’s parents have already received approximately $327,000 from insurance policies, and his daughter, Rebecca, has cashed in about $187,000, according to Soberman. White also made his kids benefactors of an additional $1.7 million in life insurance policies to be paid into a trust fund, from which they can draw until they are in their forties. A nasty court battle may be looming between the investors and White’s children, fuelled by rumours of secret bank accounts, boxes of documents moved out of the office the morning after his death, and safety deposit boxes. Soberman has so far seized $1million from one RBC insurance policy and has asked a court to redirect the $1.7 million insurance payouts from the trust for the kids to the estate so that it can be distributed to creditors. Daughter Rebecca White has hired an experienced estate lawyer to fight the creditors in court. She declined to comment when contacted by the Star. “I am not comfortable, discussing anything at this time,” she said. Her grandparents could not be reached for comment. Suzana Popovic-Montag, lawyer for the children, declined the Star’s request for an interview or comment on investors’ claims that the proceeds of White’s life policies rightfully belong to them, saying it would be improper to talk about a case that is before the courts. The receiver is also seeking the proceeds from the sales of two homes in Aurora — a 3,000-foot red brick house on Kennedy St. W., which was both corporate head office and home to his parents, and a large four-bedroom home on Owl’s Foot Cres. where he lived. Both were heavily mortgaged. Owl’s Foot has been sold, but the three-storey historically designated home on Kennedy St. W. languishes on the market despite a drop of $250,000. Originally listed for $849,000 it is now listed for $599,000 and has a $462,000 mortgage on it. Investors say there were no red flags but court documents show White had money problems dating back to the early 1990s when his attempts to develop a familyowned campground in Muskoka into a luxury hotel and 18-hole golf course ended in disaster. Reassessment of his personal income taxes of the years 1996 to 2000 resulted in a substantial debt to Revenue Canada. In that court case can be found White’s side of the story. Testifying under oath at his tax court appeal, White claimed a squabble with his sister left him $1.3 million in debt and forced him to turn to private lenders to keep the development afloat. The judge in the case called White’s evidence “vague” and his record keeping “woefully inadequate.” Estimates of losses were just that, because White did not provide any evidence as to where he got the money, the judge found.
“By moving funds about through numerous bank accounts, by failing to have proper books, he made it impossible to prove his case,” the judge said in his findings rendered on May 23, 2002.
White later testified that the 7 per cent accounts were all personal loans to him with no paperwork to support the deals. In 2006, he dropped his appeals and paid the taxman $400,000 in arrears and penalties.
Then “Mr. Nice Guy” got back in his Porsche and went about his business, all the while backslapping and glad-handing clients into believing their phantom investments were safe. Life was so good he took his parents on a luxury cruise in Europe.
Shortly before the case ended, White wrote a three-page letter to his mother laying out specific instructions on how to wind down his businesses in the event of his “death, mental or physical incapacitations.”
“You have signing authority on all companies and business deals, therefore you are Queen,” White wrote to his mom.
“Please don’t panic for what I have laid out here should take care of things. Follow my directions because I have always had our family’s best interests at heart.”
Of particular intrigue to investors is a paragraph on page two: “Client $, yes this is difficult but we can wrap this up. The insurance proceeds and cash on hand (safety deposit box) should suffice until all the assets can be liquidated.”
But by the time Soberman was appointed on Dec. 1, 2011, White’s safety deposit box at the National Bank had been closed.