This case has been delayed long enough: Judge orders Regina fraud trial to start

\This case has been delayed long enough\: Judge orders Regina fraud trial to start
Long-delayed fraud trial opens for Alena Pastuch
Alena Marie Pastuch leaves Court of Queen's Bench after an appearance in September 2018. TROY FLEECE / Regina Leader-Post

More than eight years ago, the RCMP started to field complaints from people who had invested money in a string of companies headed by a Regina businesswoman named Alena Marie Pastuch.

Those complaints, in April 2010, sparked an RCMP investigation that culminated in criminal charges against Pastuch in June 2014.

Alena Marie Pastuch, 48, gets released from Provincial Court on June 5, 2014, after her arrest on fraud charges. TROY FLEECE / Regina Leader-Post

On Monday, the long-delayed trial got underway when the first witness took the stand, RCMP lead investigator Jason Sauve — then a sergeant and now a staff sergeant — who began to detail each of the hundreds of documents gathered in the case.

“I follow the money,” said Sauve, explaining how he used witness interviews and documents to get a “bigger picture.” He eventually identified about 40 investors.

Sauve formed a theory that Pastuch “promoted an investment to a number of people. Initially, it was to people she knew. And early on, I believe some Ponzi payments were made to those investors early in 2008. And then from there, other investors were invested … and when I looked at where those funds ended up, funds were co-mingled between various accounts, a lot of cash withdrawals, some personal expenses.” For example, some funds went towards the purchase of a house in Regina, he told court.

Asked by Crown prosecutor Dana Brule to clarify the term “Ponzi payment,” Sauve said, “it’s a return received by an investor with no substantive, underlying investment supporting it.”

At the start of Monday’s proceedings, Pastuch, 53, once again pleaded not guilty to each of her three charges: fraud exceeding $5,000, theft exceeding $5,000 and money laundering. She’s accused of misappropriating some $5 million in money from corporate and private investors between April 1, 2006 and Jan. 1, 2013.

Sauve testified the investors believed they had put their money into technology companies focused at varying times on creating anti-fraud and child protection software. He identified six companies involved with investors’ money — Teamworx Productions Ltd., Strikeback Ltd. (which later became Indendego, then Idendego), Cryptguard, Stage Handz Inc. and two numbered, holding companies known as 101114386 Sask. Ltd., and 101115379 Sask. Ltd. Some of the money also flowed through Pastuch’s personal bank account, he said.

At one point, Pastuch interrupted the testimony to object to Sauve’s use of the term “investors,” insisting some transactions were loans, not investments.

Since her arrest, Pastuch had been represented by private counsel, Legal Aid, then two court-appointed lawyers. But last month, Court of Queen’s Bench Justice Richard Elson denied her request for a third court-appointment when her last lawyer quit, leaving Pastuch to represent herself at trial. At her request, Elson allowed Pastuch to have Brian Pederson, formerly the chief technology officer in her company, to assist her.

Formerly chief technology officer in her companies, Brian Pederson is assisting Alena Pastuch with her defence. Hes pictured here in 2013 when he also assisted her with legal matters. TROY FLEECE / Regina Leader-Post

Prior to Sauve taking the witness stand, Pastuch spent the morning arguing why, before any evidence is called, the judge should first consider her application to compel disclosure of certain documents which she says are necessary to her defence.

“These records will show the errors and omissions and inaccuracies,” Pastuch argued, adding that they are key to her “defence strategy.” Among those documents, Pastuch contends some are held by the Financial and Consumer Affairs Authority (FCAA), gathered in the course of a separate but related securities investigation.

Elson explained that Pastuch must not only show the documents actually exist  — an FCAA lawyer has told the court it doesn’t have them — but also that they are relevant in this criminal case.

The judge said he has “deliberately shut my ears and eyes” to the regulatory proceedings and any findings made (Pastuch was convicted of Securities Act offences and is now awaiting the outcome of an appeal).

The FCAA paperwork aside, Brule said some of the other documents Pastuch seeks from the Crown aren’t even in its possession. But Pastuch, citing case law, suggested the RCMP should have been compelled to gather documents, even if the Crown didn’t require them.

For example, referencing the trial of Jian Ghomeshi, the former CBC radio show host, Pastuch said she too would like text messages and emails potentially exchanged between complainants, suggesting they may have been colluding at the behest of FCAA investigators.

“There’s a duty to inquire (by the Crown),” said Pastuch. “I’m not on a fishing trip.”

In the end, Elson decided to table the application until he has heard at least some of the evidence to provide context. However, Elson said he’d allow witnesses to be recalled if documents are subsequently admitted into evidence.

Sauve is expected to spend at least a week on the witness stand. The trial is scheduled for about three months.

Alena Pastuch was charged in 2014 with fraud, theft and laundering the proceeds of crime. She is accused of defrauding investors in Western Canada of nearly $5 million over a span of seven years.

Police began an investigation into Pastuch and her business dealings in 2010 after three separate investors filed complaints against her.

Crown prosecutor Dana Brule called his first witness on Monday afternoon. RCMP Staff Sgt. Jason Sauve was part of the commercial crimes unit between 2006 and 2014. 

Sauve said his investigation started on Apr. 27, 2010 when three separate complaints came in from people claiming their were victims of Pastuch.

Sauve told the court that by the end of his investigation in 2014, more than 40 people had invested with Pastuch or her associated companies.

Sauve said the complainants believed they were investing in tech companies promoted by Pastuch, including computer security, anti-spam and online child protection. He said one investor made an $85,000 investment in a computer security company known as Crypt Guard in January 2007.

The officer went through a number of documents showing incorporated companies with Pastuch as either the director or president ranging from 2006 to 2010.

Pastuch made an application to the judge Monday for third party records to be produced for use in the trial proceedings.

Pastuch said she did want to proceed until the application was decided by the judge. She said the documents would show, "errors and omissions."

Justice Richard Elson did not dismiss the request. He said he would postpone a decision, as he wanted to hear the evidence first.

"I have deliberately shut my eyes and ears to the facts of this case," Elson said, noting he has "zero" present knowledge of the case.

"Everything in the crown's possession has been turned over to Ms. Pastuch," Brule said.

"This case has been delayed long enough. I think this trial has to proceed and it has to proceed today," Elson said.

Requests for new lawyer and publication ban denied in Sept.In September, Pastuch requested what would have been her fourth court-appointed lawyer since proceedings began. Her most recent lawyer, Cory Wilson, withdrew from proceedings September 10, which was the day the trial was supposed to begin. He advised the court that there had been an irreparable breakdown in their relationship.

The Crown said that if the court were to grant her another lawyer, there would likely be problems with that one as well.  

At the same court appearance in September, Pastuch requested that the trial be conducted under a publication ban. She said that news coverage of court proceedings up to that point had been detrimental to her reputation. That request was also denied.

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