Crown wants two years for Kamloops Ponzi scammer
The Crown wants an admitted Kamloops Ponzi scammer — who duped eight clients out of more than $300,000 — locked up in a federal prison for two years.
Ed Chieduch appeared in person in Kamloops provincial court on Monday, June 25, as the Crown laid out its case against the 58-year-old former financial planner.
Court heard Chieduch used forged investment documents to take money from clients over a five-year span dating back to 2005.
Crown prosecutor Chris Balison said Chieduch told police he was a victim himself — getting suckered into a so-called Nigerian email scam.
"He told police he was caught up in a bad overseas investment," Balison said.
"He used this [Ponzi scheme] to try to make up for his own losses."
Balison said the scam netted Chieduch $312,000.
In 2010, Chieduch had his licence yanked by the Insurance Council of B.C. — at about the same time a police investigation into his actions was getting off the ground.
Chieduch's lawyer, Matt Ford, asked for a sentence of one year in custody or two years less a day house arrest. Ford said Chieduch will also pay $200 per month in restitution.
A number of Chieduch's victims were in court for the hearing.
Chieduch is slated to return to court on July 26 to be sentenced.
What follows is the April 24 KTW story in which some of Chieduch's victims spoke of their experiences:
It was February of 2010 and Carol had just gone through a divorce.
She received a financial settlement — enough to pay her daughter’s tuition fees and keep $10,000 set aside for a down payment on a house.
Carol gave the $10,000 to her financial planner, Ed Chieduch — someone she trusted and considered a friend. When it came time to put an offer on a house, neither Chieduch nor the money were anywhere to be found.
Margaret was a 60-year-old woman living in Kamloops and she had $100,000 she was looking to invest.
Chieduch took her money, saying it would go into a high-yield real-estate fund.
When Margaret died in 2010, her daughter contacted Chieduch, looking to collect the cash.
What she received instead was an IOU.
In August of 2008, Matthew was a 28-year-old entrepreneur.
Chieduch, someone Matthew had known for a long time, approached him and said he had a great investment opportunity.
Matthew handed over $20,000 and signed a contract for a two-year term, not thinking much of it.
When Matthew noticed his dividend payments weren’t coming through, he called Chieduch, who blamed the mix-up on a secretary who had been “stealing the money.”
That was another lie.
Chieduch, 58, has admitted in court to eight separate investment frauds — including the three listed above.
(KTW spoke with a number of Chieduch’s eight victims. Carol, Margaret and Matthew are not the actual names of the people involved in the stories detailed above.)
In April 2011, Chieduch was charged with eight counts of fraud over $5,000. In March of this year, he pleaded guilty to a single amended count covering each of the eight offences.
Chieduch, who did business as Chieduch Financial, with an office inside a Victoria Street building, was apparently a trusted financial advisor.
Licensed as an insurance salesman — that certification was yanked in 2010, when allegations regarding the frauds began to come to light — he oversaw the investment of large amounts of money on his clients’ behalf.
Court records show Chieduch’s frauds began in 2005, but those close to him believe shady investments had been going on for some time before then.
He would tell his victims — with many of whom he had personal friendships — he had a hot investment opportunity.
A “real-estate equity fund” is what Chieduch called it, promising a tax-free 10 per cent return annually.
According to a lawsuit filed by one of the victims listed in the criminal charges, Chieduch even described the investment as “100 per cent guaranteed.”
It worked like this: A client handed his or her money and banking information to Chieduch. Chieduch promised to deposit the earnings into the client’s bank account each month. Every 30 days, a dividend return was to be deposited into the client’s account.
The papers were drawn up on letterhead of a well-known insurance company, but clients were often asked to pay with personal cheques made out to Ed Chieduch.
When it came time for those returns to start accumulating in clients’ bank accounts, payment was sporadic at best.
“He was robbing Peter to pay Paul,” one victim told KTW.
“It was a big Ponzi scheme,” said another.
One thing no one is certain about is just where the stolen money was going.
Allegations ranged from drugs to booze to women to misguided investments of his own.
One issue raised by a number of former clients, and others close to Chieduch, is the number of victims — eight — listed in the criminal charges.
“I heard there were a lot more than that,” said one victim.
“I think this was going on long before we heard about it,” said another victim.
The 2010 Insurance Council of B.C. decision to cancel Chieduch’s licence described him as “an immediate risk to the public.”
The decision also hinted at the possibility there were many victims.
In addition to the criminal charge to which Chieduch has pleaded guilty, there is an ongoing lawsuit filed by one of the victims.
Chieduch was also sued by the company from which he used to rent his Victoria Street office.
Last year, a judge ordered he pay the company $5,395.20 to cover a $2,000 loan, in addition to unpaid rent and postage bills.
Other victims who have yet to file lawsuits against Chieduch hinted to KTW they still might do so.
“But, what’s the point?” one asked.
“The chance of getting your money back at this point is very slim.”