Nova Scotia

Panel finds N.S. men guilty of bilking investors using 'foolish and extraordinary' lies

The Nova Scotia Securities Commission has found 2 men guilty of fraud and other infractions in a long and complicated case that cost investors hundreds of thousands of dollars.

N.S. Securities Commission says Douglas Rudolph and Peter Mill cost clients hundreds of thousands of dollars

The long and complicated case cost investors hundreds of thousands of dollars. (David Donnelly/CBC)

The Nova Scotia Securities Commission has found two men guilty of fraud and other infractions in a long and complicated case that cost investors hundreds of thousands of dollars.

Douglas Rudolph and Peter Mill solicited investments from a variety of people they knew, making lavish promises about the returns on those investments and bizarre excuses when the promised money failed to materialize.

In a decision released this week, the commission found Rudolph and Mill committed the frauds as individuals and as principals in two companies: CanGlobe International Capital and CFG-CN Ltd.

The commission panel heard from more than a dozen witnesses, including people who had been persuaded to mortgage their homes or cash in their RRSPs in order to invest with the pair.

Lots of excuses

One investor was told that his money would be used to facilitate the transfer of $600 million from Germany.

When the money didn't arrive as promised, the men said there had been complications because the cash was potentially linked to funds stolen during the Second World War.

Another delay was blamed on people who could not sign the cheques as required because they were tied up with the Olympics.

Other excuses offered in email exchanges with investors who were pressing for answers included a weak euro, a weak dollar, a slowdown in the economy, and the Chinese New Year. 

'Foolish and extraordinary'

In its ruling, the commission said the excuses were "foolish and extraordinary."

Rudolph also offered tax advice to some of his clients; advice that put them afoul of the Canada Revenue Agency, resulting in reassessments and higher tax bills.

"There is a clear pattern to Mr. Rudolph's behaviour," the ruling states.

"Mr. Rudolph was a competent bookkeeper but held himself out to be an accountant and tax adviser. He gained the trust of the witnesses, most of whom were his clients and all of whom were his friends."

'I need my money,' retiree pleaded

As weeks dragged into months and years, the tone of correspondence between Rudolph and his clients got harsher.

"I may have a couple more months here so I need my money," one 80-year-old retiree wrote.

"The $50,000 you promised is vital now. Help me Doug…. I hate losing sleep over this."

The wife of one frustrated investor was blunt with Rudolph in her email, telling him she was "finished with all the bullshit that has been going on for the last 10 years."

While some did get a small portion of their investments back, most saw little or no money from their dealings with Rudolph and Mill.

The losses forced one retiree to return to work part time. Another had to sell her house, sell her furniture and jewelry, move in with her sister and give up on her dream of living part of the year in Mexico.

Others had to scale back their lifestyles and abandon plans to provide financial help to family members.

Victims were preyed upon

The commission concluded that Rudolph and Mill "preyed upon the witnesses, betraying the confidence they had established by false statements of their business acumen, by false statements of the destination of the funds invested and by misappropriating the funds when the witnesses had advanced them."

The disciplinary panel has given the two sides until the end of this month to make submissions on what penalties Rudolph and Mill should face.

Before the hearing got underway, Rudolph tried to derail it with a flurry of motions alleging, among other things, that his charter rights were being violated by the process.

The hearing panel considered and rejected all his arguments.

Success in court

He and Mill had better success in court, however.

The pair faced criminal fraud charges for their actions, but a Nova Scotia Supreme Court justice stayed the charges, saying their charter rights had been violated.

The problem was that police had seized files belonging to Rudolph's lawyer without first getting a warrant.

That lawyer, Mark David, was disbarred for his part in the schemes.

In its 2009 decision, the Nova Scotia Barristers' Society said David could not apply to re-enter the practice of law for at least five years. 



Blair Rhodes


Blair Rhodes has been a journalist for more than 40 years, the last 31 with CBC. His primary focus is on stories of crime and public safety. He can be reached at