CALGARY — Just one victim of what authorities have called the largest Ponzi scheme in Canadian history showed up Monday to speak out against the two men who stole her money and left her feeling “ashamed and embarrassed.”
Gary Sorenson, 71, and Milowe Brost, who is 61, were found guilty of fraud and theft in February for an elaborate scheme in which investors were promised unrealistic returns. Brost was also found guilty of money laundering.
The court received 600 victim impact statements, but only Carole Knopp showed up to express her feelings at the sentencing hearing for the two men.
“It’s all been a very demeaning, humiliating experience,” said Knopp, who lives in Enderby, B.C.
“At 69, I face debt for the rest of my life.”
More than 2,400 investors from around the world lost between $100 million to $400 million in the scheme, and many people lost their life savings.
Ponzi schemes involve taking funds from new investors and using them to pay old ones.
One set of fraud and theft offences took place between 1999 and 2008 and involved companies named Syndicated Gold Depository SA, Base Metals Corporation LLC, Bahama Resource Alliance Ltd. and Merendon Mining Corporation Ltd.
More wrongdoing took place between 2004 and 2005 with a company called Strategic Metals Corp.
Investors were promised a 34 per cent annual return on an investment of $99,000, which was supposed to grow to just over $1 million within eight years.
They were told that the business involved selling gold for refining and that it was “low risk.”
Crown prosecutor Iwona Kuklicz said both men were “equally culpable” and suggested they each receive the maximum sentence of 14 years.
“It was a multi-levelled Ponzi scheme — a very well-planned and thought-out scheme to defraud people of their money,” said Kuklicz.
“They did it for their on personal benefit, for their own greed,” she added. “There is no remorse from these accused.”
Kuklicz said many of the victims are living “below the poverty line” and have to rely on food banks.
Lawyers for Sorenson and Brost argued their clients should get sentences in the eight to 10 year range.
“My client is under no illusion. He has committed a serious crime and understands he is going to a penitentiary,” said Sorenson’s lawyer Stephen Bitzer.
“Ten years is a lengthy sentence for a first time offender. At age 71 it is, in a sense, potentially a life sentence.”
Knopp told reporters she lost about $130,000 investing in the companies run by Brost and Sorenson. She had mortgaged her home and now finds herself massively in debt and unable to travel to visit her children and grandchildren in Alaska.
“When I see them here today, it brings back the anger. I’m sad and depressed, I guess, but there has been some time that has passed for the anger to dissipate a bit,” she said.
“I definitely want them to see the maximum (sentence),” Knopp said. “They’ve destroyed a lot of people’s lives.”
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Bill Graveland, The Canadian Press