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| Fraud mastermind jailed seven years | |
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Daryl Slade July 6, 2005 |
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Describing him as an "economic predator," a judge has sent a Calgary man to prison for bilking dozens of people -- most of them trusting city cops -- out of more than half of their $2.87 million in investments. |
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"Daryl Heiligsetzer, for 31 months from January 2001 until July 2003, concocted and perpetuated a massive, fraudulent scheme through lies, deceit and false pretences," provincial court Assistant Chief Judge Brian Stevenson said Tuesday. |
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"He was able to establish credibility to the scheme in two ways: using well-known trade names of products . . . and (Staff Sgt.) Kirk McCallum, a longtime friend and associate." |
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Stevenson sentenced Heiligsetzer, 42, to seven years less double credit for nine months of pretrial custody, leaving him with 51/2 years still to serve for the so-called "Ponzi" scheme, in which the offender paid initial investors their profits from subsequent investors' money. |
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Heiligsetzer used $1,226,967 of the fraudulent profits for himself ($261,897), his wife Anne ($154,655), his girlfriend Lynne Westwick ($196,557) and the business expenses of his company, Flarrow Hockey Sticks ($613,858). |
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The father of three pleaded guilty to fraud last October. |
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"We're satisfied with the range of sentence -- seven years," said 23-year police veteran Sgt. Ross Serbin, a member of the dog handling unit and one of 32 police victims of the fraud. |
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"We're gratified justice is being done. He has had a significant impact on a large number of people." |
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Crown prosecutor Bill Pinckney, who argued for six to eight years, suggested Heiligsetzer's actions were prompted by greed, and there were no signs to indicate remorse or that he was a candidate for rehabilitation. |
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"The pre-sentence report indicated he had been making $100,000 a year before he got into this (scam)," said Pinckney. "It was not a thing to keep the wolf from the door." |
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An agreed statement of facts indicated Heiligsetzer approached friends and acquaintances and told the potential investors that his sporting goods business could purchase outdated hockey equipment from Bauer or Easton at reduced prices and sell it to small retailers in Canada, the United States and Europe. |
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He said he needed money to pay the suppliers in advance and guaranteed investors between 15 and 35 per cent return on their money within 90 days of the investment. |
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Defence lawyer Jack Kelly said it was not as sophisticated a scheme as the Crown suggested, and that his client was not in a position of trust, such as an employer or bank manager. |
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"A number of police officers took advantage of this opportunity," said Kelly. "He simply offered them an investment that was not true and took advantage of their gullibility." |
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One of the initial investors was McCallum, who was brought into the company as a 42 per cent partner. |
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McCallum, according to the court document, solicited family members, friends and police associates. These investors provided McCallum with cheques or bank drafts for deposit to his account at the Calgary Police Credit Union. McCallum distributed the proceeds to the investors dealing with him. |
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Calgary Police Association president Al Koenig said the union has had no direct involvement in the case, because it was not directly related to policing duties. |
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Of the 40 people who dealt primarily with McCallum and invested $2.5 million, 32 lost money. Only one of 18 people who dealt with Heiligsetzer made a profit. |
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McCallum was the most successful investor, earning a tidy $190,398 profit on $202,694 in investments. |
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He also is facing fraud charges in connection with the scheme and will be in court for a preliminary hearing on Nov. 7. McCallum has declared bankruptcy and is on paid leave from his job pending outcome of his trial. |
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dslade@theherald.canwest.com |
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© The Calgary Herald 2005 |
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Leo Knight's Column: Police held to higher standard |
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