Regina businesswoman found guilty of defrauding investors of $5.5M

Atthe conclusion Thursday of acourt case that involved thousands of documents, 80 witnesses, 22 weeks of trial andfour lawyers,Alena Pastuch has been found guilty of fraud, money laundering and theft.

And now she's in custody and potentially facing a prison sentence.

Court of Queen's Bench Justice Richard Elson presided over the Regina businesswoman's trial.

Itstarted Oct. 15, 2018, after numerous delays, including four changes to Pastuch's legal counsel. During the trial Pastuchrepresented herself and calledno witnesses.

Elson stayedthe latter two charges, despite finding Pastuch guilty, on the principlethat no person is to be punished more than once for the same offence.

Fewer than 20 people were in the gallery for the decision. There was a muffled clap and one person quietly said "Yes"in response tothe guilty finding.

Pastuch frequently shook her head during the reading of the 88-page judgment.

Elson'sdecisioncame after he rejected Pastuch'sapplication seeking a stay of proceedings or a mistrial.

The RCMP investigationstarted in 2014 after three separate parties came forward stating they were the victims of fraud, perpetrated by Pastuch.

"Investors were victims of deceit," said Elson.

According to the court's judgment, between Jan. 25, 2007, and Oct. 20, 2009,Pastuch defrauded investors in British Columbia, Alberta and Saskatchewan to the tune of $5.5 million.

Early on the bulk of her investors were family members and other relatives who thought their money would be used in the development of computer security and technology based child protection software.

Crown prosecutor Dana Brule said many of the investors put in just shy of $10,000 each into the phoney companies, while the largest investor gave just over $1.2 million.

"Those significant losses are detrimental to anyone, let alone people who in a lot of this case were closer to retirement age. And as such, in some cases, people lost their entire retirement savings funds," said Brule. "I can only fathom what they're experiencing."

Brule said that this was one of the largestfrauds of its type and one of the longest trials in Saskatchewan's history.Over 80 people were wrapped up in the fraudulent projects Pastuch helmed.

"I am satisfied that the accused is the operating mind of the five companies into which investor funds were received," said Elson.

None of the investors received any return ontheir investments, and all but 10 investors lost all the money they gave to Pastuch.

'Investors were victims of deceit'

"The sense of entitlement is a significant factor that was ultimately relevant to the guilt of Ms. Pastuch,"Brule said.

Elsonsaid he was satisfied that of the $5.5 million acquired through fraud,Pastuch used over $3 millionto financea lavish lifestyle.

Court heard she travelled, bought sports memorabilia, clothes, attempted to fund a band named Volcanoless In Canada, bought a home andgambled extensively all with money that peoplethought was being invested in software companies.

"There is no question that all the investors in this case were led to belive that the funds they provided were to be applied to the development of forms of computer technology and software," said Elson. "It goes without saying they were hopeful for a return on their investment."

Pastuch periodically sent statements to investors describing the state of company, when people could expect to see huge returns in excess of 10 times their initial investment and what the company was currently valued at.

In an update from April 2009, investors were told how one company they had supposedly put money into (Strikeback Ltd., later renamed Idengego Inc.) had been valued at $20 million.

During the trial there was no evidence to support this valuation. In fact, according to the judgment, "there is no evidence to support the existence of any marketable product or any product sales at any time prior to the accused's arrest in 2014."

Speaking before the court Brule asked that Elson revoke bail for Pastuch, on account of her being a flight risk. Brule said prior to the verdict on Thursday Pastuch had indicated to the court numerous timesthat she wished to not be present on the decision.

"In my experience that is virtually unheard of," said Brule.

More significantly, the seriousness of the offence and the potentially lengthy term of imprisonment informed Brule's request to revoke bail. Brule also said he was unaware of any fraud conviction of over $1 million resulting in less than a sentence in a penitentiary. Prison time typically means a minimumtwo-year sentence.

When asked by Elson if she had any questions relating to her bail being revoked Pastuch said"I wasn't even aware that this would occur."

Elson asked Pastuch how long she would need to find a new caregiver for her mother and surrender herself to custody, to which she said she was unsure.

"This is a very, verybroad and discretionary consideration. And in many respects the judge is required to go by his or her instincts,"said Elson. "My instincts in this case are that your bail should be revoked."

Pastuch was taken into custody by deputy sheriffs in the courtroom. Shewill be sentenced on Aug 15.