By Aly Thomson
THE CANADIAN PRESS
HALIFAX _ The Nova Scotia financial manager behind an investment scam “paid a hard price for his greed,” a judge said as she ordered him to pay back about 200 investors he bilked out of $1.1 million.
Quintin Sponagle of Upper Vaughan, N.S., pleaded guilty to fraud in December.
The charge involved 201 people who invested more than $4 million through Jabez Financial Services Inc. a Windsor, N.S., company registered in Panama. Sponagle has admitted he was responsible for $1.1 million that was not invested.
He used that money to buy cars, recreational vehicles and property and for international travel, cash withdrawals and other personal expenses, Judge Anne Derrick said in a new decision.
Derrick said he used other people’s hard-earned money to “feather his own nest,” and ordered Sponagle to pay the victims $1.1 million in restitution.
“Mr. Sponagle betrayed his investors and whatever moral code he may have had, primarily so he could live the good life and enjoy material benefits that otherwise would presumably have been beyond his means,” said Derrick.
“The fact that no restitution has been made by Mr. Sponagle in the over 10 years since his fraud was … means that these many victims have had their trust betrayed and have suffered harm, in some cases irreparable harm, to their future plans, to the security they were counting on for their retirements, and to their health, well-being and happiness.”
Derrick also accepted a joint recommendation from Crown and defence lawyers to sentence Sponagle to a year’s probation and time-served in jail.
Sponagle spent 19 months in Panama’s La Joya Penitentiary described by the judge in this case as “one of the world’s worst prisons.”
“He has paid a hard price for his greed,” she said of his time imprisoned in Panama.
Sponagle was brought back to Nova Scotia in November 2014 and released on bail a month later after posting a $45,000 surety.
The judge said victim impact statements revealed Sponagle’s actions affected the investors emotionally, mentally and physically, and shook their trust in others.
Many victims were from Sponagle’s “immediate social group,” she said.
“I have no doubt that Mr. Sponagle was seen by his hapless investors as an upstanding fellow citizen who provided no reason for anyone to mistrust him,” the judge said. “Mr. Sponagle used the trust he had been accorded by vulnerable and naive victims for his personal benefit.”
In October 2011, the Nova Scotia Securities Commission found Sponagle and Trevor Hill engaged in unfair practices, solicited investments without being registered in Panama or Canada, and failed to file a prospectus before distributing securities.
The commission concluded that between April and September 2006, the pair traded securities after receiving $4.1 million from 137 residents of Nova Scotia and 52 residents of other provinces.
“Mr. Sponagle spent investors’ money on himself, and indulged friends, relatives and business associates including Mr. Hill and his family,” the commission said in a statement dated Oct. 20, 2011.
The commission said the pair’s actions amounted to a “deceptive and dishonest ruse, designed to extract money from trusting and unsuspecting Canadian investors. It was in the nature of a ‘Ponzi scheme.”
It said Sponagle was the “mastermind of this scam,” and it banned both men from becoming or acting as a director or officer of any publicly traded company, or acting as an investment fund manager or promoter.
They were also ordered to each pay a $500,000 fine the maximum penalty at the time.
Auditors recovered about $2 million from Sponagle’s accounts, but only a portion was returned to investors, once financial fees were covered.