Ponzi case moved to Calgary
Stark, Fyn, Bailey and Katherine Rodrique Bailey of Okotoks were also charged with laundering proceeds of crime and conspiracy to launder proceeds of crime.
They initially appeared in provincial court in Drumheller on April 16, 2010.
Counsel appeared as agents for three of the four accused in provincial court in Drumheller on Friday, March 18. Special Prosecutor Peter Mackenzie spoke for the Crown.
Mackenzie told the court the four were charged in the spring of last year and Special Prosecutor Susan Mulligan initially held the file, however she is no longer with the office. Mackenzie took over the file in November of last year.
Because the Drumheller court house would not be able to accommodate the extensive case, he proposed that it be moved to the Calgary Court Centre.
The four are to appear on April 15 in Calgary.
According to the original police release, the RCMP Calgary Commercial Crime Section launched this investigation in 2004 and believe approximately one thousand victims throughout North America invested more than 60 million US dollars into various alleged fraudulent investment programs offered by HMS Financial.
Investors allege that their investments with HMS Financial were to return 8 - 12% or more per month. Investors were told their investments were risk free, alleging they were advised that Garth Bailey, HMS Financial's lawyer, held bonds valued in the millions of dollars which would be liquidated should the investments fail to pay out. Investigators have not been able to identify the existence of any bonds and believe this high yield investment program was a Ponzi scheme. It is alleged that in order to perpetuate the scheme and entice new investors, HMS Financial paid 10 per cent a month every quarter to those investors who chose to accept a quarterly payout of interest. The payments are believed to have been drawn from funds provided by other HMS clientele.
Investigators believe the investment program operated by HMS Financial failed in March 2004 when HMS Financial could not meet their payout obligations. HMS Financial collapsed just as the RCMP investigation began.
