Biller gets 3 years for Eron fraud in B.C.
The chief salesman for what has been described as the biggest fraud in B.C. history was sentenced to three years in prison Thursday for his role in the Eron mortgage fraud.
Frank Biller had pleaded guilty earlier this year to one charge of theft and four counts of fraud in the 1997 collapse of Eron, which chewed up $240 million of investors' money.
Biller is a former junior hockey player who rose to become No. 2 at Eron under boss Brian Slobogian.
Slobogian is in prison for six years after pleading guilty to charges of fraud and theft related to Eron.
In sentencing Biller to three years in a Vancouver court, Justice Mary Ellen Boyd said he was less culpable than Slobogian in driving the company down, but Biller nevertheless consciously withheld crucial information from investors.
With almost no business experience and little training, Biller became Eron's vice-president and chief mortgage broker, in charge of a 40-member sales department. They sold Eron real estate developments in British Columbia, Alberta and the United States to thousands of investors, mainly Canadians.
Biller promised high rates of return on mortgages placed on what he and Slobogian said were valuable properties with guaranteed security. Investors crowded hotel ballrooms to hear Biller's promises, many put their life savings into Eron mortgages.
But none of Eron's projects made money and most were over-mortgaged, some with as many as five mortgages. Borrowing from Peter to pay Paul, Slobogian used money intended for one project to keep another above water.
And some of the money went to lavish parties and excursions for Eron's employees, homes, golf club memberships, holiday properties and expensive Rolex watches.
By the time B.C. regulators shut down Eron in October 1997, investors had lost everything. The company's bankruptcy trustee has been able to recover only about 18 cents on the dollar.
The British Columbia Securities Commission said Eron Mortgage Corp. was the biggest fraud in B.C. history.
Biller has recently been living in Toronto. The Ontario Securities Commission alleges that, while living in Ontario, Biller has traded in securities of Extreme Poker Ltd., a non-reporting issuer in the United States, without being registered in accordance with Ontario securities laws.