The Ontario Securities Commission has announced that William Wallace and Robert Heward were each sentenced to four years in jail, and ordered to pay restitution in the amount of $6,672,955.48 by Justice McLeod at the Ontario Court of Justice in Toronto, Ontario, following convictions under the Securities Act (Ontario).
Following an investigation by the OSC’s Joint Serious Offences Team (JSOT), Wallace and Heward were convicted of fraud under the Securities Act. OSC says they were also convicted for illegal distribution and unregistered trading contrary to the Securities Act, for which they both received a sentence of 18 months in jail, concurrent to the four-year fraud sentence.
OSC says Wallace and Heward were the principals in a scheme to distribute shares of Londoni Gold Corp., which they promoted as a gold mine in Tanzania; investors were subject to misrepresentations by Wallace and Heward with respect to the operations, management team, viability and production potential of the mine.
OSC adds Wallace and Heward raised funds from approximately 105 investors. A significant portion of the funds provided by investors to purchase shares in Londoni Gold Corp. were used to support Wallace and Heward’s own personal lifestyles. OSC says Wallace and Heward were not registered to trade securities in Ontario, and that Londoni securities were not qualified by a prospectus and Londoni never made any regulatory filings.
OSC says Wallace and Heward’s scheme raised at least $6,672,955.48. This amount was subject to restitution ordered by the court requiring that the funds be returned to investors.
“This case sends a strong message to individuals engaged in securities fraud and illegal distributions that they will be held accountable for their misconduct,” says Jeff Kehoe, director of enforcement at the OSC. “We will continue to seek prison sentences for individuals who commit crimes like these, which have a devastating impact on the lives of people and their families.”