Rex v Del Bianco, 2023 ABKB 430

Court of King’s Bench of Alberta Citation: Rex v Del Bianco, 2023 ABKB 430 Date: 20230728 Docket: 180473647Q1 Registry: Calgary Between: His Majesty the King Crown - and - David Del Bianco Accused _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice N.E. Devlin _______________________________________________________ I. Overview [ 1 ] Between March 1 of 2010 and December 31 of 2014, a number of northern Albertans paid money to invest in a company run by the accused, operating under the name “Equal Rights”.

Each of these individuals was an unsophisticated investor. The company has never operated as they hoped and believed it would, if at all. None of the investors ever saw a penny of their money back. [ 2 ] David Del Bianco stands accused of one count of fraud over $5,000 pursuant to s 380(1) of the Criminal Code and one count of laundering the proceeds of crime pursuant to s 462.31(1)(

a) of the Criminal Code for his alleged role in these investments. The Crown alleges that the entirety of the ER scheme was a fraud from which he siphoned funds for his own use and living expenses. Mr. Del Bianco denies any wrongdoing and defended himself throughout this trial, which proceeded over the course of more than a year. [ 3 ] The following are my reasons for judgement in this matter. II. Facts [ 4 ] For several decades, Mr. Del Bianco ran and promoted an investment purporting to be a legal services insurance company. He did so mostly under the name Equal Rights, but other registered names also appear to have been used, such as Equal Rights Legal

Defence Alliance Inc., and Equal Rights Legal Defence Alliance USA. At times, Equal Rights Legal Defence Alliance Inc was described as Equal Rights Alliance Inc, which does not appear to be an actual corporate entity. Unless a distinction is warranted, I shall refer to the various Equal Rights entities as “Equal Rights” or “ER”.

Additional entities of note in this action include Affordable Legal Plan (Canada) Inc. (“Affordable Legal”) and Magnum Cavalier Developments Ltd. (“Magnum”) each of which were incorporated and controlled by the defendant. [ 5 ] Specifically, the corporate and banking records entered at trial demonstrate that Mr.

Del Bianco was the sole director of the Canadian corporate entities in issue and was the sole signing authority on the bank account of Equal Rights Legal Defence Alliance Inc at all relevant times. [ 6 ] Equal Rights was generally marketed as a “legal insurance plan” which witnesses said was described to them as a sort of “Blue Cross” or “AMA” for the payment of legal services/fees. The idea was that individuals or groups would be able to obtain legal insurance by signing up for a membership plan and paying monthly membership premiums. Informational pamphlets/brochures were produced by Mr.

Del Bianco explaining the nature of the fund and the membership plan. The promotional material indicated that once your registration as a member has been approved, a membership card would be mailed to you. The materials also provide a toll-free number for potential registrants. [ 7 ] It appears Mr. Del Bianco began promoting the opportunity to invest in Equal Rights in the late 1990’s to early 2000’s. The Court heard evidence from Mr.

Del Bianco that he had attracted the attention of securities regulators (namely the Alberta Securities Commission) who took certain enforcement actions he considered to be the beginning of an improperly motivated vendetta against him and the enterprise. This is relevant only in so far as Mr.

Del Bianco told the Court that he ceased promoting or selling securities in Alberta after some sort of agreement with the Courts in 2010, and relied repeatedly on this event as the line of demarcation defining the cessation of any conduct by him that would be covered by the indictment. [ 8 ] To this end, I note that the record contains copies of a number of share certificates issued by Equal Rights Legal Defence Alliance (USA) Inc., to a number of the investors who testified. While these share certificates all pre-date the Indictment period, they are relevant as Mr.

Del Bianco relied upon the issuance of share certificates as a part of his defence. [ 9 ] The investor-witnesses called by the Crown testified that they put money into what they thought was Equal Rights between 2010 and 2014, the time period covered by the Indictment (the “Relevant Period”). A number of these investors began making investments with Mr. Del Bianco in the 2000’s, sometimes after seeing presentations he had made about the company.

Others were new to the scheme and had been introduced to it through friends, family, or acquaintances who were also investors. [ 10 ] Many of these purchases were made through a man named Ted Wylie, who was the most ardent promoter of the scheme during the relevant period. He also appears to have been the largest financial loser in the scheme. [ 11 ] The investors had numerous things in common. They all lived and worked in northwestern Alberta, often in somewhat remote rural areas. They were all straightforward, hardworking, and trusting individuals. They were all financially unsophisticated.

None appeared to have levels of wealth that would justify or support speculative private-placement investments. Many of them had very little money at all. Several testified that they viewed this investment as something that might make them rich, despite the quantum of their individual investments being relatively modest. All of these factors made them ripe for financial misadventure. [ 12 ] Further similarities emerged. The complainants invested either directly through Mr. Del Bianco or, more commonly, through other investors who were also working as agents.

Many borrowed or sold assets in order to obtain funds to invest. Those investors who dealt directly with Mr. Del Bianco were often told that Equal Rights was just on the cusp of crystalizing into a profitable business venture, and that just a little more capital was needed. Investors who asked pointed questions of Mr. Del Bianco did not receive informative responses.

No return on investment, or any return of funds, has been realized by any of them. [ 13 ] Given that the Relevant Period covers only March 1, 2010, to December 31, 2014, this necessarily means that the entire story of those who invested in ER cannot be captured here. However, some of the history of the investors’ introduction to ER and to Mr. Del Bianco was led in evidence to conceptualize what occurred during the Relevant Period. In addition, Mr. Del Bianco relied upon certain historical happenings as a part of his defence. [ 14 ] An exhaustive forensic financial analysis was conducted on ER, Mr.

Del Bianco, and the related companies and accounts (the “Forensic Analysis”) by Ms. Nicole Chute, a forensic accountant. This formed a key part of the Crown case, as it traced all of the funds given by the investors, from their input to ultimate use. III. Position of the parties [ 15 ] The Crown argues that the Forensic Analysis, the financial documents tendered by the investor-witnesses, and the testimony of the investor-witnesses all establish that the money invested into ER was received by Mr. Del Bianco into accounts that he had solely controlled, and that Mr.

Del Bianco made personal use of this money. [ 16 ] The Crown alleges that the fraud existed not only with respect to Mr. Del Bianco’s use of the investment money, but also in relation to the ER business itself, in that nothing about the business was legitimate or in any way operated as represented. [ 17 ] The Crown also alleges that Mr. Del Bianco dealt with the money that he knowingly received as a result of his fraud, making him guilty of money laundering. [ 18 ] Mr. Del Bianco did not contest certain of the banking activities captured as a part of the Forensic Analysis.

Although he was inconsistent about the dates on which different accounts were operational, he acknowledged the movement of funds through the accounts identified. Rather, his defence is largely centred on his theory that while money may have moved though the accounts, he was not the

individual moving it. He claims that he never received this money, nor did it ever come to his benefit. As such, if a fraud wasperpetrated, it was not by him. He also maintained that ER was a real business, but that he did not conduct any of the allegedly fraudulentinvestment solicitations. IV. General principles governing a criminal trial [19] Mr. Del Bianco enters this trial presumed innocent and remains so unless the Crown proves his guilt on each element of theoffence beyond a reasonable doubt. This level of proof lies much closer to absolute certainty than to satisfaction on a balance ofprobabilities.

It is not sufficient that the Crown prove that the accused is likely guilty: R v Star, 2000 SCC 40 at paras 236 and 241-2.This very high level of proof applies to every element of the offence. [20] A reasonable doubt is a doubt based on reason and common sense which must be logically derived from the evidence or a lackof evidence.

A reasonable doubt must not be imaginary or frivolous, and cannot be based on sympathy or prejudice, nor do these formany part of the proof against an accused person: R v Lifchus, (SCC), [1997] 3 SCR 320 at para 31. [21] The onus of proving the accused’s guilt beyond a reasonable doubt lies with the Crown throughout the trial and never shifts.Mr. Del Bianco does not have to prove anything and, in particular, does not have to prove his innocence or explain the suspiciouscircumstances advanced by the Crown.

The presumption of innocence is displaced only when the evidence I do accept satisfies mebeyond a reasonable doubt of all the elements of the offence. Where I am left with a reasonable doubt, whatever its source, I must acquit. [22] Given where the onus lies, the accused does not have to testify. Nevertheless, Mr. Del Bianco elected to testify and providedevidence concerning his involvement in ER, certain other corporate entities, and with a number of investors. Again, some of his evidencewent beyond the Relevant Period but informed his defence.

The accused’s evidence conflicted with the Crown’s evidence on a numberof fundamental points, and I have assessed all of the evidence in accordance with the instruction provided in R v W(D), (SCC), [1991] 1 SCR 742, as further explained by our Court of Appeal in R v Ryon, 2019 ABCA 36 and in R v Achuil, 2019 ABCA 299. V.

The law of fraud [23] Fraud is defined in the Criminal Code as follows: 380(1) Fraud – Everyone who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning ofthis Act, defrauds the public or any person…of any property, money or valuable security… (

a) is guilty of an indictable offence… [24] McLachlin J summarized the elements of fraud in R v Zlatic, (SCC), [1993] 2 SCR 29, as follows at 43: [T]he actus reus of the offence of fraud will be established by proof of: 1. the prohibited act, be it

an act of deceit, a falsehood or some other fraudulent means; and 2. deprivation caused by the prohibited act, which may consist in actual loss or the placing of the victim's pecuniary interests at risk. Correspondingly, the mens rea of fraud is established by proof of: 1. subjective knowledge of the prohibited act; and 2. subjective knowledge that the prohibited act could have as a consequence the deprivation of another ... [25] The act of fraud therefore consists of both a means (using deceit, falsehood or other fraudulent means) and a consequence(defrauding any person of property).

The crime of fraud further requires that an accused intentionally carry out the acts or transactions inquestion, knowing these actions would create a risk of loss. [26] Fraud, in essence, is dishonest conduct resulting in a deprivation (or risk of deprivation) to the victim: R v Olan, (SCC), [1978] 2 SCR 1175 at 1182; R v Riesberry, 2015 SCC 65 at para 17.

A transaction is fraudulent if the accused knowingly putshis victims’ financial interests at risk through dishonesty, irrespective of whether fraud or deprivation was the purpose of their scheme: Rv Théroux, (SCC), [1993] 2 SCR 5 pp 18-19. [27] Therefore, to succeed on an allegation of fraud, the Crown must prove beyond a reasonable doubt the existence of: (i)dishonesty; (ii) deprivation; and (iii) knowledge of the dishonesty and its consequences. VI. Analysis (

i) The business of ER [28] As noted above, ER was promoted as an insurance scheme whereby members would pay monthly into a fund which wouldthen be used to provide legal representation for them if ever required. Mr. Del Bianco appears to have promoted the concept to (orotherwise communicated with) possible investors in person, at trade/investor shows, and over the telephone. He also used ‘agent’investors who believed in the concept to go out and promote it locally.

(ii) Review of the evidence [ 29 ] The Crown suggests two pathways to fraud in this case, the first being the misuse of the investment funds and the second being the actual operation of the business, namely that it was not legitimate and was not being operating as Mr. Del Bianco represented. [ 30 ] Given the nature of the proceeding, and Mr. Del Bianco’s positions regarding the evidence and witnesses, a detailed review of the evidence is appropriate in this case. [ 31 ] A series of Calgary Police and Alberta Security Commission (“ASC”) witnesses introduced and authenticated the vast amounts of documents tendered.

Outside of Ms. Nicole Chute, this group’s evidence largely speaks for itself and does not require any in- depth scrutiny. Beyond Mr. Del Bianco’s primary defence of essentially being sabotaged by outside forces, there were no issues concerning the validity of any of the production orders, nor of the authenticity of accounting information provided any of the banks involved (outside of Mr. Del Bianco’s assertions that copies, not being original documents, may somehow be less reliable). [ 32 ] At the time of his testimony, Cst.

Francois Courtemanche had been an RCMP officer for 17 years and was the officer in charge of the Sensitive and International Investigations Unit. In 2015, he was assigned to the ASC, to work with the Commission to establish the Joint Serious Offences Team or “JSOT”, which is a combined forces investigation unit between the ASC and the RCMP, tasked with looking into serious fraud within the Province of Alberta. At one point, Cst. Courtemanche was assigned as the primary investigator on the Mr. Del Bianco/ER file, which had come to JSOT as a referral from the regulatory side of the ASC. [ 33 ] Cst.

Courtemanche authored the ITO’s for two production orders on certain financials institutions used by Mr. Del Bianco/ER entities – namely the Canadian Western Bank (“CWB”) for the corporate account of Equal Rights Legal Defence Alliance Incorporated and the Toronto Dominion Canada Trust Bank (“TD”) for the personal accounts of Mr. Del Bianco and the corporate accounts of ER. The CWB account was closed and, as further discussed by Ms. Chute, this account was consolidated into the ER TD account. The documents produced pursuant to these orders were used as a part of the Forensic Analysis.

There were no signature cards or opening documents included in the production for the CWB account. Cst. Courtemanche indicated his belief that further banking information was produced by Bank of Montreal and Royal Bank in relation to the corporate ER accounts. Evidence as to these two accounts was provided by Nicole Spencer, an RCMP officer who was seconded to JSOT in 2016 as an investigator for Criminal Code investigations. [ 34 ] During cross-examination, Cst. Courtemanche confirmed that the matter was referred to him through two different channels. It was referred by Mr.

Gus Gallucci who worked on the regulatory side of the ASC, and also through the RCMP, following complaints to the Grande Prairie RCMP. Mr. Gallucci is an individual who figures prominently in the accused’s defence. Cst. Courtemanche indicated that the RCMP complaint was based on information provided by both the Wylies and the Renners, as described below. [ 35 ] Mr. Lionel Busch is a former Calgary police officer who now works for the ASC. He became involved in the JSOT investigation into Mr. Del Bianco and ER in 2016.

He was involved in interviewing witnesses, interviewing investors and seizing pertinent documents. He confirmed the receipt of a number of the original investor documents which were subsequently relied upon by the Crown in questioning the investor witnesses. [ 36 ] During cross-examination Mr. Busch agreed that the signature purporting to be Mr. Del Bianco’s appeared different on different documents, and was sometimes in a different colour of ink, although he provided a caveat that he was not qualified to opine on the authenticity of signatures in any way.

He agreed it was possible for a document to be forged. [ 37 ] A number of the exhibits related to individual investments were introduced through Sgt Michael Williamson of the Lethbridge Police Service. Sgt Williamson had spent a period of time with JSOT during which he conducted multiple interviews in relation of the investigation into ER. He received these documents during the course of his investigation. Sgt. Williamson explained his standard interview process used during the JSOT interviews. He denied influencing investors at any point during the interviews. Sgt.

Williamson explained that he is not a handwriting expert and was unable to advise as to whether Mr. Del Bianco’s signature on any of the Share Receipts was an original. Sgt. Williamson denied receiving any documentation, either from Mr. Dupuis or otherwise, that was not reflected in, or was different from, the documents entered into evidence. [ 38 ] The next group of witnesses comprised the “investor-witnesses”. [ 39 ] A number of investor witnesses provided critical evidence against Mr. Del Bianco. Given Mr.

Del Bianco’s position that much of this evidence cannot be trusted or relied upon, I critically examined their credibility. [ 40 ] As discussed below, I accept the evidence of the investor witnesses. While certain of the witnesses could not recall some specific details of financial transactions that occurred years prior, each of them presented as forthright and tried their best to assist the Court in understanding what took place. They were all honest people who did their best to assist the Court in telling a painful and embarrassing story about their lives. a. Ted Wylie [ 41 ] Mr.

Wylie is a pivotal figure in this case. He was a major investor in ER, as well as acting as an agent in soliciting for other investors. He was the direct contact for most of the investors who testified. He is the individual who explained the ER scheme and its need for funds, collected investor money, and provided receipts. He was thus the lynchpin of the fraud if there was one. [ 42 ] Mr. Wylie testified that he met Mr. Del Bianco in approximately 2004 and that their business relationship ended in 2014. He was introduced to Mr. Del Bianco through an individual named Rick Musich.

When they were first introduced, Mr. Wylie was working at World Financial Group selling insurance products. He is also a mason by trade and has his own company through which he performed masonry work, a trade to which he returned after the ER debacle. He lives in Alberta Beach, a village located northwest of Edmonton. [ 43 ] Wylie testified that he first invested in ER in 2004. His family bought shares as well. He had become interested in the idea of

legal insurance and received further promotional materials from Mr. Del Bianco explaining the concept. Mr. Wylie testified, and I accept, that all of the information he passed along to investors came by way of the brochures Mr. Del Bianco had provided him or from Mr. Del Bianco directly. [ 44 ] Mr. Wylie understood that, to access this insurance, one had to hold a membership in ER. He stated that ER was not yet at the point where it was selling memberships. Rather, individual investors were looking for shares in the company, not memberships.

They wanted to be able to receive profits in the form of dividends once people started buying memberships. Mr. Wylie believed that once ER was in a position to start selling memberships, the scheme would turn profitable. [ 45 ] At times, Mr. Wylie’s evidence appeared confused as to whether only members were able to access the legal insurance or if this benefit was extended to shareholders as well. I accept that the investors were told this was the case – namely that people were told that investing in ER brought the same benefits as buying the insurance – irrespective of the quantum of the investment. [ 46 ] Mr.

Wylie testified that, to his recollection, at some point prior to the Relevant Period, actual share certificates were being issued for investors. It became apparent during his cross examination that Mr. Del Bianco had been involved in certain hearings before the ASC and the courts which resulted in some form of order or agreement that ER not issue further share certificates.

As a result, over the Relevant Period, investors actually received either a “Receipt for Shares in Equal Rights Alliance Inc.” or a “Receipt for Unit/Shares in Equal Rights Legal Defence Alliance (USA) Inc.” (the “Share Receipts”) as opposed to an actual share certificate. The genesis and authenticity of these receipts forms a part of Mr. Del Bianco’s defence. [ 47 ] Mr. Wylie was involved in ER both as an investor and as an agent soliciting investments in 2004 and 2005. This appears to be when ER’s Stony Plain office was developed. He indicated that he was involved in this venture until 2008.

He then appears to have distanced himself from ER and concentrated more on his masonry work. Although it was unclear from the evidence, it appears that the period during which Mr. Wylie became less involved in promoting ER corresponded roughly with Mr. Del Bianco’s dealings with the ASC and the ensuing litigation. [ 48 ] In any event, Mr. Wylie testified that, in 2010, Mr. Del Bianco informed him that there was a possibility of licensing ER in the United States. Mr.

Wylie was unclear on exactly what this US licensing entailed, indicating that he “didn’t ask too many questions about it” and that it “wasn’t really in [his] league to know”. He believed that if ER was licensed and sold, the shareholders would see a handsome return. Mr. Wylie described his role as being an individual at the “front end” who could help bring “the money flow to Mr. Del Bianco”. [ 49 ] After discussing this licensing opportunity with Mr. Del Bianco, Mr. Wylie once again began to solicit investments in ER. He also resumed investing personally.

He stated that during this period he would meet up with Mr. Del Bianco approximately once or twice a month, during which time Mr. Del Bianco would sign the Share Receipts Mr. Wiley had prepared to give to individuals who had contributed money. [ 50 ] Mr. Wylie stated that Mr. Del Bianco had explained the share purchase structure to him. Basically, a client would be offered an initial investment opportunity at four shares to the dollar. This would then be increased to 6 to 1 and then 8 to 1 as the investor made subsequent purchases. Mr.

Wylie indicated that, when speaking to potential investors, he would explain the share structure as well as the concept of legal insurance. He would provide potential investors with brochures personally provided to him by Mr. Del Bianco. If investors had additional questions, he would seek answers from Mr. Del Bianco. Mr. Wylie confirmed that at no point did Mr. Del Bianco ever instruct him on how to make a sales pitch to potential investors. [ 51 ] Mr. Wylie indicated that he received a 15% commission on the share purchases he facilitated.

He agreed that he was paid cash for certain commissions or that he would receive additional shares in lieu of a cash payment. Mr. Wylie described himself as facilitating transactions through which other investors bought shares. It was unclear how Mr. Wylie drew the distinction between assisting people with buying shares versus selling them shares. [ 52 ] Mr. Wylie estimated that he personally invested over $100,000 in ER, and that he borrowed much of the money needed to do so. He imagined that, if things went well, he would make a few million dollars.

He indicated that he based his belief on information provided by Mr. Del Bianco around 2010, which projected future share value at $4-6 per share. Mr. Wylie said that he would share this possible projected return (should the licenses sell) with investors. [ 53 ] While both an investor and a promoter, Mr. Wylie professed to know surprisingly little about the financial position of ER. He was unable to give a fulsome response to questions concerning how shares were purchased and issued, nor to how the ratios were set.

He had no knowledge of ER’s corporate structure, other than that the share certificates appeared to be issued out of Delaware. He had no timeline information as to the potential licensing, nor as to how long it would take to see the shares selling at $4-$6. He did not know the value of the company. He never saw a business plan laying out any projections as to when ER would potentially start becoming profitable.

He did not appear to appreciate how the varying ratios or the number of shares issued would dilute a return on investment for existing investors. [ 54 ] He also appeared to be unclear as to nature and origin of the Share Receipts. At times he called them shares. He did not know the origin of the Share Receipts, although he believed that his wife may have made copies of some pre-existing version of a receipt. At times, Mr. Del Bianco’s signature is on the Share Receipts as a witness, at other times, Mr. Wylie’s signature is the only authorization. Mr. Wylie testified, and I accept, that at some point, Mr.

Del Bianco told him that he could sign the receipts himself. Mr. Wylie believed that by imparting sole signing power, Mr. Del Bianco was increasing his authority, although he was unclear as to why this change had been made. In referencing those Share Receipts on which Mr. Del Bianco’s signature is present, Mr. Wylie testified that these fully executed Share Receipts were “mostly” signed in front of him. [ 55 ] Despite this lack of knowledge about ER’s operations and corporate structure, Mr. Wylie testified that he believed that the ER concept and the investing scheme were sound.

He stated that he had been informed by Mr. Del Bianco that members of the RCMP as well as lawyers had invested.

[ 56 ] Essentially, Mr. Wylie placed blind and highly uniformed faith in Mr. Del Bianco and in the concept of ER. He believed that once the licensing was realized, he would be able to thank himself for taking this risk. He indicated that he had read some form of “investment rags to riches” book and wanted to do the same. His philosophy was that: You have to trust -- trust in what you’re doing and trust the people that you’re working with, and together, you start from zero and work your way up. And I wanted to be a part of that… [ 57 ] Mr. Wylie indicated that he put his trust in Mr. Del Bianco.

He did not question Mr. Del Bianco on where the funds were going or how they were being used. He did, however, indicate that in certain circumstances, funds would be raised for a specific purpose – such as when Mr. Del Bianco mentioned that he needed to travel. [ 58 ] He stated that his belief that ER was going to take off was based upon Mr. Del Bianco’s information that the company was going to be licensed and that – also based upon Mr. Del Bianco’s information – given the projected return on investment, he was going to get rich. [ 59 ] In relation to the actual mechanics of his role, Mr.

Wylie testified that he passed along all of the funds that he collected from investors to Mr. Del Bianco. It appeared that Mr. Wylie would transfer investment funds from his TD or CIBC account into Mr. Del Bianco’s TD/”Equal Rights” account, using bank account information provided to him by the accused. [ 60 ] Mr. Wylie testified, and I accept as a fact, that the funds he solicited or otherwise received from other investors were all transferred to Mr. Del Bianco using banking coordinates provided to him by Mr. Del Bianco. [ 61 ] A copy of one of the promotional brochures was put to Mr.

Wylie, which detailed various membership subscription options. Mr. Wylie admitted that he did sell a few actual subscriptions, because he believed that ER was in a position to do so. He indicated that his understanding of membership availability changed over time and that he was not “being smart” about selling the memberships. He stated that after being told to stop selling memberships, he did so. Mr. Wylie indicated that the phone numbers listed on the brochure were, to his knowledge, never active beyond a voice recording regarding membership wait times. [ 62 ] Mr.

Wylie confirmed that he never received a membership. He was never paid any dividends and never otherwise received a return on his investment. Simply put, he never got any of his money back. [ 63 ] Mr. Wylie stated that he never even attempted to cash his Share Receipts because he had ultimately been told by Mr. Del Bianco in 2014 that they were not “worth the paper they were written on”. Mr. Wylie testified that, after making this statement, Mr. Del Bianco nonetheless signed a final batch of Share Receipts. Mr. Wylie indicated that Mr.

Del Bianco made this statement “at the end” and that he did not press the accused further on this point. He testified that, notwithstanding this statement from the accused, he continued acting as agent for ER and continued taking money from investors. He indicated that he continued doing so because he was unsure whether Mr. Del Bianco’s statement was accurate, and he felt the best course was to “listen” and see if this was true. [ 64 ] Mr. Wylie testified that, a couple of months after Mr. Del Bianco had made this comment, he attended at a meeting with Mr.

Del Bianco and another individual named Francisco Schipperheijn. During that meeting, Mr. Schipperheijn told Mr. Del Bianco that he had “checked him out” and told Mr. Wylie that money that had been raised for ER was “used for something else besides what it was supposed to be”. Mr. Schipperheijn also indicated that he had seen Mr. Del Bianco in the Caribbean at the same point in time when funds had been raised to send Mr. Del Bianco to Europe. In addition, Mr. Wylie said that Mr. Schipperheijn informed him that the supposed ER computer hub did not exist. [ 65 ] Mr. Wylie testified that he believed Mr.

Schipperheijn to be a “straight shooter” and that there were “things that kind of added up in my brain, anyway, that something wasn't right”. Mr. Wylie cut off all contact with Mr. Del Bianco after that point. [ 66 ] During cross-examination, it was suggested to Mr. Wylie that he had never forwarded any of the funds raised by investors on to Mr. Del Bianco. Indeed, it was suggested that Mr. Wylie could not have done so as the account in question had been closed. Mr. Wylie disagreed with these assertions. Mr. Wylie denied either forging Mr. Del Bianco’s signature on the Share Receipts or otherwise copying Mr.

Del Bianco’s signature. He further denied Mr. Del Bianco’s many assertions that the paperwork was “bogus” or “tainted”. [ 67 ] When questioned as to how he could transfer funds to a closed account, Mr. Wylie indicated that the information about the account being shut down “... blows me away because where did the money go when I transferred it?” No evidence was led during cross- examination that the crucial banking paperwork had been forged. Mr. Wylie further denied any knowledge of a PayPal account being hacked. [ 68 ] During cross-examination it was put to Mr.

Wylie that the unprofessional nature of the paperwork and the Share Receipts suggested that Mr. Del Bianco could not have been the individual behind any investor solicitation – and that someone – either Mr. Wylie or an unknown party – was running a scheme. When asked for a response to the suggestion that this “chicken coop” paperwork could not have emanated from Mr. Del Bianco, Mr. Wylie responded “well I guess I live in a chicken coop, but the rooster is telling me what to do.” [ 69 ] It was further suggested to Mr. Wylie that he had been instructed by Mr. Del Bianco to stop selling any US stock in May of 2010.

Mr. Wylie did not recall receiving these instructions. He also denied asking that his commission be paid-out off the top of funds he was receiving from investors. Mr. Wylie indicated that, at some point, he was told there would not be any further share certificates and that this is why the “Share Receipts” were put together, so that investors would have a document attesting to the shares owed to them. [ 70 ] In general, Mr.

Wylie resisted the numerous attempts made during cross-examination to suggest that he was somehow involved in forging any aspect of the Share Receipts or in somehow obtaining or providing shares absent a required subscription form. He was not presented with any evidence to the contrary, despite Mr. Del Bianco being repeatedly invited to do so. [ 71 ] I have given close consideration to whether Mr. Wylie’s evidence can be relied upon. As stated above, Mr. Wylie played a

key role in soliciting funds from investors. There is no question that he personally received investment money. In addition, he was motivated by the opportunity to earn a commission on sales. Mr. Wylie also claims to have an almost astonishingly non-existent lack of information about the corporate workings of ER, how share valuation and offerings work, and how valuation and returns on investment are determined; this all coming from a witness who had been licenced to sell insurance products though brokerages for a number of different companies, including banks. [ 72 ] For all these reasons, I have approached Mr.

Wylie’s evidence essentially as one would approach the evidence of a Vetrovec witness. Given his involvement in the scheme, and the allegations made against him during cross-examination, I treat the evidence of Mr. Wylie with great caution. Therefore, it is necessary to consider whether Mr. Wylie’s evidence is supported or corroborated by other reliable evidence. [ 73 ] Certain portions of Mr. Wylie’s evidence were, at times, inconsistent or confusing. For example, Mr. Wylie’s distinction between selling versus facilitating the sale of shares is unclear.

He also provided inconsistent testimony about whether he was selling memberships in the ER plan, and therefore whether he understood the company to be in a position to do so. His evidence as to whether shareholders were also members by virtue of their shareholder status was also inconsistent. More importantly, his evidence that he sometimes received his commission by way of additional shares versus cash is at odds with Ms. Chute’s analysis which shows he did receive a commission payment commensurate to 15 percent of the amount he invested. To the extent that Mr. Wylie’s evidence conflicts with that of Ms.

Chute, I prefer that of Ms. Chute. [ 74 ] Furthermore, his evidence was that even after being told that the shares were worthless by Mr. Del Bianco, he took no action, asked no questions, and continued taking investor money. [ 75 ] With the above in mind, I nonetheless conclude that I believe Mr. Wiley for a number of reasons. First and foremost, the banking records and Forensic Analysis entirely confirm his evidence. These objective, contemporaneous, third-party business records show that he transferred the investors’ money directly to Mr. Del Bianco, exactly as he said he did. Ms.

Chute’s analysis provided equally compelling, objective evidence corroborating Mr. Wylie’s version of what happened to the money. [ 76 ] Mr. Wylie’s evidence is also supported by Mr. Dupuis’ evidence that, if he was told something by Mr. Wylie, he would confirm it with Mr. Del Bianco, and vice versa. Mr. Dupuis also testified that he personally witnessed both Mr. Wylie and Mr. Del Bianco witnessing the Share Receipts on occasion. [ 77 ] Furthermore, Mr. Wylie’s evidence that Mr.

Del Bianco would often contact him for funds needed for a specific purpose – such as travel – is also supported by evidence of various other investor-witnesses who described similar requests made directly by Mr. Del Bianco. [ 78 ] In addition, I am satisfied that Mr. Wylie displayed candour while testifying. While the above inconsistencies gave me pause, I find that Mr. Wylie’s evidence on the whole revealed a naive and overly trusting individual as opposed to a dishonest or manipulative one. Put simply, I believe him. As such, notwithstanding the issues I have identified, I accept Mr.

Wylie’s evidence on certain key points, namely that he got his information concerning ER directly from Mr. Del Bianco and that he funnelled all of the funds he collected to Mr. Del Bianco. [ 79 ] Mr. Wylie was very clear that he simply told potential investors what Mr. Del Bianco told him. I accept that evidence. Mr. Wylie presented as the opposite of the accused in many ways. He was straightforward, plain spoken, and unsophisticated.

He was also trusting and obedient. [ 80 ] Having seen and heard his evidence, and carefully analyzed it against the objective documentary record and the evidence of other believable witnesses, I have no doubt that Mr. Wylie was an honest dupe. He believed in the Equal Rights scheme and dreamed of getting rich through it. He put his own money where his mouth was, to the extent of over $100,000, much of this acquired through high- interest loans. The shame and guilt he manifested in his evidence for having gotten the investors into the scheme on the strength of his own word spoke volumes. [ 81 ] Mr.

Wylie invested absent even the most basic knowledge of how ER was structured, what it was worth, or how value was potentially going to be realized. He did so because he wanted to see the scheme work and was under the impression that he could make millions and “be a hero”. I find that this was a classic case of greed, hope, rose coloured glasses, and a lack of financial literacy rendering an unsophisticated individual very vulnerable. What happened in this case epitomizes why we have protective securities regulations. [ 82 ] In sum, I accept Mr.

Wylie’s evidence on the following crucial points, much of which was corroborated by the hard evidence in the form of the banking records. Specifically, I find as a fact that Mr. Wylie (

i) believed in the business; (ii) invested heavily; (iii) solicited others to invest with Mr. Del Bianco’s knowledge and consent and based upon information provided by Mr. Del Bianco; (iv) passed on all the money he collected; and (

v) gave the Share Receipts to Mr. Del Bianco and watched him sign them. b. Doris Wylie [ 83 ] Ted Wylie’s wife Doris Wylie was called by the Court. She stated that she helped her husband with administrative duties, but that she was not involved in promoting ER. Ms. Wylie indicated that she was involved in setting up the Share Receipts template and that she also assisted in setting up spreadsheets: one for Mr. Del Bianco, a family investment spreadsheet, and ultimately another for the ASC. [ 84 ] Ms. Wylie said that she and her husband invested approximately $180,000 in ER.

Her two adult children also put money in. She stated that they used lines of credit, credit cards and their existing home equity to obtain the investment funds and that Mr. Del Bianco indicated to them that they were going to be “rich”. [ 85 ] In specific relation to the Share Receipts, Ms. Wylie said that she would create blank Share Receipts on the computer for her

husband to use. She testified that she never saw any pre-signed Share Receipts. According to Ms. Wylie, Mr. Del Bianco stated that issuing share certificates was too expensive and indicated that on a go-forward basis, investor funds should be accounted for by using the Share Receipts instead. [ 86 ] During cross-examination, Ms. Wylie denied concocting her story, designing inaccurate spreadsheets, or otherwise taking steps against Mr. Del Bianco and ER due to any marital issues, problems present in her personal life, or a personal vendetta against Mr. Del Bianco. Ms.

Wylie agreed that she was frustrated that her husband continued to invest with Mr. Del Bianco despite the fact that there were no financial statements indicating how ER was performing, no financial statements showing what Mr. Wylie was purportedly earning in commissions, no shareholder updates, and no share certificates. She further rejected any suggestion that she and her husband solicited funds and then kept them rather than turning them over to Mr. Del Bianco. [ 87 ] No evidence to the contrary was put to Ms. Wylie. She was a clear, objective, straightforward witness. I accept her evidence. c.

Thomas Renner [ 88 ] The other investor/agent who gave evidence was Mr. Thomas Renner. He first invested in ER in 2007, with his initial investment facilitated by Mr. Wylie. In 2009, he required the services of a lawyer and called Mr. Del Bianco, who procured a lawyer for him. [ 89 ] The lawyer, a Mr. J. Ter Hart, appeared at a preliminary inquiry for Mr. Renner, following which he asked Mr. Renner for payment of his fees. Mr. Renner testified that he informed Mr. Ter Hart that he was a member of ER and that Mr. Del Bianco was meant to cover the fee. Mr. Ter Hart indicated that he would speak to Mr.

Del Bianco concerning the fee. That was the last Mr. Renner heard from his counsel. [ 90 ] Mr. Renner stated that after this experience he “believed 100% in the product”. He invested more money personally and he also assisted others in investing. [ 91 ] I accept Mr. Renner’s evidence that he was not paid a commission, but rather was told by Mr. Del Bianco that once the memberships “got going” the investors would become “very wealthy”. Mr.

Renner indicated that he was informed that investors would be paid monthly or quarterly, based on membership rates and earnings, according to how many shares they had. [ 92 ] Mr. Renner stated that, over the years, he would try and assist Mr. Del Bianco where needed. For example, if Mr. Del Bianco needed a new laptop, needed to travel to England to promote ER, or had filing charges, Mr. Renner would forward him money. Mr. Renner stated that, while he did not keep fulsome receipts, the receipts that he did have totaled approximately $20,000.

He believed that he was going to receive shares in return for these “one-off” types of payment. He never did receive any Share Receipts for these payments, but rather said that Mr. Del Bianco told him he was keeping track of these payments and that he would be “taken care of”. Mr. Renner indicated that, for these types of expenses, he would transfer money into the ER bank account through his TD account. Mr. Renner told the Court that Mr. Del Bianco never said that he had not received the funds requested. [ 93 ] Mr.

Renner explained that, when he was assisting with sales, he would have investors meet him at the TD bank and he would deposit the money into a bank account using coordinates provided by Mr. Del Bianco. Mr. Renner would then take a photocopy of the deposit slip and would provide the investor with a Share Receipt generated by Mr. Del Bianco. Mr. Renner testified that he assisted in making these deposits in 2010 and 2011. [ 94 ] Mr. Renner also said that Mr. Del Bianco told him that he was a member of ER and that all investors were members.

He stated that he was told that “membership fees”, which were otherwise payable, were waived for investors. He was not aware of any members who were not also investors because ER “hadn’t gone anywhere”. [ 95 ] Mr. Renner indicated that his new wife told him that Mr. Del Bianco was a “thief” and that at some point in 2012 or 2013 he recorded a telephone conversation he had with Mr. Del Bianco. This recording was entered into evidence. Its genesis lay in Mr. Renner being sued by an individual who had invested in ER through him. During the recorded telephone conversation, Mr.

Del Bianco says that he will take care of the lawsuit. Mr. Renner responded that, because all of the money from this investor had been sent to ER, Mr. Del Bianco should be paying for the lawsuit. Mr. Del Bianco did not disagree with this assertion during the call. [ 96 ] While there is some uncertainty as to when this telephone call took place, a number of comments made by Mr. Del Bianco therein are noteworthy. First, he states that his “intention is to activate”. He then indicates that he is “going to sell” once he gets “across the pond” and that the company is “at the precipice”. These things, said in Mr.

Del Bianco’s own voice, corroborate that that the representations made to solicit money from the investors were made at his instigation and behest. This is so even if the recording was made made outside of the Relevant Period. That said, I am entirely satisfied that Mr. Del Bianco made these types of representations during the Relevant Period. [ 97 ] Mr. Renner recalled his last investment have been made in the summer of 2012. He stated that he stopped promoting the concept at this time as he began having doubts about seeing any return on investment.

Specifically, he began to have doubts as to whether ER was going anywhere. He stated that he could see that “nothing was being done” and indicated that, every time he spoke to Mr. Del Bianco, the accused requested money to cover a new expense. Mr. Renner eventually concluded that ER was not “on the up and up”. [ 98 ] On cross-examination, Mr. Renner denied that he was fabricating stories about providing any funding for “one-off” expenses. Mr. Renner also denied that the accused offered him stock to compensate for the lawsuit expenses. He further denied receiving any commission from Mr. Del Bianco or ER.

He was not shaken in cross-examination and not shown a single document that contradicted his evidence. I accept his evidence, making allowance for some frailty on precise dates. d. Shelia Renner

[ 99 ] Mr. Renner’s wife also gave evidence. She stated that she never invested in ER, nor did she personally meet with Mr. Del Bianco. Rather, she heard of Mr. Del Bianco and the investment opportunities through her husband. At some point in time, Mr. Del Bianco asked Ms. Renner to arrange a London mailing address for him which she refused to do. Ms. Renner indicated that she never trusted Mr. Del Bianco. She repeatedly tried to get her husband to get something in writing concerning the business dealings they had, but that this never materialized. [ 100 ] Ms.

Renner indicated that she listened-in during the recorded telephone call between Mr. Del Bianco and her husband. She stated that she had likely listened in to over 100 telephone conversations between her husband and Mr. Del Bianco over the years. She described Mr. Del Bianco as discussing ridiculous schemes and making excuses for why people were not getting their money. She stated that Mr. Del Bianco’s descriptions of “activating”, and his discussion of various plans and ideas, were tangential and confusing. She likened Mr.

Del Bianco’s conversational style when asked pointed questions about ER to “verbal diarrhea”. [ 101 ] Ms. Renner stated that, in general, Mr. Del Bianco would present ER as being near to fruition and always requiring just a little bit more money to get there. She stated that if her husband had potential investors who wanted to examine the accounts, Mr. Del Bianco would decline the investment opportunity. Ms. Renner estimated that her husband had provided Mr. Del Bianco with between $20,000 - $25,000. She indicted that her husband gave Mr. Del Bianco with another $500 in 2013 and that she became upset. [ 102 ] Ms.

Renner testified that, in February of 2015, she spoke with Mr. Del Bianco over the phone and that Mr. Del Bianco threatened her during this conversation. Specifically, after Ms. Renner told Mr. Del Bianco to stop lying, Mr. Del Bianco told her to “shut her fucking mouth”, indicating that had Italian connections and would “get the Mafia on her” and that she did not want to be “found dead” and that “people die over things like this”. [ 103 ] Mr. Renner confirmed during cross-examination that he heard this conversation, and that Mr. Del Bianco was “screaming and threatening” during the conversation.

While this alleged phone call took place outside of the Relevant Period, Mr. Del Bianco raised this issue during his cross-examination of Ms. Renner, with his theory seeming to be that she was fabricating this call and that this fabrication was further evidence of her ongoing personal animus toward him. [ 104 ] During cross-examination, Ms. Renner denied that she was fabricating the threatening telephone conversation. I believe her. Not that Mr. Del Bianco was planning to or could carry out the threat, but I find as a fact that he made it.

This is relevant only in so far as being questioned about the bona fides of a business should, if the business is legitimate, attract a fulsome provision of information to assuage the concerns being expressed, not death threats against the person questioning the scheme. [ 105 ] The evidence of the conversation between Mr. Del Bianco and Ms. Renner was consistent with a pattern evident in the trial in which Mr. Del Bianco would flatter those witnesses whose evidence was not particularly harmful, and savagely attack those who were critical of him. Mr.

Del Bianco also repeatedly demeaned the evidence of female witnesses that he did not favour by calling them “girls” and his behaviour in this regard was reprimanded by the Court. This does not provide evidence of Mr. Del Bianco’s guilt, but rather manifested behaviour consistent with what Ms. Renner described in the death-threat phone call. e. Randy Dupuis [ 106 ] Mr. Dupuis was an investor/promoter in ER. He testified that he was looking to invest some funds and was introduced to Mr. Wylie through a mutual friend, given Mr. Wylie’s involvement in World Financial Group. Mr. Dupuis met Mr.

Del Bianco at a meeting for potential investors in Peace River. He recalled that Mr. Del Bianco personally pitched the ER concept to him during this meeting. [ 107 ] Mr. Dupuis invested money into ER between 2004 and 2014. He believed that he was buying shares in ER and that as a shareholder he was also a member. When asked who provided him with the information that led to his decision to invest, Mr. Dupuis indicated that it would have come from both Mr. Wylie and Mr. Del Bianco. [ 108 ] Mr. Dupuis invested heavily in ER. He stated that Mr.

Del Bianco provided various projections concerning possible share return value, ranging from $3 per share to $6.50 per share if subscriptions in England took off. Mr. Dupuis indicated that he was not bothered by any incremental share dilution because he believed that there were a fixed number of shares. He did not recall how he arrived at that conclusion, but said that he predominantly spoke to Mr. Del Bianco, and that about 90% of these conversations happened over the phone. He further testified that he would confirm things that Mr. Wylie told him concerning ER directly with Mr.

Del Bianco, and vice versa. [ 109 ] Dr. Dupuis indicated that, early on, he received share certificates for his investments, but that these eventually stopped coming and instead he began receiving Share Recipes. He described receiving materials in brochure form directly from Mr. Del Bianco. He stated that he handed out additional brochures to friends in order to encourage them to invest, and that a number of his friends did in fact invest. [ 110 ] Similar to other investor witnesses, Mr. Dupuis testified that Mr.

Del Bianco would say that ER was getting close, that they were in the final push, and that he just needed funding for a couple of more strategic items to be put in place, following which Mr. Dupuis would transfer further cash. He stated that, when he responded to these requests for immediate funding, he would call Mr. Del Bianco on the phone and confirm receipt of the funds. [ 111 ] Again, similar to other investor witnesses, Mr. Dupuis described being told that there would be a form of credit card that he would need to set up and that his return-on-investment income would be paid into this account.

He did not set up that card, as by that point he had become suspicious. The letter containing instructions for the credit card was addressed to a residence in London, England. Mr. Dupuis confirmed that he has never lived in the UK. [ 112 ] Mr. Dupuis testified that he was physically present when both Mr. Wylie and Mr. Del Bianco signed them a number of the Share Receipts he received. [ 113 ] Mr. Dupuis testified that his trust in Mr. Del Bianco ended with a telephone call with him in 2014. He learned that certain funds

he believed were going to flow through Mr. Del Bianco to another individual for a separate investment opportunity had not been received by that individual. Mr. Dupuis indicated that following this discovery he attempted to “prod” Mr. Del Bianco for further information but, when this was not forthcoming, realized that he had “been had” and ceased contact with Mr. Del Bianco. Mr. Dupuis indicated that over the entire course he invested over $100,000 in ER and lost it all. [ 114 ] During cross-examination, Mr.

Dupuis agreed that he was well-informed concerning the ER concept and what the service was going to offer prior to deciding to invest. He resisted various suggestions put to him during cross examination that certain of the Share Receipts were “bogus”/fraudulent or that they had in fact been drafted by Mr. Dupuis himself. Rather, Mr. Dupuis maintained that the documents in issue had been received directly from Mr. Del Bianco, and to the extent certain documents referenced entities other than ER, these were corporate entities owed by Mr. Del Bianco. Mr.

Dupuis also contested assertions made during cross-examination that he was not financially in a position to invest at the level he had testified to. [ 115 ] Mr. Dupuis was subject to the same aggressive cross-examination style as was seen with Ms. Renner and Ms. Wylie. Despite this, Mr. Dupuis’ evidence remained consistent. When he could not recall something, he admitted this freely and he was up-front about the source of some of the funds he had used in his earlier investments. I accept his evidence. f. Tracie Craig [ 116 ] Ms. Tracie Craig testified that she met Mr.

Wylie after her husband Shawn attended an ER information meeting in Peace River at some point in approximately 2007. Both she and her husband invested in ER. While Ms. Craig did not ever personally meet with Mr. Del Bianco, she testified that she spoke with him over the phone on a handful of occasions. She believed that while she did not have a membership, as an investor, she would still have access to a lawyer under the ER program. She stated that, over the years, she and her husband invested between $35,000 - $40,000. She believed that both Mr. Wylie and Mr.

Del Bianco informed her that she would be seeing quarterly payments, and that the return would be very profitable. [ 117 ] Ms. Craig testified that, during telephone conversations, Mr. Del Bianco would assure her how well everything was going. He told her that the RCMP unions wanted to invest, as did various unions in the United Kingdom. He would consistently stress that the company was just about to take off and then would ask for additional investment funding to take the final steps (such as travel) to secure the concept.

He would also pressure her to invest any additional funds before the opportunity to do so no longer existed. [ 118 ] At some point Ms. Craig was told that she would receive credits on a pre-paid credit card as a form of dividend payment, but this never took place. [ 119 ] Ms. Craig was under the impression, based on information received from either Mr. Wylie or Mr. Del Bianco, that with increased investment she would receive a more favourable share ratio. She testified that she never received any return on investment or any dividend payment. [ 120 ] Ms.

Craig testified that she and her husband made a series of investments during a period predating the Relevant Period. They received share certificates for certain of these early investments. Following a fairly lengthy break, they were contacted again by Mr. Wylie in 2014, who informed them that things were looking good and were about to get finalized. Based upon this information, they sold livestock and farming equipment and began investing again. Based upon Exhibit 8, it appears that the Craigs invested more than $31,000 in 2014. [ 121 ] Ms.

Craig had a number of bank receipts evidencing debits from her bank account and eventual transfers into a “Equal Rights” account. Ms. Craig indicated that she spoke with Mr. Del Bianco over the telephone inquiring as to why no share certificates had been issued for their 2014 investments and was assured that they were coming. She stated Mr. Del Bianco never suggested that he had not received the funds the Craigs had sent and were inquiring about. [ 122 ] Ms.

Craig indicated that, with no dividends or returns on investments forthcoming, she and her husband eventually resigned themselves to the fact that “it was a scam”. She indicated that, the last time she spoke to Mr. Del Bianco, he had phoned her to invest in a “gold pyramid scheme”. At this point, she decided to cut all ties with Mr. Del Bianco. She was a credible witness and I accept her evidence. g. Carol Fielding [ 123 ] Ms. Carol May Fielding is 85 years old. She met Mr. Wylie through his brother Brian Wylie in 2007. She indicated that she only met Mr.

Wylie four or five times and that she has never met nor spoken to Mr. Del Bianco. Ms. Fielding indicated that she would have been told about ER initially through Brian, and that she would have then met Mr. Wylie personally at his home for a more fulsome explanation. She stated that while at his home, she was shown a big brochure and decided to invest. She invested through e-transfers made to Ted and, initially she received share certificates in return as security. She made a number of investments in 2007 and did not invest again until 2014.

She recalled that, in 2014, one of the Wylie brothers may have contacted her and told her it was a good idea to start investing again, although she was unclear on this point. [ 124 ] Similar to the other investor witnesses, Ms. Fielding received a credit card that she believed she could receive payouts on. She also believed that she received Share Receipts in the mail. Ms. Fielding had some issues with recollecting details but, in general, was an impressive witness who stated that she believed that ER was a sound investment and that she understood that Mr. Del Bianco was the person in charge of the company.

I accept her evidence. h. Sebastien and Jean Fortin [ 125 ] Mr. Sebastien Fortin testified that he first learned about ER from Mr. Wylie in 2008 while he was attending high school in

northern Alberta. Mr. Fortin’s brother had invested at that time and Mr. Fortin invested in 2014. He believed that he was receiving shares on a 6 to 1 ratio. He explained that Mr. Wylie represented that Mr. Fortin’s rate of return would be double. When shown a January 27, 2014, Share Receipt, Mr. Fortin could not recall whether the signature blocks had already been executed when he received it. [ 126 ] On cross-examination Mr. Fortin indicated that Mr. Wylie informed him that proper share certificates would be sent in the mail. He thought he recalled receiving a certificate but could not locate it.

I accept his evidence but find that he was mistaken about receiving a certificate. [ 127 ] Sebastien Fortin’s mother, Jeannette also testified. Ms. Fortin indicated that she learned about the ER opportunity from Mr. Wylie, who had come to her house, and by attending a public information meeting at which both Mr. Wylie and Mr. Del Bianco were present. Ms. Fortin purchased shares in 2008 through Mr. Wylie. She stated that, following this initial purchase, Mr. Del Bianco phoned her on one further occasion to encourage her further invest, but that she declined.

It was unclear from her evidence when this occurred. [ 128 ] I accept both of the Fortins’ evidence, though it touches only lightly on the Relevant Period. i. Katharina and David Martens [ 129 ] Ms. Katharina Martens and her husband Mr. David Martens both testified. Both are residents of Fort Vermillion, a settlement approximately 7 hours north of Edmonton, and both put money into ER. They were unsophisticated investors and had never been involved in a share purchase before. They had little knowledge of what ER was or what it was meant to provide. They invested through Mr. Wylie, although Mr. Martens spoke to Mr.

Del Bianco on the phone a couple of times. During cross-examination, it was suggested to Mr. Martens that he only ever spoke to Mr. Wylie on the phone. Mr. Martens disagreed, indicating that the accused had called him and that he recognized the accused’s voice. [ 130 ] Mr. Martens testified that, the last time he spoke on the phone to Mr. Del Bianco, the accused had requested further funds into something called “Sysco” and that around this time Mr. Wylie told him that he was looking into something and that they should not invest any more. [ 131 ] Troublingly, Mr.

Martens said that their family “went without” personally, in order to be able to invest. While both Mr. and Ms. Martens referred to the accused by the wrong name (Dave Del Blanco, or something similar), owing perhaps to English not being their primary language, I am satisfied that they were talking about the accused. [ 132 ] Ms. Martens testified that they invested in 2006, 2013 and 2014, and that Mr. Wylie would provide signed receipts indicating that the funds had gone through. Ms. Martens indicated that she did not understand what a share ratio meant or how it was determined. Mr.

Martens did not know what a prospectus was. Ms. Martens indicated that Mr. Wylie had advised the couple that the investment would be short-term, and that the more they paid in, the more they would get out. Mr. Martens indicated that he was informed by Mr. Wylie that their investment would double or triple. [ 133 ] Similar to other investors, the Martens received a credit card which was going to be used to receive divided payments. Ms. Martens stated that Mr. Wylie informed them about the card, but that they never activated it because they were never told that it was operational.

During cross-examination, it was suggested that the card was a membership card as opposed to any banking card. Mr. Martens denied ever having received a card of any type. Rather, he stated that a photo of the card had arrived, but no physical card had been delivered. [ 134 ] The Martens’ invested approximately $39,000 in ER during Relevant Period. They went to the police after Mr. Wylie expressed his concerns to them at some point in 2014. At one point, Mr. Martens indicated that Mr. Del Bianco’s signature was already on the Share Receipts at the time he saw Mr. Wylie add his signature for the cash Mr.

Martens provided. However, during his cross- examination, Mr. Martens indicated that Mr. Wylie took the Share Receipts with him to be executed and then returned them after Mr. Del Bianco had signed them. [ 135 ] Somewhat ironically, while cross-examining Ms. Martens the accused put to her the following: People up north are very trustful. If you say something to them, they believe what you say. [ 136 ] Ms. Martens agreed with this statement. She also agreed that she could not recall whether any signatures were already present on the Share Receipts at the time she would provide cash to Mr. Wylie.

She further agreed that she never personally witnessed Mr. Del Bianco sign anything. [ 137 ] During cross-examination it was suggested that the Martens provided the funds to Mr. Wylie, but that it was never transferred forward. Ms. Martens agreed that they did provide all of the cash to Mr. Wylie but stated that he always assured them that it was then invested and provided them with Share Receipts. While the Martens appeared to favour cash, there was also evidence of a wire transfer to ER with a Victoria, BC address.

I accept the Martens’ evidence. [ 138 ] A number of “non-investor witnesses” also testified for the Crown. These individuals each had dealings with Mr. Del Bianco/ER. Like the investor-witnesses, I find that this group of witnesses also presented as credible and believable. They answered questions to the best of their recollection, though Mr. Wilson was visibly reluctant to say anything bad about Mr. Del Bianco. j. Douglas Wilson [ 139 ] Douglas Wilson works in computer support and website design. Mr. Wilson indicated that he worked with Mr. Del Bianco over an approximately 10 to 14-year period.

He developed various websites and also developed an office space with a number of computers which was meant to serve as a call centre for ER.

[ 140 ] In the early 2000’s, he and Mr. Del Bianco discussed setting up a full file server through which ER members could connect with lawyers that Mr. Del Bianco was going to place on retainer. Mr. Wilson indicated that this was never done, as Mr. Del Bianco underestimated the amount of programming that would be required to successfully set such a system up. Mr. Wilson estimated that setting this type of system up would cost approximately $50,000-$60,0000. He intimated that Mr. Del Bianco did not appear to truly grasp the complexities involved in setting up this system.

He said that, by the end of his relationship with Mr. Del Bianco, there was no physical call center, which lead him believe that the company was “less ready” to go forward. [ 141 ] Mr. Wilson said that in approximately 2012, Mr. Del Bianco contacted him to set up a PayPal type system to accept billing through credit. Mr. Wilson expressed some surprise at this request, as he believed that the infrastructure to support anything large scale was not yet in place. He stated that Mr. Del Bianco informed him that he had some lawyers on retainer. [ 142 ] Mr.

Wilson testified that, to his knowledge, no server was ever set up to host the ER insurance scheme, and that no related programming ever occurred. Mr. Wilson did some work on setting up a pre-paid credit card, but never completed it. He stated this his engagement with ER ended in around 2015. Mr. Wilson indicated that he was familiar with an individual named Jason Ostopchuk and believed that Mr. Ostopchuk was assisting Mr. Del Bianco with some website work. [ 143 ] Of note, Mr. Wilson testified that, in 2003, he accompanied Mr. Del Bianco to a board meeting in Canmore.

His evidence was that, while he did have a discussion with Mr. Del Bianco about joining the board, nothing formal such as a nomination ever occurred. Mr. Wilson stated that, each time Mr. Del Bianco queried whether he would be interested in assuming a board role as a financial officer, he responded that he was interested “but once your company gets to the position that there is a board that can be filled out and a management group, and a more….functional company”. He stated that he never agreed to participate as a member of the ER board, implying that ER never reached this point. [ 144 ] Mr.

Wilson testified that he was later informed that he had been named treasurer of ER. He did not know this had happened. He was unequivocal that he did not know he was purportedly in this position and that he never participated in any of ER’s business as an officer. He testified that Mr. Del Bianco had gifted him approximately 200,000-300,000 shares, without his knowledge. When asked what he believed these gifts were worth, Mr.

Wilson provided the following salient, if generous, response: Well, I didn’t view them as worth anything until – I mean, while it appeared that David was hustling and trying to make something happen, it was – it was still a very small venture with lots of big goals, and I – I never saw it progress much more than that.

There were lots of times where he came and said, Oh we’re – we’re this close to this and I’m this close to this, and I’m going to go get on a plane and – and these guys are going to do this, but for whatever reason they…didn’t pan out, so I didn’t view them as more than – than just kind of the value of the paper that they were on. [ 145 ] Mr. Wilson said that he did not think the company or its shares were worth much, as there was still a large amount of work to complete. He indicated that “that’s not to say the work couldn’t get done in my mind.

It just – it wasn’t there at that time”, by which he meant 2015-2016, when he parted ways with Mr. Del Bianco. [ 146 ] During cross-examination, much was put to Mr. Wilson that he could not personally verify, other than largely to state that he had been told peripheral information about the workings of ER by Mr. Del Bianco himself. He could not verify the accuracy of any of these statements. He was able to confirm that Mr. Del Bianco opened up offices in various locations and that some offices had computers in them. He did confirm during cross examination that at some point he designed some graphics for Mr.

Del Bianco specifically for the RCMP. [ 147 ] Mr. Wilson further agreed that he never witnessed Mr. Del Bianco abuse any funds coming in and that his “scam meter” never went off. Rather, he described Mr. Del Bianco as an autocrat who was “driving a car which was barely running”. Mr. Wilson indicated that, because Mr. Del Bianco had spent funds acquiring computer hardware, he believed that ER could be a viable entity in the future. Mr. Wilson said that Mr. Del Bianco spent approximately $35,000-$40,000 between 2003-2009 on computer hardware. k. John Wilcox [ 148 ] John Robert Wilcox is a commercial realtor.

He testified to having been involved in leasing three separate office spaces for Mr. Del Bianco and ER. He estimated that the final lease was secured in approximately 2000. Mr. Wilcox was also an investor in ER in the late 1990’s, receiving shares for his investments. He indicated that he had never attended an ER Board of Directors meeting, nor was he involved with ER’s “Executive Administration Team”. Further, he said that he never provided permission to be held out as a part of ER’s management team. [ 149 ] Mr.

Wilcox acknowledged that he was listed in ER promotional materials as a Director, Officer, and Shareholder, and at another point as Director, Officer, and Secretary. However, he stated that he was unaware that these documents existed until approximately 2018, when he spoke with the RCMP at the ASC. Mr. Wilcox testified that he questioned Mr. Del Bianco about how his name came to be listed a Board member, but he never received a “satisfactory answer” as to how this occurred. [ 150 ] During cross-examination it was suggested to Mr.

Wilcox that the documents naming him as a Board member were only shown to him to see if he was interested in such a position, and that when he declined, they were destroyed. Mr. Wilcox agreed that he had verbally been asked if he wanted to “come aboard” and that he declined. l. Francisco Schipperheijn [ 151 ] Mr. Schipperheijn also testified for the Crown. He described himself as an inventor. He first met Mr. Del Bianco at a form of religious educational gathering in 2009 or 2010. In either 2010 or 2011, Mr. Schipperheijn met again with Mr.

Del Bianco in order to discuss the central portal and software requirements of ER. Mr. Wylie was also present at this meeting, He indicated that when he first reviewed ER from a technological basis there did not appear to be anything actually going on in that there was no specific or registered domain name, but rather only a subdirectory URL. Mr. Schipperheijn found this concerning because, given his understanding of the ER

enterprise, it required much more control than could be done with what ER had. [ 152 ] Mr. Schipperheijn said that he expressed his concerns to Mr. Del Bianco, who then asked if he would be interested in helping ER develop something that would facilitate what was actually required. He agreed and a further meeting was held in Edmonton with Mr. Del Bianco as well as an individual that Mr. Schipperheijn identified as Mr. Del Bianco’s “technical guy”, who he subsequently identified as being Jason Ostopchuk. They talked about the subdirectory issue as well as discussing a credit card technology being developed by Mr.

Schipperheijn. [ 153 ] Mr. Schipperheijn explained that his second meeting was to discuss what would be required from an IT standpoint to make the ER system workable. He indicated that such a system would be complicated, and that the existing subdirectory system was barely a destination. He described ER’s internet portal as “bare bones” having no interface. He was clear that he regarded ER as having, essentially, nothing capable of hosting the business presence of something akin to what it purported to be. [ 154 ] Mr. Schipperheijn said that he met Mr. Del Bianco as well as Mr.

Wylie on a third and final occasion in Red Deer, and that this meeting was focused on a credit card system. [ 155 ] According to Mr. Schipperheijn, he had suspicions about the ER enterprise. Mr. Schipperheijn testified that a number of factors caused increasing concern, including seeing what ER was using as a portal to run its operation, observing that nothing concrete had been accomplished since the previous meeting, and noting that an individual who was meant to attend the meeting simply did not show up.

He indicated that he was suspicious even before the third meeting but he “wanted to see how far things went”. [ 156 ] Mr. Schipperheijn testified that, following this meeting, he spoke to Mr. Wylie in order to voice his concerns. He stated that he did so because he understood that Mr. Wylie had been involved in raising money and he would “hate to see anybody get taken advantage of”. Mr. Schipperheijn stated that, because he has run a public company, he was aware of the regulations and rules and that in his mind “things weren’t adding up”. [ 157 ] Mr.

Schipperheijn indicated that he had no further communications with Mr. Del Bianco after this conversation with Mr. Wylie, and he expected that Mr. Del Bianco was aware of the fact that he had blown the whistle on the operation. Mr. Schipperheijn indicated that he did speak to Mr. Wylie on two subsequent occasions following this discussion. [ 158 ] To the extent that it was suggested during cross-examination that Mr. Schipperheijn was fabricating his evidence due to the fact that he was unhappy about not having the use of his credit card technology further pursued by Mr. Del Bianco, I reject this theory outright.

Mr. Schipperheijn presented as a very credible and impartial witness who did the right thing by advising investors about something he believed was inappropriate before walking away from the situation. m. Nicole Chute [ 159 ] I turn finally to the expert evidence called by the Crown. As noted above, a very detailed Financial Analysis was performed on ER, Mr. Del Bianco, and the related companies and accounts by the Crown’s expert, Ms. Chute. I found her to be very credible and highly persuasive. Her opinion remained consistent in the face of an aggressive cross-examination by the accused.

To the extend that the figures in her Forensic Analysis differs from any of the figures put forward by the investor-witnesses or by the accused, I accept the numbers used by Ms. Chute. [ 160 ] Ms. Nicole Chute was qualified as an expert in source and use of funds analysis. Ms. Chute is a Chartered Accountant/Chartered Professional Accountant with a Bachelor of Commerce from the University of Saskatchewan. She has worked for the ASC for 20 years and currently holds the title of senior advisor and forensic accountant, investigations.

In 2012 she qualified as a Certified Fraud Examiner and in 2014 she became certified in financial forensics. Ms. Chute indicated that, although she has never been previously qualified as an expert, she has testified in front of courts or commissions on approximately seven or eight occasions concerning: (

i) evidence on the source of use of funds, and (ii) distribution/disclosure investigations. [ 161 ] Ms. Chute became aware of ER while she was a member of JSOT with the Commission. She acted primarily as a forensic accountant, performing a source and use of funds analysis of four bank accounts associated with ER and the accused. She analyzed bank records obtained via production orders by JSOT, documents provided by investor witnesses, and reports from the other investigators on file. [ 162 ] Overall, I was satisfied under the White Burgess test that Ms.

Chute was properly qualified to give evidence within the scope noted above: White Burgess Langille Inman v Abbott and Haliburton Co , 2015 SCC 23 . The academic qualifications on her CV highlight her in-depth education in this area. This is an area in which the Court requires assistance in understanding the flow of investor and other funds. More importantly, despite working for the ASC, I was satisfied that Ms. Chute understood and honored her duty to act as an independent, objective, unbiased, and impartial witness for the Court. [ 163 ] Ms.

Chute provided a global accounting analysis on Excel consolidating Equal Rights and Equal Rights Legal Defence alliance Inc.’s Canadian Western Bank and Toronto Dominion bank accounts, as well as Mr. Del Bianco’s personal bank account at TD. There was also a spreadsheet created for the Bank of Montreal account in relation to Magnum Cavalier Developments Ltd. Ms. Chute also obtained and reviewed financial documents for the Affordable Legal account (TD 6853) but did not perform an analysis of this account as the fund flow-through was not significant enough to warrant such an analysis. [ 164 ] Of note, Ms.

Chute’s materials (exhibit 24) included documents evidencing the opening of the ER TD corporate account (TD 3468) and the ER (USA) TD (TD 0962). These documents show that the ER TD 3468 account was opened in August of 2010. Again, there was a consolidation from the prior CWB account. The ER TD 3468 account evidence only one authorized signature – that of Mr. Del Bianco. In addition, the TD “Business Banking and Services Agreement” dated August 24, 2010, contained in this exhibit indicates that the TD 3468 account is a corporate account.

While the agreement contemplates more than one signing authority, it states that any such authority must be identified by the signatory to the agreement, who is Mr. Del Bianco. No such further identification has been

provided or shown to exist. [ 165 ] The opening documents of the ER TD 3468 account contains an accompanying corporate resolution of Equal Rights Legal Defence Alliance Inc., also dated August 24, 2010. It states that “…the officers, directors and employees of the Corporation listed hereafter as authorized representatives for and on behalf of the Corporation…are also authorized to conduct all aspects of the Corporation’s banking relationship with the Bank…”. The sole signing officer indic

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