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Fraudster could be ordered to pay back over $1 million

A former High River businessman apologized in disgrace last week in a Calgary courtroom for a scam that fleeced investors of over $1 million.

A former High River businessman apologized in disgrace last week in a Calgary courtroom for a scam that fleeced investors of over $1 million.

James Farquharson Macleod opened a mortgage brokerage in High River in 2006 and said his office soon became a social hub with people dropping in all day for drinks and socializing.

Macleod was also well known in the town as the great-grandson of Col. James Macleod – an officer of the North West Mounted Police who founded Fort Macleod near Lethbridge.

In 2009, Macleod began approaching people to invest their money in mortgages and offered up to 15 per cent returns. Several people began investing with Macleod. He said he soon realized he couldn’t find investments that yielded the results he’d promised.

“I became careless,” Macleod said. “I mismanaged the investments.”

During his trial court heard Macleod deposited the money in accounts that were also used for his then-failing mortgage business and that he also used investors’ money for his personal expenses and during trips.

He told the court he is a changed man since the scam ended in 2011.

“Over the past six years I’ve worked to be 100 per cent different than the man who was in High River,” Macleod said.

He choked up while reading the hand-written statement to the court and afterwards took off his glasses and wiped away tears. Macleod and his wife are now both working at a Nanaimo car dealership and he said he makes $120,000 as the general sales manager.

Two of the victims were in court to hear the apology.

Keith Murray invested with Macleod. Murray called him a ‘liar’ and said he never expects to get any of his money back.

“If he’s making $120,000 for three years and he’s paid zero restitution then he never will,” Murray said.

One of Macleod’s former best friends who loaned him money to deal with his business problems submitted a victim impact statement saying he now has a hard time trusting people and no longer likes to go out because he is constantly questioning about what he knew about the scam.

The fraud was uncovered six years ago when some investors caught on to Macleod’s financial troubles and confronted him. After a meeting with investors and Macleod, where some said he admitted to running a scam, the police were notified. Three years later, Macleod was charged with fraud over $5,000. He has since moved to Nanaimo.

In court last week Macleod’s lawyer, Albert King, asked that his client receive a conditional sentence order that would place him on house arrest at his Nanaimo home for a year and allow him to keep his job.

“The only chance this man has to pay back any restitution order is he has to stay where he is,” King said.

Macleod’s lawyer also suggested the sentencing could be delayed a week or two to allow him to spend time with his father, who is dying of liver cancer.

Crown prosecutor, Steven Johnston, is asking for a five-year jail sentence for the one-and-a-half-year scam, which he says was a Ponzi scheme.

“Mr. Macleod acknowledged he had no experience and he tried to operate an amateur mutual fund or hedge fund,” Johnston said, explaining that when you pay investors with other investor’s money it is a Ponzi. “In a large-scale commercial fraud like this, five years is appropriate.”

Macleod doesn’t have the exceptional circumstances required to consider a conditional sentence, Johnston said.

Justice Corina Dario will sentence Macleod Nov. 27 in Calgary.

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