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An Ottawa real estate agent and his brother who were involved with now-bankrupt Golden Oaks Enterprises will have to pay back $658,000 to a bankruptcy trustee for their role in what an arbitrator has concluded was a Ponzi scheme.
Real estate agent Christopher Steeves and his brother Jeremy benefitted from annual interest rates on their investments from J.C. Lacasse’s Golden Oaks Enterprises that exceeded the threshold of 60 per cent that is set out in the Criminal Code as being illegal, arbitrator Douglas Cunningham found on Tuesday.
Cunningham also found that the Steeves brothers threatened Lacasse in order to receive secured second mortgages on 18 properties owned by Lacasse in the year before the company went bankrupt, protecting their own personal investments in the scheme when it became obvious Golden Oaks Enterprises was doomed.
This week’s decision is the latest development in the saga that began in July 2013 when J.C. Lacasse’s failed Rent-2-Own Canada and investment firm Golden Oaks Enterprises declared bankruptcy. Lacasse, who had twice before declared bankruptcy, still owes jilted investors about $12 million.
As a result of Cunningham’s decision, the Steeves brothers have been ordered to pay back the usurious interest fees and referral commissions they received. All of the second mortgages were voided.
Cunningham found that neither Christopher nor Jeremy Steeves was dealing with Lacasse at arm’s length.
The brothers “were business partners in JC Lacasse’s pyramid scheme,” wrote Cunningham, a former Ontario Superior Court judge.
Reached by the Citizen on Thursday, Chris Steeves vehemently disputed the arbitrator’s findings.
“I don’t agree with it,” Steeves said of the decision. “I was an investor who lost a bunch of my money. I believe I’m not part of it. That’s my position.”
Attempts to reach Jeremy Steeves weren’t immediately successful Thursday.
In the decision, Cunningham found that Lacasse’s rent-to-own business was a “front” for a Ponzi scheme that could only succeed if Lacasse continued to give promissory notes to investors at “rather staggering” and ever-increasing interest rates.
Cunningham said he was satisfied that Christopher Steeves knew it was a Ponzi scheme while his brother Jeremy “simply chose to put his head in the sand” and was “wilfully blind to what was going on.”
“The selling of promissory notes became the life blood of Golden Oaks Enterprises and Christopher Steeves knew it,” the judge wrote. “As long as new money could be found the scheme would keep going.”
But Cunningham found Golden Oaks was probably insolvent as early as July 2012, nearly a year before it declared bankruptcy.
“This was never a viable business and it was severely unprofitable,” Cunningham found in the decision which will now be used in the bankruptcy proceedings.
Cunningham found that Christopher Steeves violated the Real Estate and Business Brokers Act by accepting a commission from Lacasse on a property he had invested in that was later sold. The act states that no salesperson should accept commissions for properties from anyone except the brokerage that employs them. Steeves’s employer, Keller Williams, didn’t receive any portion of a $10,000 commission on the sale, Cunningham found.
Cunningham was also satisfied that Christopher and Jeremy Steeves received referral commissions on the sale of promissory notes to new investors they recruited, a violation of the Ontario Securities Act.
However, the judge rejected a claim by the receiver that Christopher Steeves was part of a “civil conspiracy” with Lacasse to try to injure investors for Steeves’s own personal gain.
“Certainly investors were solicited. That is the very nature of a pyramid scheme. These investors, blind as they may have been, were lured by huge returns,” wrote Cunningham. “I cannot conclude (Chris Steeves) knew that injury was likely to result to the complainants who without question suffered significant losses.”
The matter is expected to return to court on Oct. 15.
aseymour@ottawacitizen.com
Twitter.com/andrew_seymour
查看原文...
Real estate agent Christopher Steeves and his brother Jeremy benefitted from annual interest rates on their investments from J.C. Lacasse’s Golden Oaks Enterprises that exceeded the threshold of 60 per cent that is set out in the Criminal Code as being illegal, arbitrator Douglas Cunningham found on Tuesday.
Cunningham also found that the Steeves brothers threatened Lacasse in order to receive secured second mortgages on 18 properties owned by Lacasse in the year before the company went bankrupt, protecting their own personal investments in the scheme when it became obvious Golden Oaks Enterprises was doomed.
This week’s decision is the latest development in the saga that began in July 2013 when J.C. Lacasse’s failed Rent-2-Own Canada and investment firm Golden Oaks Enterprises declared bankruptcy. Lacasse, who had twice before declared bankruptcy, still owes jilted investors about $12 million.
As a result of Cunningham’s decision, the Steeves brothers have been ordered to pay back the usurious interest fees and referral commissions they received. All of the second mortgages were voided.
Cunningham found that neither Christopher nor Jeremy Steeves was dealing with Lacasse at arm’s length.
The brothers “were business partners in JC Lacasse’s pyramid scheme,” wrote Cunningham, a former Ontario Superior Court judge.
Reached by the Citizen on Thursday, Chris Steeves vehemently disputed the arbitrator’s findings.
“I don’t agree with it,” Steeves said of the decision. “I was an investor who lost a bunch of my money. I believe I’m not part of it. That’s my position.”
Attempts to reach Jeremy Steeves weren’t immediately successful Thursday.
In the decision, Cunningham found that Lacasse’s rent-to-own business was a “front” for a Ponzi scheme that could only succeed if Lacasse continued to give promissory notes to investors at “rather staggering” and ever-increasing interest rates.
Cunningham said he was satisfied that Christopher Steeves knew it was a Ponzi scheme while his brother Jeremy “simply chose to put his head in the sand” and was “wilfully blind to what was going on.”
“The selling of promissory notes became the life blood of Golden Oaks Enterprises and Christopher Steeves knew it,” the judge wrote. “As long as new money could be found the scheme would keep going.”
But Cunningham found Golden Oaks was probably insolvent as early as July 2012, nearly a year before it declared bankruptcy.
“This was never a viable business and it was severely unprofitable,” Cunningham found in the decision which will now be used in the bankruptcy proceedings.
Cunningham found that Christopher Steeves violated the Real Estate and Business Brokers Act by accepting a commission from Lacasse on a property he had invested in that was later sold. The act states that no salesperson should accept commissions for properties from anyone except the brokerage that employs them. Steeves’s employer, Keller Williams, didn’t receive any portion of a $10,000 commission on the sale, Cunningham found.
Cunningham was also satisfied that Christopher and Jeremy Steeves received referral commissions on the sale of promissory notes to new investors they recruited, a violation of the Ontario Securities Act.
However, the judge rejected a claim by the receiver that Christopher Steeves was part of a “civil conspiracy” with Lacasse to try to injure investors for Steeves’s own personal gain.
“Certainly investors were solicited. That is the very nature of a pyramid scheme. These investors, blind as they may have been, were lured by huge returns,” wrote Cunningham. “I cannot conclude (Chris Steeves) knew that injury was likely to result to the complainants who without question suffered significant losses.”
The matter is expected to return to court on Oct. 15.
aseymour@ottawacitizen.com
Twitter.com/andrew_seymour
查看原文...
