A Calgary man who bilked his clients out of millions of dollars in a Ponzi scheme was sentenced Friday to 10 years in prison and ordered to pay $3.1 million in restitution for what the judge called a “deliberate and large-scale” fraud.
Arnold Breitkreutz, 74, was convicted in June of fraud over $5000 for what the Crown called a multimillion-dollar scheme in which investors believed they were putting money into safe first mortgages.
Court heard the money from his company, Base Financial, was instead loaned to an oil-and-gas promoter and used in a risky oil play in Texas that was secured against oil-and-gas leases and equipment.
The Crown recommended a sentence of between 10 and 12 years to send a message to others who might try a similar scheme.
Queen’s Bench Justice Colin Feasby said Breitkreutz’s actions warranted a significant sentence.
“His fraud was deliberate, large-scale and profoundly and adversely affected the lives of many victims,” said Feasby, noting the 29 victim impact statements the court received.
“These conditions were also provoked by the profound sense of betrayal experienced by many of the victims. Many of the victims had, over time, come to know and trust Mr. Breitkreutz, and some considered him to be a friend,” the judge said.
“The stark realization that he had defrauded them hit many of the victims hard.”
There were 107 victims between May 1, 2014, and Sept. 30, 2015, who provided Breitkreutz with more than $21.4 million.
Feasby said Base Financial had been operating since the 1980s and the scale of fraud could be much higher. He said the scheme was complicated enough to fool many individuals who were retirees and planning to enjoy their sunset years.
“One of the most insidious effects of Mr. Breitkreutz’s fraud on the victims was that it robbed them of their faith and trust in others,” said Feasby.
“The victims … blame themselves for being stupid, or foolish or greedy. They are none of these things.”
Feasby rejected an argument that the sentence should be more lenient because of Breitkreutz’s advanced age and the fact he lost his own money along with that of his clients when the Ponzi scheme collapsed.
“I accept that Mr. Breitkreutz did not enjoy the flamboyant lifestyle common to many fraudsters,” Feasby said.
“So far as the court can determine Mr. Breitkreutz lost the victim’s money finding providence in unauthorized investments and then playing a shell game for years and perhaps decades to try and avoid reckoning.”
Breitkreutz showed little emotion after the sentence. Earlier this week, he issued a brief apology to his victims.
“I can feel your loss and for that I’m unbelievably and indescribably sorry. It was not my intention when I accepted your money,” he said.
“I put your money in the same place that I put my own. Nonetheless, I feel for you deeply, as much as I can and I’m sorry.”