A Red Deer man involved in a multi-million dollar Ponzi scheme was sentenced to four years in prison and ordered to pay just under $3.3 million in restitution to his victims.
Joshua James Tenhove, 49, pleaded guilty to fraud over $5,000 in Red Deer Court of Queen’s Bench last September, on what was to be the first day of his trial.
As the owner of Silvertip Energy, Tenhove’s oilpatch scheme involved buying and renting out mobile light towers. He swindled victims in Canada and the United States out of $10 million, and was possibly the largest fraud case in central Alberta.
On Thursday, Justice Marilyn Slawinsky agreed with the four-year prison sentence put forward in a joint submission from the Crown and defence.
Four other fraud-related charges were previously withdrawn against Tenhove.
Slawinsky said being convicted of one count in no way illustrates the extent of the crime or impact on its victims.
She said the terrible fallout from the fraud goes beyond financial ramifications and can leave victims with shame, worry and anger.
“This has no doubt changed the trajectory of your lives,” Slawinsky said.
Slawinsky said Tenhove displayed genuine remorse, but the prospect of restitution payment was uncertain.
Defence lawyer Peter Tesi said $1 million being held by the manufacturer Mobilight in the U.S. may be accessible, but the clock was ticking on a statute of limitations.
“(Tenhove) has lost everything. He doesn’t have anything,” Tesi said.
Ten victim impact statements were submitted to the court, including from a couple who were former friends of Tenhove.
“Mr. Tenhove didn’t just steal money from us, but a 30-year friendship,” said the victim who told the court their investment required a major bank loan that has left them financially ruined.
“I am not able to participate in life because I’m working three times as much. I may never retire,” said the victim worried about the impact on her health.
Among Tenhove’s victims was Alberta Treasury Branch (now ATB Financial), Finning Cat and other individual and corporate investors.
Crown prosecutor Colin Schulhauser said ATB successfully sued Tenhove, but he also caused serious financial and emotional stress for other victims who blame themselves and reported thoughts of suicide.
He said they ask themselves should I have known?
“The mental impact of that may carry on forever,” Schulhauser said.
He said it was a sophisticated, complex and lengthy fraud that Tenhove could have stopped when his venture became unviable.
Tenhove was arrested in December 2017 following an investigation that saw Red Deer RCMP’s financial crimes unit work closely with the U.S. Secret Service and the Financial Transactions and Reports Analysis Centre of Canada.
According to an agreed statement of facts the complicated scheme involved a $1.55-million loan and $75,000 revolving line of credit from ATB, which was to be used to buy 35 light towers so they could be rented out to customers.
Tenhove made a number of subsequent deals with individuals and companies to sell light towers for rent. One person paid $2 million for 37 light towers. Other deals ranged from $86,000 to $1.6 million.
Most of the money raised was used to buy light towers. However, Tenhove used some of the cash from investors to pay others, disguising it as rental income from the towers.
Tenhove told the court he started out wanting to create a better world, and when challenges arose with his venture he made a conscious decision to deceive, convinced it was the only way out.
Tenhove’s sentence included a 15-year prohibition from dealing with other people’s finances.