Col. James Macleod's descendant found guilty of fraud

A former High River man was not just a bad businessman, he knowingly defrauded friends and acquaintances of just over a million dollars, ruled a Court of Queen's Bench justice last week.

Justice Corina Dario found James Farquharson Macleod guilty of fraud over $5,000 and will sentence him Oct. 30 in Calgary. Macleod showed no emotion as the verdict was read.

Macleod is the great-grandson of Col. James Macleod, a commissioner of the RCMP who established the RCMP outpost Fort Macleod in 1874 and is also the namesake of Macleod Trail in High River and Calgary.

Around half a dozen of his victims and the lead investigator in the case sat in the gallery to hear the decision.

Dario rejected Macleod's testimony that he mishandled the investments due to a learning disability, lack of business knowledge and “being over his head.'

“There is no doubt in my mind that the investors were misled due to the dishonest statements and conduct of Mr. Macleod, a registered mortgage broker who operated a successful mortgage business and was known in the community,” Justice Dario wrote in her 19-page decision.

Macleod started out as a mortgage broker in 2006 in High River.

During his trial Macleod described how over the years in the town he became involved in service organizations and coffee groups.

He said his office became the social hub of High River and said people came by daily to drink and socialize. His mortgage business thrived, he testified, bringing in up to $400,000 a year.

In 2009 Macleod began a private investment venture, promising 14 to 16 per cent returns on investment.

Crown prosecutor Steven Johnston said Macleod tried to leverage his family history by naming his investment company New West Mortgage Placement Ltd. to build trust.

Macleod also built trust by paying interest and principal to early investors. When two original investors received their money back with interest, word spread, bringing in more investors. Some people re-invested after receiving their high interest returns, Dario noted.

Over two years Macleod took in $1.68 million, made no investments, returned some of the money with interest using new investors money and eventually ran out of money, leaving nine people out $1 million. Individuals, many from the Foothills including members from service clubs, lost between $10,000 and $200,000.

He also borrowed money from two close friends to keep his floundering finances afloat.

“He was well aware that he was accepting funds from investors and that such funds were being used for purposes other than stated to the investors,” Dario wrote.

Investors were told their money would be invested in mortgages for people who don't qualify, construction loans and bridge financing.

Dario determined Macleod used investors' money to pay back earlier investors, pay the bills of his mortgage business and personal expenses, including gas, phone bills, shopping and pet supplies.

“Between bolstering his reputation and ensuring there was sufficient cash flow for the TMG business, it is clear that Mr. Macleod had a financial motive,” Dario wrote.

Macleod's lawyer asked for sentencing submissions to be held in January.

Johnston protested, stating that length of delay was too long, especially since the defence already unsuccessfully made a Jordan application to have the case thrown out over the length of time it took the case to get to trial. Johnston also said letters of reference may or may not be admissible in this case because the issue of standing in the community is contradicted by his crime.