What's on The Zone @ 91-3 ::

Link

Login

Justin Hewitt ft. Nadine @ Darcys @ Darcy's Pub

Friends of Victoria TV ad rep lost thousands in Ponzi scam

Jan 11 2012

A sentencing hearing began Tuesday for a former advertising sales rep at CHEK TV who defrauded friends in the business community out of $235,000 to finance his gambling addiction.

Michael Muir pleaded guilty to five counts of fraud over $5,000 between June 2007 and January 2009.

Crown prosecutor Laura Ford told B.C. Supreme Court Justice Robert Johnston that the offences were a classic Ponzi scheme — a form of fraud in which belief in a nonexistent business venture is fostered by the payment of quick returns to the first investors from money invested by later investors. Ford asked Johnston to impose a prison sentence of two to two-and-a-half years.

Muir, a respected member of the media business community, persuaded friends he met in the business world to give him money, said Ford. Muir told his business friends that he was buying a large number of flatscreen TVs from a supplier and selling them to high-end hotels. He promised them a 20 per cent return on their money within a few months.

The frauds were sophisticated, with Muir creating false documents using letterhead for the flatscreen TV company, said Ford. Initially the "investors" saw a return on profit, although it was rolled over into the next purchase of TVs.

"Multiple fictitious deals were concocted by Mr. Muir. But all the money was spent on gambling and it all came crashing down in a cascade of lies and excuses in February 2009," she said.

Kevin Beggs, the manager of a local paint company, met Muir at a corporate golf tournament. He lost $30,000. John Holland, who was in the automotive business and had known Muir for about 10 years, lost $30,000 he needed for his retirement. James LeBlanc, who had known Muir since 1996 when he worked at a local radio station, lost $40,000. LeBlanc had put the money aside to finance his children's post-secondary education.

Michael Marchie, a sales manager for a car dealership, also lost $30,000. But his biggest regret, said Ford, is introducing his friend Cameron McFarlane to Muir. McFarlane lost $106,000 in the Ponzi scheme.

"These dealings were an abuse of trust because the relationships Mr. Muir carefully cultivated as a salesman for the TV station turned into friendships and those friendships motivated these men to trust the transactions were real," she said.

The house of cards began to fall on Feb. 11 when Marchie received a panicked call from McFarlane who told him a cheque for $74,000 had bounced. McFarlane phoned Muir, who told him the TV company had gone bankrupt. Muir was crying and threatening to kill himself, said Ford.

The three men met and McFarlane and Marchie tried to console Muir, urging him to look after his health. On Feb. 12, a suicidal Muir was admitted to hospital.

A few weeks later, Muir went to Marchie and confessed he had an addiction to gambling and there had never been any TV deals, said Ford. Muir told Marchie he had lied about everything.

Victim impact statements showed the men experienced shame and embarrassment. They have become far less trusting and have lost faith in their ability to judge character, said Ford.

A pre-sentence report indicates Muir offended because he is addicted to alcohol and gambling. His gambling addiction also cost his wife $100,000 in home equity when she took out a loan to pay off Muir's loans and credit card debt, although she thought it was money he owed his parents.

The hearing was adjourned until Friday.

ldickson@timescolonist.com

We thought you might also be interested in..