CALGARY — The Crown says two men on trial for what authorities have called the largest Ponzi scheme in Canadian history "misled" and "miseducated" thousands of investors and even their own sales people.
Prosecutor Iwona Kuklicz told a Calgary jury Thursday that both Gary Sorenson and Milowe Brost are guilty of an elaborate scheme where investors were brought in and promised unrealistic returns.
Sorenson, 71, and co-accused Brost, 61, have pleaded not guilty to two charges each of fraud and theft. Brost has also pleaded not guilty to an additional charge of money laundering. The two men were arrested in 2009.
Ponzi schemes involve taking funds from new investors and using them to pay old ones.
Police have said investors around the world lost between $100 million and $400 million in the alleged scheme. The Crown says many lost their life savings, retirement plans, even equity in their homes.
Several investors testified during the trial and were on hand in the courtroom Thursday.
"Not one of them ever said they believed their money was paying out earlier investments," Kuklicz noted for the jury in her closing argument. "It is the Crown's respectful submission that their money was never safe from the beginning.
"The collateral they were suggested was there was never in fact there because what their money was being used for was to pay out the earlier investors."
One set of alleged 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.
Another set of charges alleges wrongdoing took place between 2004 and 2005 with a company called Strategic Metals Corp. Brost's money-laundering charge is also connected to those alleged offences.
Kuklicz showed the jurors a PowerPoint presentation from Capital Alternatives, which she said was the marketing arm for Syndicated Gold Depository SA.
It promised a 34 per cent annual return on an investment of $99,000. Within eight years, the presentation said, the investor would receive $1,035,000 back.
Investors were told that the business involved selling gold for refining and that the deal was "low risk."
Kuklicz said it wasn't just investors who were taken in.
She said individuals who were given the titles of "structurists" and "strategists" were simply sales people made to believe that the investments were legitimate. They were even taken around a gold refining facility in Honduras where the entire process was explained to them.
"What it meant to them as the marketers of this SGD Investment, which Gary Sorenson and Milowe Brost were owners of, was that they had certain proof that this was a good thing to market to people," Kuklicz said.
"They thought it was legitimate."
Sorenson, who is defending himself, told the jury earlier this week that the Crown's case is full of reasonable doubt and the truth is he is not guilty of the charges.
Brost's lawyers attacked the credibility of Crown witnesses who were involved in the companies, saying they had everything to gain from lying.
The judge will deliver his charge to the jury on Tuesday.
