Ontario court finds man guilty of fraud, orders him to pay $7.75 million

Admitting to using forged lawyers’ letters to maintain a business relationship, a former Ottawa resident faced charges of fraud over $5,000 and using a forged document. The Ontario Superior Court of Justice found Stéphane Gagnon guilty of these offenses. The Ontario Securities Commission (OSC) reported that the Toronto court sentenced Gagnon to five years in prison, excluding time served.

A statement from the OSC detailed that the court ordered Gagnon to pay over $7.75 million, equivalent to the entire net amount of fraud, along with providing restitution to victims and paying a fine instead of forfeiture. Failure to pay the fine could result in additional jail time. OSC’s executive vice president of enforcement, Bonnie Lysyk, expressed that the judgment was a significant win for Ontario investors affected by Gagnon’s actions.

The OSC revealed that Gagnon confessed to accepting more than $20 million from individuals across Canada between August 1, 2015, and May 31, 2021. He allegedly advertised that he could help investors access funds from locked-in retirement accounts, received funds from over 300 investors, diverted a substantial amount of the generated funds, and used counterfeit lawyers’ letters to sustain ties with a trust company managing investor assets. The OSC’s criminal investigations and prosecutions team initiated the case.

Lysyk commended the OSC’s swift action to shield investors and preserve market integrity, emphasizing the importance of protecting investors and capital markets against malpractices efficiently. The OSC’s criminal investigations and prosecutions unit collaborates with law enforcement agencies to investigate securities fraud, address market manipulation, and curb repeated offenses or breaches of court orders or Capital Markets Tribunal bans.

The OSC’s objective is to prevent investors from encountering unethical, unauthorized, or deceptive practices, ensuring fair, competitive, and credible capital markets, encouraging capital formation, enhancing financial system stability, and reducing systemic risks. The OSC often prosecutes offenses under Ontario’s Securities Act, 1990, while the attorney general’s ministry handles cases under the Criminal Code, 1985.

In another development, the Ontario Securities Commission has allocated approximately $875,000 to the Osgoode Hall Law School Investor Protection Clinic. The organization has also introduced new members to the Investor Advisory Panel. The IBA recently observed the initial United Nations International Day for Judicial Well-being in acknowledging the critical importance of addressing the well-being of legal professionals.