Judge Imposes Jail Terms and Fines for Convictions in TAC International Case

TORONTO - Six individuals and two corporations have been sentenced in connection with what the presiding Justice of the Peace called a "giant scam" involving more than US$2 million and 800 investors.

His Worship Justice of the Peace McNish issued the following sentences on January 25, 2002:

 

• Douglas R. Walker, 24 months in jail for nine convictions under the Securities Act;
• David C. Drennan, six months in jail for five convictions under the Securities Act;
• Steven Peck, 90 days in jail for three convictions under the Securities Act;
• Ray Ricks, 90 days in jail for three convictions under the Securities Act;
• Gerald McLeod, a $12,000 fine for six convictions under the Securities Act;
• Al Johnson, a $10,000 fine for five convictions under the Securities Act;
• 1173219 Ontario Limited c.o.b. as TAC (The Alternative Choice), a fine of $1,000,000;
• TAC International Limited, a fine of $1,000,000.

 

Walker, Drennan, Peck, Ricks, Johnson, McLeod, 1173219 Ontario Limited and TAC International Limited received the sentences after being convicted of a number of offences, including:

• trading in securities, namely shares issued by 1173219 Ontario Limited without being registered to trade in such securities contrary to section 25(1) of the Securities Act;
• trading in shares issued by 1173219 without having filed a prospectus contrary to section 53(1) of the Securities Act;
• giving undertakings to potential investors that the shares of 1173219 Ontario Limited would have a higher value in the future with the intention of effecting trades in such securities contrary to section 38(2) of the Securities Act;
• trading in securities, namely memberships of TAC International Limited, without being registered to trade in such securities contrary to section 25(1) of the Securities Act;
• trading in such securities without having filed a prospectus contrary to section 53(1) of the Securities Act;
• giving undertakings to potential investors that memberships at TAC International Limited would have a higher value in the future with the intention of effecting trades in such securities contrary to section 38(2) of the Securities Act.

Between May 15, 1996 and August 15, 1996, 1173219 Ontario Limited raised US$1,338,322.19 from the sale of shares to approximately 500 investors.

Investors were told that the value of shares of 1173219 Ontario Limited would double every six to eight weeks less a 10 per cent commission. Investors were told that this high rate of return was due to the fact that by pooling their funds in 1173219 Ontario Limited, investors could access high yield roll programs which in the past were only available to large international banks. His Worship Justice of the Peace McNish referred to 1173219 Ontario Limited and TAC International Limited as a "giant scam".

Between August 1, 1996 and August 23, 1997, TAC International Limited raised in excess of US$850,000 from at least 300 investors from the sale of memberships. Again, investors were told that investors in TAC International Limited could access high yield roll programs which the Court found did not exist.