'One of the biggest frauds on P.E.I.': Former investment dealer gets 4 ½ years prison
Frank Dew defrauded insurance and investment clients of more than $2.9M
Disgraced investment dealer Frank Harrison Dew was sentenced to 54 months in federal prison Wednesday in Charlottetown provincial court, for bilking clients out of millions of dollars.
Dew, 50, who ran a business called Morton Dew Ltd., in Charlottetown, had pleaded guilty to 26 counts of fraud.
"This is a major fraud," Crown prosecutor Jeff MacDonald told court. "He used his reputation as an investment advisor to prey upon his victims. Their trust in him was complete and he used that trust to defraud them."
Dew and a co-conspirator defrauded their clients of $2,911,076.64 over a five-year period ending in June 2015, according to an agreed statement of facts between the Crown and Dew.
MacDonald called Dew's actions "nightmarish."
The agreed facts read in court Wednesday revealed details of Dew's actions.
Many of the frauds were linked to sales commissions obtained by Dew from life insurance policies which were then allowed to lapse.
Dew and his co-conspirator created false statements for clients, according to the agreed statement.
Mailing addresses, banking information altered
In some cases, clients' mailing addresses were changed to post office boxes controlled by Morton Dew Ltd., so clients would not see actual statements from financial institutions.
Client banking information was changed to a bank account associated with Morton Dew.
Clients wrote cheques payable to Morton Dew on the understanding that the money would pay for their life insurance policies or investment products, but the funds were not deposited into client accounts.
Alarm bells began ringing in late 2014, when an investment company canceled its agreement with Dew, because of the number of lapsed insurance policies. That investment company contacted P.E.I.'s Consumer, Corporate and Insurance Division, which launched an investigation.
The province identified 33 victims, and handed the case over to Charlottetown police.
'No idea' where the $2.9 million went
Dew declared bankruptcy two years ago.
"We have no idea where the $2.9 million went," MacDonald told court. "There's no other inference than it went to support a lifestyle Dew could not afford."
Court heard that Dew's former clients have received financial compensation from London Life, with whom Dew was affilated. The judge left the door open for a court order to make Dew pay restitution to the insurance company.
'People trusted you with their life savings'
"The emotional impact is actually the more serious aspect — the breach of trust and taking advantage of people who trusted you with their life savings," Judge John Douglas told Dew. "This is the biggest fraud I have seen, and likely one of the biggest frauds on P.E.I."
The dozen or so people in the public gallery of the court included some of his former clients.
Frank Dew declined to speak in court as sentence was handed down.
David H. Cudmore also faces charges.
Cudmore has not yet entered a plea. His case was adjourned today to August 3.
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