Fuchsia Dragon | [email protected]
New restrictions have been imposed on a woman who stole investors’ money for personal use.
Between April 1, 2006 and December 31, 2010, investors outlaid hundreds of thousands of dollars in deposits for a condominium project tied to a proposed luxury golf course just outside of Jasper National Park. Those condos were never built.
Marie Louise LaFramboise, 61, pleaded guilty to one count of fraud over $5,000 and was sentenced to four years imprisonment on January 7, 2019, and ordered to pay approximately $1.2 million in restitution.
And on January 30, 2020, Alberta Securities Commission said a panel had reviewed LaFramboise’s case and found that it was in the public interest to issue orders against her under the Securities Act (Alberta) to protect investors and the Alberta capital markets.
The panel noted the seriousness of fraud, and said “the scheme was multifaceted, continued for several years, affected at least 24 individuals, and [involved more than] $1 million, of which substantial amounts were misappropriated" for LaFramboise's personal use.
The panel ordered that LaFramboise:
- must permanently cease trading in securities or derivatives, and that all exemptions contained in Alberta securities laws do not apply to her;
- must resign all positions she holds as a director or officer of any issuer;
- is permanently prohibited from becoming or acting as a director or officer (or both) of any issuer or other person or company that is authorized to issue securities; and
- is permanently prohibited from engaging in investor relations activities, from advising in securities or derivatives, from becoming or acting as a registrant, investment fund manager or promoter, and from acting in a management or consultative capacity in connection with activities in the securities market.
The panel said it was “particularly disturbed” by one victim impact statement that related to LaFramboise knowingly defrauding a terminally ill man of savings which he intended to leave for his wife and three young children.
The panelists noted that the sentencing judge regarded LaFramboise's lack of a prior criminal record and her "good character" as essentially a neutral factor, in that she used those ordinarily creditable traits to beguile her victims.
The sentencing judge noted LaFramboise's guilty plea, her agreement to a restitution order, her age, and the support of her family as mitigating factors. The panel also took into account LaFramboise's expression of remorse in a brief statement she made at the sentencing hearing.
The history:
In 2003, a company by the name of Cougar Rock Holdings Ltd. (CRHL) entered into an agreement with the Government of Alberta to lease 1,200 acres of land (leased lands) in the Hinton-Jasper area, just outside of the Jasper park gates, with the objective of building a commercial recreational property that included condominiums and a golf course.
In 2006, LaFramboise entered into an agreement with WJ, the founder of CRHL, by which she could develop condominiums on a portion of the leased lands.
LaFramboise formed a company called Eagle Ridge Resort Group Inc. for this purpose and in 2009, WJ sold all of his shares in CRHL to the Eagle Ridge Resort Group.
Three groups of transactions that involved LaFramboise's companies were connected to the fraud conviction.
Those transactions are grouped under the headings: "The Condominium Fraud", "The Bond Fraud", and "The Folding Mountain Condo Fraud and the Share Fraud".
The Condominium Fraud
The Eagle Ridge Resort Group (ERRG) at LaFramboise's direction, sold rights to buy resort condominium units and accepted deposits totalling $872,009 from 22 of the 24 complainants.
LaFramboise's website falsely claimed that the resort offered fee simple ownership, and she misrepresented the progress of development to prospective purchasers.
She sold reservations for future phases of development at the resort and for golf memberships when almost no development had occurred.
LaFramboise contravened the Condominium Property Act (Alberta) by not placing the condominium deposits into a trust account.
Instead she deposited the funds in an ERRG bank account and used the funds for business and development expenses, for the purchase of the Folding Mountain Campground and for personal expenditures. Some of the purchasers received refunds for their deposits, but many did not.
The Bond Fraud
LaFramboise formed another company – ELFM Finance Corp. – through which she sold bonds to three of the complainants, two of whom were victims of the Condominium Fraud, for proceeds of $110,100.
The bonds were sold for the ostensible purpose of financing improvements to the aforementioned Folding Mountain property; however, LaFramboise kept the proceeds for herself.
The Folding Mountain Condo Fraud and the Share Fraud
LaFramboise accepted a $182,337.50 deposit from one of the complainants for a non-existent condominium development at the Folding Mountain property and used $59,460 of amounts owed to that complainant for a purported share subscription in CRHL.
LaFramboise falsely claimed that Cougar Rock Holdings owned the leases for the 1,200 acres when in fact the leases had been cancelled. Moreover, the Cougar Rock Holdings shares were never transferred to the purchaser.
