Financial advisor sentenced to two years in prison
A disgraced Kamloops financial advisor who duped clients out of more than $300,000 in an elaborate five-year Ponzi scheme will spend the next two years in a federal prison.
Ed Chieduch was sentenced on Thursday, Sept. 13, to a 24-month jail term for what Kamloops provincial court Judge Chris Cleavely called a "callous" scam.
Between 2005 and 2010, Chieduch bilked eight clients out of $312,000 — with victims losing between $15,000 and $100,000 each.
During sentencing submissions earlier this year — after the 58-year-old pleaded guilty to one count of fraud over $5,000 covering all eight former clients — court heard most of the victims considered themselves friends of Chieduch prior to being duped.
Chieduch used forged investment documents promising a 10 per cent return. Some of the victims were paid partial returns until 2008, when the scheme collapsed.
For his part, Chieduch tried to claim he was a victim himself — stealing the money to cover losses he suffered as part of a so-called Nigerian investment scam.
Court heard the financial planner, with more than two decades of experience in the field, received a phone call in 2005 from someone in Nigeria named "Dr. Smith," who promised full access to a "dormant bank account" containing $25 million US.
All Chieduch had to do to unlock the account was pay $25,000 US.
He said he ended up losing $300,000 to Dr. Smith, but had little documentation to back it up.
In handing down his sentence, Cleavely called Chieduch's claim he was a victim "nonsensical" and dismissed it entirely.
"Is it reasonable to believe Mr. Chieduch was duped by a Nigerian scam?" the judge asked. "If so, is it a mitigating factor?
"The answer to both those questions is no."
Cleavely said Chieduch should have known better, especially given the fact he claims to have been ripped off in a similar fashion by a scammer in the Philippines in 2002.
"It is my view that an experienced financial advisor such as Mr. Chieduch cannot reasonably submit that he was a victim of fraud," Cleaveley said, calling Chieduch's attempt at mitigation "a callous attempt."
Following the sentencing, Chieduch was handcuffed by a court sheriff, who then grabbed him by the arm and led him into the Kamloops Law Courts' holding cells.
He will serve his sentence in a federal penitentiary.
In addition to the jail term, Cleavely also made restitution orders in the principal amounts Chieduch stole from each of his eight victims.
Because Chieduch filed for bankruptcy last year, the victims will likely have to sue him if they ever want to see any of their money.
In 2010, when clients began to file complaints about Chieduch's investment practices, he had his trading licence permanently revoked by the Insurance Council of B.C.
He had been free on bail since his arrest in 2010.