Eron Mortgage and its top officials have been found guilty of perpetrating one of the biggest swindles in Canadian history. The British Columbia Securities Commission estimates that 3,200 investors, most of them from B.C., lost $170 million.
The commission found that Eron's former president, Brian Slobogian, and its vice-president, Frank Biller, lied to investors, misused investors' money, and failed to keep proper records. Many investors lost their life savings. Some also lost their homes.
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Both executives and the company were also convicted of selling securities without being registered. They also never filed a prospectus as required by securities laws.
Investors thought their money was going into real estate projects in western Canada and the U.S.
Eron and its top executives are the subjects of a criminal investigation by the RCMP. Slobogian now lives in Nevada and did not co-operate with the securities investigation. Biller did testify, though, and denied knowledge of any fraud.
Eron investors have also launched a class-action suit against the B.C. Registrar of Mortgage Brokers. They're alleging the registrar knew a year before Eron's collapse that something was wrong, but did nothing.