A St. Albert businessman whose bankruptcy has cost local investors about $14 million told his creditors that he's "sorry" he lost their money.
It was standing room only on Monday at Edmonton's Canada Place as about 70 people piled into a conference room for a creditors' meeting on the bankruptcy of Optam Holdings Inc., a St. Albert-based company owned by city resident Wade Closson.
Many of these people were reportedly close friends or relatives of Closson. Some said they had lost close to a million dollars to Optam and Infinivest – another investment company run by Closson.
Optam filed for bankruptcy on April 2. At the time, it owed $9,675,483 to about 69 creditors, about 18 of which were based in St. Albert. Closson has also declared personal bankruptcy.
In an interview Arthur Waring, the bankruptcy trustee in charge of recovering this money, said that Closson and his companies owe about $14 million to various creditors at this point – about $10 million through Optam and about $4 million through Infinivest.
Money given to Infinivest was apparently turned over to Optam for investment, Waring said. While Infinivest has yet to declare bankruptcy, it did not appear to have money in the bank.
Waring previously told the Gazette that Closson promised investors an 18 per cent return if they gave him money – returns he would earn by giving loans to people who wouldn't ordinarily qualify for them.
While Optam did invest the money in many places, Waring said at the meeting, including a lumber operation in Nicaragua and a pizza restaurant, there's no evidence that the company ever made profit on those investments. Instead, Optam apparently paid out money from new investors to old ones as dividends. "If you got interest (payments), you probably got somebody else's investment."
Creditors at the meeting said that "Optam" was reportedly an acronym for "Other People's Time And Money."
Closson, who appeared nervous and fidgeted throughout the meeting, said he did not intend to deceive anyone with his actions.
"I've written millions of dollars of mortgages that went bad," he said. When asked why he never told anyone the truth, he said, "I believed that I could fix things."
This situation was his responsibility, Closson said. "I'm sorry, guys."
Outraged investors
Closson's apology triggered derisive laughter from many of the creditors. Many accused him of lying to them about the state of their investments up until days before the bankruptcy.
Creditor Cindy Kremp said she was deeply hurt that Closson, a family friend, would "victimize" her family in this way. "That's the part, the deception, that I can't stomach at night," she said, her voice trembling with emotion. "You took our family down with you … you could have destroyed our marriage."
Rick Belleperche, a creditor from Edmonton, said he had lost his entire $370,000 pension to Closson through Infinivest.
"That was 28 years of my life," he said of the lost money. "I'm screwed."
A creditor in an orange coat, who the Gazette will call "André," questioned how Closson thought he could "fix" millions of dollars in losses by soliciting more investments from people like himself. The creditor did not want his real name used out of concern for his family's health.
Those new investments were being used to pay dividends to older investors, he said. "That is, by government standards, a Ponzi scheme."
While the St. Albert RCMP and the Alberta Securities Commission were both reportedly looking into this matter, Bankruptcy Canada's Ken Pawlyna, who chaired the meeting, said that it will be up to the courts to decide if this was a fraud or a Ponzi scheme.
In an interview, André said his family was "very distraught" over what had happened, and would likely have to sell their home because of it. "We've spent a lifetime saving and earning this money," he said. "The kids are going to suffer for it."
He did not believe that Closson's apology was sincere. "He knew what he was doing," he said. "That's not, 'I'm sorry I did wrong.' That's 'I'm sorry I got caught.'"
Belleperche, 65, said in an interview that he would likely have to sell his motorbikes, trailer, house and other possessions to cover his losses. "If he (Closson) knew his company was in jeopardy or in bad shape, he should have given everybody a heads-up."
Belleperche said he held no hopes about recovering any of his investment. "It's just gone."
He told the meeting that he hoped Closson would go to jail for his actions. "I hope he sits in prison for about a million years."
Waring said he could continue his investigation over the coming months.
Questions should go to Waring at 780-424-9944. Waring has also asked any affected creditors to contact the St. Albert RCMP at 780-458-7700.
