Former real estate investment head due in court for fraud sentencing
By COLLIN GALLANT on November 15, 2023.
cgallant@medicinehatnews.com@CollinGallant The head of a real estate investment firm with ties to Medicine Hat is being sought by the courts for sentencing this month, 10 years after he was charged with fraud. One local man who lost $200,000 in investments in the failed enterprise says it’s about time, but he doesn’t think the saga is over until Ron Aitkens is in custody. Aitkens, of Lethbridge, was the head of Foundation Group of Companies that bought land and promised major real estate developments in locations across Alberta, including the proposed Cimarron development in southwest Medicine Hat. After the high-profile bankruptcy in 2013, criminal charges were laid and Alberta Security Commission hearings convened and sanctions followed against Aitkens and another man, former Hatter Roy Juergen Beyer, who promoted the investments in meetings in the city and across Alberta. Following an appeal to the supreme court about the particulars of his trial, Aitkens was found guilty of fraud in 2020 – the penalties for which could be five years in prison and up to $5 million in fines. But, the COVID pandemic’s strain on the courts delayed sentencing, and Aitkens’ matters were adjourned several times since for personal medical reasons. Aitkens is due to appear in court today in Calgary, but was a no-show earlier this month with his lawyer reportedly unaware of his client’s whereabouts. A bench order commands his presence. One local investor who lost money after it was found funds were improperly transferred between companies to cover costs on the heavily mortgaged properties called it “a scam from the start.” “They raised money on pure speculation (in a sector) that they had no knowledge,” said Alan Rose, who gained public notice as a candidate for mayor of Medicine Hat in 2021. The retired power engineer who invests in real estate says he became suspicious of the company’s finances and was prepared to pull his money out, but the foundation moved into a court process that halted creditor action as it attempted to reorganize. He lost $200,000 in the company that left millions in bad debt to thousands of individual investors. “Yeah, it hurt, but it hasn’t hurt my life or lifestyle,” said Rose. “What I don’t like is what happened to all these people who had $5,000 or $10,000 in it – people who really needed that money.” Documents from bankruptcy proceedings list dozens of Hatters and others in the southeast region – Brooks, Lethbridge, Etzikom, Maple Creek – owed sums between $10,00 and $50,000 each after they bought units in the company. One, the “Railside” industrial park, had an unsecured creditors list that runs 41 pages long. It details that about 1,400 individuals in Alberta and British Columbia invested a total of $34.2 million. Similar numbers were reported related to the “Legacy Development,” which only had $11,000 in assets when it wound up. Creditors unsuccessfully launched a class action lawsuit seeking $250 million from the failed company. Specific to Legacy, Aitkens was fined $600,000 by the ASC, required to pay $180,000 in investigation costs and be banned for life from marketing securities. Beyer played a ‘substantially lesser role” according to the ASC judgment, which did not make a finding of fraud against the former Hatter. He was required to pay a total of $95,000 and handed a 10-year securities ban. The Cimarron Development was proposed in the late 2000s by local builder Medican, which sold the property to a foundation subsidiary before Medican’s own court creditors action. Only a small portion of the land was under contract by the companies, that closest to Southridge Drive, and those were transferred back to a mortgage holder to settle a secured debt. The more recent “Coulee Ridge” development is on nearby but separate parcels, which company has told the News. Eventually, Hatview Dairy and Medican (which secured construction bidding rights in the transfer), were paid about five cents on the dollar for their claims. 25-24
