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Winnipeg Free Press - PRINT EDITION
Scammer deserves 10 years, court told
Adviser bilked investors of $6.3M over nine years
Jack Wladyka
A man who pleaded guilty to running the biggest investment scam by an individual in Manitoba history should get 10 years in prison, say the Crown and defence in a joint recommendation.
Jack Wladyka pleaded guilty Thursday to scamming more than 20 investors -- mainly seniors -- of more than $6.3 million over 81/2 years.
At his sentencing hearing Thursday, Crown Don Melnyk said they are jointly recommending the judge sentence 52-year-old Wladyka to 10 years.
The maximum sentence for fraud increased to 14 years from 10 years in 2004. Wladyka's crimes occurred from 1998 to 2007.
Justice Diana Cameron is expected to determine Wladyka's sentence after the two-day hearing ends today.
Wladyka abused his position of trust as a financial adviser by telling clients he'd invest their money in guaranteed investment certificates or mutual funds and then depositing the victims' money in his own account. He provided bogus statements to his clients, some of whom were friends, showing the status of their non-existent investments.
Wladyka didn't use the money from his elaborate con to fuel a "lavish lifestyle" said Melnyk. He used it to "personally enrich himself" by investing in his own account, paying off his credit cards, line of credit and city taxes. Only $783,000 of the $6.3 million he swindled was recovered, Melnyk said.
Wladyka's crimes were a gross breach of trust, said the Crown, reading excerpts of victim impact statements from people who expected him to invest their money prudently, not plunder their retirement savings.
The biggest con -- and the one that caused Wladyka's house of cards to collapse -- involved an 83-year-old philanthropist taken by Wladyka for $3.3 million.
Before she died in 2009, Rose Rudko testified at a Manitoba Securities Commission investigation into Wladyka's scam about her "year of hell." In 2005, her accountant Mary Wladyka, sister of the accused, suggested she buy GICs from her brother. Rudko gave Jack Wladyka three bank drafts totalling more than $3.3 million, made out to Dundee Wealth, to be invested in a GIC in her name at Steinbach Credit Union. When she contacted the credit union at tax time the next year asking for her T5 slip, she was told there was no GIC there in her name. She later learned Wladyka deposited the drafts into his personal account at the credit union, which he opened under the name Jack Wladyka as Dundee Wealth.
The money was used to secure his personal line of credit. The financial industry watchdog called Wladyka's conduct "egregious." He was fined $100,000 and effectively barred from trading or acting as an officer or director of a company that issues securities to the public.
When other clients of Wladyka heard the news, they filed civil suits and contacted police.
Rudko, too, gave a statement to Winnipeg police. The philanthropist got her money back in an out-of-court settlement and donated more than $2 million to charity before she died. Rudko got her money from the credit union and the company Wladyka had worked for, but not from Wladyka personally.
The other Wladyka victim to take a major financial hit was his golfing buddy, engineer Alan Wingate.
Wingate told the Manitoba Securities Commission hearing earlier he lost his $775,000 retirement nest egg when Wladyka promised to invest the money in a guaranteed investment certificate, then deposited it into his personal account.
"I've got a lot less money, but the biggest issue, for me, is the feeling I don't have a very good judgment of character," Wingate told the financial services watchdog.
Republished from the Winnipeg Free Press print edition May 18, 2012 B3
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