A Red Deer man has pleaded guilty to bilking investors in a multi-million dollar Ponzi scheme involving the purchase and rental of industrial light towers.
Joshua James Tenhove pleaded guilty to fraud over $5,000 in Red Deer Court of Queen’s Bench on Tuesday morning, which was to be the first day of his trial. Four other fraud-related charges were withdrawn.
Among Tenhove’s victims was Alberta Treasury Branch (now ATB Financial), Finning Cat and other individual and corporate investors.
He was arrested in December 2017 following a complex 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 (FINTRAC).
Reading from an agreed statement of facts, Crown prosecutor Colin Schulhauser, from the specialized prosecutions office in Calgary, outlined a complicated scheme involving 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.
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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.
Schulhauser said that 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.
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The Crown prosecutor said he will be asking for a restitution order to return money to Tenhove’s victims. The amount to be requested was not revealed on Tuesday. Another order will be requested barring Tenhove from having any financial dealings with investors.
Justice Marilyn Slawinsky agreed to a request from Tenhove’s lawyer, Peter Tesi, that a pre-sentencing report be prepared.
Tenhove is next due in court on Nov. 1, when a sentencing date is to be set, likely for early next year. Tenhove is not in custody.