Fraud nets city man four years in jail following arrest in U.S.
By Al Beeber - Lethbridge Herald on August 17, 2024.
LETHBRIDGE HERALDabeeber@lethbridgeherald.com
The Alberta Court of Justice on Thursday sentenced Ronald James Aitkens to four years in jail after he was previously found guilty of fraud and making false or misleading statements in an Offering Memorandum.
Between 2005 and 2007, Aitkens raised over $35 million through three Offering Memorandums with 1,475 investors and diverted at least $10.7 million to other projects through his personal companies.
After being found guilty, he failed to appear for sentencing in November 2023, and a Canada-wide warrant was issued for his arrest. Aitkens was arrested in Montana and returned to Canada on Aug. 8.
The 70-year-old Aitkens, of Lethbridge, was arrested with the help of the Whitefish, Montana unit of the U.S. Border patrol office based in Spokane, Wash. When prosecution of the matters started, he was 59, according to the Alberta Court of Justice judgement. It says the prosecution of his case was frequently delayed, “almost always by the accused” and those delays have always been accompanied by waivers of Aitkens right to trial within a reasonable time.
There were also delays because Aitkens brought a post-conviction application to reopen the trial and had surgeries on both knees.
Aitkens was to be sentenced on Nov. 16, 2023 when Calgary Court of King’s Bench was told that he had fled the country weeks earlier.
Aitkens was found guilty in July 2020 of on one count each of fraud and making false or misleading statements in an offering memorandum, contrary to the Securities Act (Alberta). Sentencing was delayed during the pandemic and potential restitution was also to be determined at the 2023 hearing where a Canada-wide warrant was issued for his arrest.
The convictions stemmed from the distribution and sale of securities through the use of the offering exemption in a real estate investment opportunity known as Legacy Communities, Inc.
On Thursday, Justice L.W. Robertson ordered a total sentence of four years in jail, apportioned as 39 months on the fraud conviction and nine months on the misleading statements conviction, to be served consecutively. Orders made by Robertson in Nov. 2023 remain in effect, namely, that Aitkens immediately resign all positions that he holds as a director or officer of any issuer and is permanently prohibited from:
· Acting as a director or officer of an issuer;
· Trading in or purchasing securities or derivatives;
· Acting in a management or consultative capacity in connection with activities in the securities market; and
· Using any exemption contained in Alberta securities laws.
“This sentence clearly demonstrates that those who defraud investors will face consequences for their actions no matter where they try to hide,” said Cynthia Campbell, Director of Enforcement at the ASC in a media release. “The ASC is committed to securing appropriate sentences of imprisonment for such offenders and ensuring that fleeing the country will not shield them from accountability.”
The Alberta Court of Justice judgement says “the accused was the operating mind behind Legacy and exercised full control of Legacy’s assets. Legacy was sold to investors exclusively as an opportunity to purchase and develop a 503-acre parcel of land immediately west of Calgary.
“The parcel was very precisely and carefully described as were the risks associated to that project. Some of the $35.2 million raise for the project was indeed dedicated to the project. However, very early in the process the accused diverted significant Legacy sums to other projects which he owned or controlled personally,” says the judgement.
“These other projects had nothing to do with Legacy. They were not authorized under any of the three OMs used to raise Legacy’s capital. The transfers of Legacy’s assets were done secretly and deliberately using numbers corporations which the accused wholly owned. The accused was the only one who stood to benefit from these transactions.”
One project was a $4.6 million investment in a proposed holiday resort off the western coast of Panama and another was a $5.3 million diversion of Legacy funds to a commercial property south of Edmonton known as Railside. Another was the purchase of two quarter sections of land near Granum.
The judgement says the Legacy investment was deprived of at least $10.7 million in capital by those transactions. That figure rises to $11.7 million if included are the unauthorized – and unnecessary – transfer of water rights which were sold back to Legacy in the Granum transaction.
“None of the disputed transactions were authorized under the OMs which very specifically detailed that investor funds would be used only for the Legacy lands,” says the judgement.
It says the secret and unauthorized use of Legacy funds “was at the core of the accused breaches” which led to his convictions.
The judgement adds the Legacy project failed with there being numerous reasons for that including that planning permission to develop the lands wasn’t granted by municipal authorities.
While Aitkens has no criminal record, the judgement says he has a history of receiving sanctions from the ASC as well as the Financial and Consumer Affairs Authority of Saskatchewan.
According to the Medicine Hat News, Aitkens was a former pastor in that community and the former head of the Foundation Group of Companies. In 2012, the Foundation Group of Companies began entering court creditor protection proceedings as a schedule disbursements to investors came due. That included payments to dozens of investors with Medicine Hat addresses who invested amounts of up to $200,000 with the companies.
Thursday’s judgement noted Aitkens has shown no remorse. It said that he has been involved in charity efforts in several countries, mostly associated with religious organizations, donating time and money to causes.
But it adds “individuals who perpetrate frauds like these are usually seen in the community as solid, responsible and law-abiding citizens. Often they suffer personal and financial ruin as a result of the exposure of their frauds” but those factors in themselves can’t justify any departure from the sentencing range.
It says the penitentiary term of four years “is reasonable in light of the accused conduct and his degree of responsibility for committing the offences. The amount of investor funds targeted by the accused is significantly higher than in comparator cases.”
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What kind of message does this light sentence send to other potential fraudsters…steal $12 million then flee the country to avoid prosecution and u only get 4 years. Yeah this is a real deterrent (insert sarcastic emoji) here. George