CALGARY – James "Russ" Neilson has been found guilty on fraud charges related to his now-defunct Bow Valley-based business Abaca Solutions.
The former Canmore accountant was originally charged with fraud and theft in 2015 in relation to defrauding about 40 clients of approximately $5.5 million in 2015 with additional charges of uttering a forged document and laundering the proceeds of a crime.
Earlier this year, the Crown proceeded with eight charges of fraud, theft and laundering the proceeds of a crime, with testimony from eight victims during the two-and-a-half week January trial.
On Friday (July 24), Neilson was found guilty of defrauding former investors approximately $2.5 million on all charges, except the theft charges, which the Crown stayed.
“It is my conclusion [that Mr. Neilson] through false representation, defrauded numerous investors,” Court of Queen’s Bench Justice Kristine Eidsvik said Friday during the WebX decision hearing.
The judge spent about three hours reading her written decision via video conference discussing the numerous charges, noting in parts that Neilson himself, who was self-represented during the trial, had admitted he defrauded some investors and that certain financial documents shown to potential investors were “not genuine.”
During the trial, Neilson said while owning the Canmore-based business, he adopted a “hands-off and highly delegated style of management” while Crown prosecutor Steven Johnston said the evidence against the former account was “overwhelming” and referred to the practice as a “Ponzi scheme.”
In January, the judge heard from witnesses called by the Crown, including investors who shared stories of putting more than $180,000 into Neilson's company, Abaca Solutions.
Witnesses explained how Neilson approached former clients, friends, and acquaintances to invest in his new accounting business where labour and services would be contracted to workers in the Philippines, resulting in a more cost-efficient model.
Former investors who testified said they received little to no dividend payments and never received share certificates from the company.
The Crown said they were pleased with the outcome.
“It was bespoke – for each victim, it wasn’t always the same story, but the effect was the same,” Johnston said after the decision was read.
“It was a lot of work for RCMP and victims to come forward, so we are quite pleased with the outcome.”
Neilson’s bail hearing is set for Aug. 5. The former accountant is also expected to be sentenced later this summer.
