The Court of Queen’s Bench of Alberta found a Calgary man, James Harvey Cameron, guilty of fraud and tax evasion in connection with an investment scheme that, according to the Canada Revenue Agency (CRA), saw him divert $2.5 million of investors’ funds and evade $673,871 in federal taxes. The court stayed a theft charge against him.
Cameron ran Venture Trading Inc. (VTI), a private company that raised more than $8.7 million from investors to invest in startups, according to the court’s decision. Of that total, approximately $880,000 was returned to select investors, “but most of the investors lost their entire investment,” the court’s decision notes.
The CRA began auditing VTI in 2006 on concerns it had engaged in an illegal RRSP tax-stripping scheme, but a formal audit was never completed “due to the lack of documentation, books and records needed.” The CRA’s criminal investigation division then launched an investigation in 2009.
As a result of that inquiry, the Crown laid charges alleging that Cameron “defrauded investors by making false statements about VTI’s investments and profitability and that he falsely promoted VTI as a company that would make large profits for investors through exchange trading and emerging technologies, sending them statements showing fictitious large monthly returns on their invested capital.”
The Crown also alleged that Cameron diverted the proceeds of the sale of shares in companies he controlled offshore and then converted the investors’ money for his personal use, including buying a horse for his daughter and spending $75,000 on a cruise to the Bahamas for his family and neighbours.
Cameron denied all the accusations, arguing that his business failed and was not a criminal scheme, the court notes: “He testified that VTI’s investment funds were spent in genuine, viable investment opportunities and business ventures over several years.”
However, the court concluded that “the evidence establishes beyond a reasonable doubt that Cameron’s conduct and activities were fraudulent and caused the investor’s deprivation.”
Furthermore, the decision states, “Cameron disguised transactions as write-offs without providing a plausible explanation for the loss of investments,” and that “the financial records show investor money disappearing to offshore bank accounts held by Cameron or numbered companies controlled by him.”
Adds Justice P.R. Jeffrey in the decision: “I also infer Cameron’s intent to defraud from the fact that he kept VTI’s losses secret from its investors and Cameron continued to lie to them about VTI’s profitability. This was the only way Cameron could continue to promote VTI and sell shares to new investors.”
Securities regulators in British Columbia, Alberta and Saskatchewan, and courts in Manitoba, had previously sanctioned Cameron in connection with illegal distributions and unregistered trading. Those proceedings resulted in monetary sanctions and trading bans.
Victims of the scheme, which operated between 2002 and 2006, have the right to appear at his sentencing hearing to seek restitution, or to make a victim impact statement, in a hearing that will take place between April 24 and May 12, the CRA says in a statement.
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