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by Mike Caswell
The Alberta Securities Commission has found against a Calgary man and his assistant for an 11-year fraud that raised at least $137-million. The ASC says that the man solicited investors on the basis that they would be putting their money into instruments backed by real estate holdings in Alberta. Instead, their money went at least partly to U.S. oil and gas holdings associated with a now-defunct OTC Bulletin Board company, Powder River Petroleum International Inc.
The ASC released the findings on Tuesday, March 6, after an 11-day hearing. The respondents were Arnold Breitkreutz and Susan Elizabeth Way, as well as two corporate entities called Base Finance Ltd. and Base Mortgage & Investments Ltd. The operation was run from Calgary.
The scheme, as described by the ASC, centred around $137-million that Mr. Breitkreutz solicited from investors between 2004 and 2015. He told them that their money was secured by mortgages over real estate assets in Alberta. The problem, as described in the decision, is that the money was not invested in any real estate or even in Canada. When questioned by investigators, Mr. Breitkreutz told them that he had lent $122-million of the money to entities controlled by a man named Brian Fox. The money went to U.S. oil and gas projects, including those held by Powder River Petroleum.
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