Investors' money spent on cars: securities commission
The mastermind behind an alleged Ponzi scheme is accused of treating an investors' fund as a personal bank machine to pay for vehicles, homes and vacations.
Final evidence was presented Tuesday at a Nova Scotia Securities Commission hearing into Jabez Financial Services Inc.
The commission claims that the Panama-registered company brought about trades worth $3.2 million US from 137 Nova Scotians without being properly registered.
Some Nova Scotians liquidated their RRSPs and even a child's inheritance, according to the commission.
Commission investigator Lianne Bradshaw described interviews with investors like one 68-year-old woman who was unable to resist the lure.
"If she put $10,000 into her account, in four years' time she would have a little more than $1 million," Bradshaw said.
Bradshaw said investors were recruited by word of mouth, sometimes from church congregations like Rock Church in Lower Sackville, and there was never any paper record.
She said investors were not given details about where the money was being invested, or they were told that some of it would go to charities.
According to the commission, the money was sent to an offshore account in Curacao that was controlled by Jabez president Quintin Sponagel. He used it to buy everything from vehicles to vacations, the commission said.
In one six-month period in 2006, Sponagel withdrew $133,000 in cash, said Heidi Shedler, the commission's lawyer.
"As you or I would use our own bank account with the exception that the money funding that bank account was being provided by other Nova Scotians," she said.
The company was shut down after complaints from investors. In the end, investors lost 87 cents on the dollar, according to the securities commission.
Spongle is believed to be in Panama. His chief lieutenant, Trevor Hill, is not attending the hearing either. Neither are legally required to be there.
They face millions of dollars in fines.