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Sentencing adjourned in fraud case after Nigerian scam claim

June 21, 2012

By Mike Youds
Daily News Staff Reporter

Sentencing was adjourned Thursday in the fraud case of Ed Chieduch so the judge could

consider a defence submission that the investment adviser was entangled in a Nigerian letter

scam.

Chieduch, 58, pleaded guilty in March to defrauding eight investors of $312,000 between 2005

and 2010.

He persuaded his clients, some of whom he knew well, to invest in a real estate investment

fund called Industrial Alliance Pacific (IAP). While the paperwork was completed, the funds

were never invested with IAP.

The clients complained to police in 2010 and Chieduch confessed to the scam when he was

confronted.

Before listing victim impacts during the sentencing hearing, Crown prosecutor Chris Balison

noted that Chieduch’s lawyer had recently submitted an affidavit claiming his client was

himself the victim of a financial scam at the time. Defence alleged that situation led

Chieduch to perpetrate the frauds in Kamloops.

“It seems farcical to suggest this is the reason for the fraud,” Balison told Judge Chris

Cleaveley. “He said he didn’t act out of malice or ill intent.”

Citing case law, the Crown is seeking a two-year sentence in a federal penitentiary to

achieve the sentencing principle of denunciation and general deterrence.

Defence lawyer Matt Ford is seeking a lesser penalty, either one year in provincial custody

or a two-year conditional sentence with three years’ probation. That way, Chieduch could pay

back at least some of the money he took. The man has lost his licence and would be unlikely

to re-offend, Ford said.

Crown argues that a conditional sentence is insufficient.

Chieduch has lived in Kamloops for more than 30 years and was first licensed to sell

insurance in 1992. His financial troubles began when he was persuaded by Bernice Gordon to

invest in a scheme in the Philippines. The group put up $50,000 with the promise of earning

$100,000, but there was no return.

Promised that he could earn the lost funds back through another scheme, he invested in the

Nigerian scam. At that point, he started to lie to his clients.

“He never benefited from any of this money,” Ford said. “He got himself in a huge mess and

to get out of it, he started to lie to his clients, hoping he could find the Holy Grail,

hope upon hope.”

Cleaveley questioned how a financial adviser once burned could be twice taken. The judge

asked for documents proving that funds had been sent to Nigeria. Ford later provided a

Western Union transfer for $356 from 2007 that was sent by another party, but the judge

wasn’t impressed.

Once Chieduch was under investigation by the B.C. Securities Commission, he was locked out

of his office, Ford said. He had a nervous breakdown, attempted suicide and then shredded

every document he had.

“He knew he was in over his head and really wanted to wash his hands of all that had

occurred.”

The case returns to court in July.

 

 

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June 27, 2012 - Posted by | Uncategorized

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