A Nanaimo man has been convicted of fraud in a Calgary court.
James (Jay) Farquharson Macleod was convicted of fraud in connection with incidents dating back to when he resided in High River, Alta. a decade ago.
According to court documents, the Crown claimed that more than $1 million was unrecovered, lost or stolen. Macleod was an independent contractor and licensed mortgage broker with The Mortgage Group, whose contractors were forbidden from handling mortgage money directly and running related side businesses, but Macleod incorporated a numbered company that would become New West Mortgage Placement Ltd. in June 2007 and Macleod Mortgages and Loans Inc. in September 2009.
Macleod’s private firm was said to produce returns in the neighbourhood of 14 and 16 per cent. People sought to invest with him and he received funds via cheque or bank draft.
“Evidence of the bank account of each of these companies … demonstrates that these accounts were both used at times to receive funds from the investors and to pay out amounts owing, and also money was transferred from one account to the other as needed,” said the ruling. There was also evidence that investor funds were “comingled with the funds earned from the Mr. Macleod’s operation of the TMG brokerage business,” and those funds were used for expenses for that business and for interest payments and principal re-payments.
Investors started seeing non-sufficient fund cheques from the numbered company, according to the ruling.
Macleod left High River and eventually was in Nanaimo.
One of the investors, Richard Cooper, “acted as an RCMP agent” and recorded conversations with Macleod in Nanaimo which were used as evidence.
“During the meeting … Mr. Macleod made statements that: had the business not failed when it did, it would have failed a year later and just been money out of another person’s pocket; he borrowed money from one person to pay another; he did not make any investments with the money provided to him by the investors; the investment money was only used to keep his mortgage business afloat (which in the context of the discussion meant TMG); and that he was just moving money around. These statements suggest Mr. Macleod had an incentive to mislead investors, to ensure cash flow for the TMG business,” the documents said.
Macleod contested that his conduct was dishonest and that he intended to commit fraud and said he suffered from drinking issues and dyslexia. He testified that he didn’t personally gain from investors’ money, rather it was used to pay off investor interest and principal from his private firm. He also said high return investments were difficult to find after the economic downturn in 2010, but he had high overhead and “interest obligations.”
In her ruling, Judge Corina Dario found beyond a reasonable doubt Macleod “deprived investors” and it exceeded $5,000 due to his “dishonest” actions.
“The deprivation resulted from the accused’s deceit and/or falsehood, or alternatively from other fraudulent means employed by the accused, meaning in a manner that was clearly dishonest applying an objective standard,” Dario ruled.
Macleod is set to be sentenced in Calgary on Oct. 30.
Alberta’s Crown counsel special prosecutor and Macleod’s legal representation did not return a request for comment.