Church denies knowledge of N.S. Ponzi scheme
A church in Lower Sackville, N.S., says it wasn't aware of any of its members being recruited to invest in a failed scheme that is currently before the Nova Scotia Securities Commission.
The commission is holding a hearing into an alleged multimillion-dollar Ponzi scheme involving Jabez Financial Services Inc. The Panama-registered firm was dissolved in 2007 and assets of about $1.5 million were recovered from a Caribbean bank.
The commission alleges that Jabez brought about trades worth $3.2 million US from 137 Nova Scotians without being properly registered.
"The respondents were promising returns of 10 per cent per month compounded, which equates to about 214 per cent annually," said Heidi Schedler, an enforcement lawyer with the commission.
Schedler said the three ringleaders of the scheme — Quintin Sponagle, Trevor Hill and Larry Beaton — are all connected to the Rock Church in Lower Sackville.
"We do have information that indicates that each of the respondents were members of the Rock Church and that they did contact a number of the parishioners of that church," said Schedler.
"Whether they were targeting specifically that church, I can't say. But there certainly is an association with that church."
On Thursday, the director of administration for the Rock Church said the organization wasn't aware of the scheme, nor would it have tolerated it.
Beaton fined $25,000
"As far as it being widespread in our church, no one has come forward indicating that they have been involved, lost any money or anything of that nature," Christopher Ivany told CBC News.
"As far as that goes, what people do outside the church is up to them. This is a house of worship. We don't make it out to be a marketplace."
Ivany said the church knows two of the three people cited by the Nova Scotia Securities Commission.
"Two of the gentlemen that have been mentioned have been a part of this church and have attended church here," he said, referring to Hill and Beaton.
"Mr. Sponagle — we've never met him as far as I know. He's never attended even a service here at this church so that's pretty much all we know about that."
The Nova Scotia Securities Commission said it was common for these types of investment schemes to occur in a church or another type of faith organization.
"[It] is often referred to as affinity fraud. Individuals are playing on the trust and the faith that are afforded to them through that organization," said Schedler.
Earlier this week, Beaton — a self-employed carpenter — accepted a $25,000 fine for his role in promoting the Ponzi scheme.
The other two — Sponagle and Hill — have not been at the hearings this week. The commission said Sponagle went to Panama two days after he found out the commission wanted to interview him. Hill, who lives in Nova Scotia, has declined to attend the hearings. Neither are legally compelled to attend.
The hearings continues next week.