CALGARY — A Calgary man accused of defrauding investors around the world out of at least $100 million dollars was sharp, charismatic and convincing, says a couple who lost hundreds of thousands of dollars.
The RCMP laid fraud charges against Milowe Allen Brost earlier this week, alleging he and another man ran a significant Ponzi scheme involving at least 3,000 investors.
Helmut and Genie Vollmer of Calgary invested $350,000 with Brost at the urging of their longtime accountant.
A photo released of Brost shows him squat and unsmiling, but the Vollmers said he came alive before an audience of investors.
“We were at several meetings with him, and we thought, ’he’s the man’,” said Helmut Vollmer.
Brost came off as very smart and could rattle off information on a wide variety of financial subjects, added Genie Vollmer.
“I’ve never ever met a person like him. He was very convincing, a great spokesman. It’s unreal.”
Police say Brost and Gary Allen Sorenson, 66, allegedly took money from thousands of investors in Canada, the United States and overseas between 1999 and December 2008. RCMP allege that the pair set up Syndicated Gold Depository S.A., which was supposed to lend money to Merendon Mining Corporation Ltd., with the promise of a high rate of return and tax advantages.
These perks were used to entice investors into pumping money into offshore shell companies which were marketed by Brost’s firms Capital Alternatives Inc. and The Institute for Financial Learning Group of Companies Inc., police said.
Both men are charged with fraud over $5,000 and theft over $5,000. Brost was released on bail and is due back in court on Oct. 19. Sorenson is believed to be in Honduras.
At meetings with investors, Brost used a chalkboard to document where their money would go, showing how it would leap from investment to investment and grow exponentially, Helmut Vollmer said.
At the last meeting the couple attended in May 2007, investors packed a Calgary hotel room, leaving standing room only, said Genie Vollmer.
There were signs Brost’s composure was beginning to crack as he assured investors that it would only be a short time until they could withdraw their money, she said. His characteristic bravado had given away to some uncertainty.
“He was so different then. The way he spoke, his voice was different,” she said.
Still, his presentation convinced the couple not to worry, that it would only be a little while longer until they could collect on their money. They never heard from him again, said Genie Vollmer.
That same year, the Alberta Securities Commission ordered a lifetime market ban and fined Brost $650,000 for “fraud on investors.” The securities panel said Brost was “at the centre of this fraudulent scheme” to lure public investors into putting money into a shell company which the panel said was intended to finance Sorenson’s offshore mining ventures.
Other investors have posted their stories on a website set up to warn people away from the Institute for Financial Learning. One told of losing her home because she and her husband couldn’t make mortgage payments once their funds were cut off in 2007. Another told of moving home with his sister to help his parents with bills after they put $250,000 into the company.
The Vollmers, who are both in their 70s, say they know their money is likely gone. They didn’t invest all their retirement savings in the plan, but say they’ve heard stories of those who have.
Genie Vollmer says if anyone is convicted of a crime in the case, they should face a harsh punishment.
“I think just behind bars, that’s not enough. I hope they get more than that, that they lose everything they have, that they maybe have a feeling what it is to maybe just have your shirt on your back.”
“They’ve done that to so many hundreds of people.”
Justice Minister Rob Nicholson announced Tuesday that the government will introduce legislation this fall that would see mandatory minimum jail terms, longer sentences and confiscation of assets for fraudsters and other white-collar criminals.