Head of charitable foundation ordered to pay nearly $434K for orchestrating Bolivian bank investment scheme

A Manitoba Securities Commission panel has ordered the head of a charitable foundation to pay close to $434,000 in fines and repayments after he misled two charities and a couple into investing in a Bolivian financial institution.

Earlier this year, the commission found Jack Neufeld of The Jack Neufeld Family Charitable Foundation had violated several sections of the Securities Act between 2005 and 2010 when he convinced investors to put money into a Bolivian mortgage lender

The financial institution was a savings and loan organization that was under financial pressures at the time and was looking for financing. 

The investors were private individuals, who invested close to $772,000, and two charities: Youth for Christ’s Portage la Prairie branch, which put in $120,000, and Back to the Bible, which invested $250,000 in the deal.

Calgary businessman Jack Neufeld violated the Manitoba Security Commission Act after soliciting investments for a Bolivian bank deal.
Businessman Jack Neufeld violated the Manitoba Securities Act after soliciting investments for a Bolivian bank deal. (samaritanspurse.ca)

Neufeld travelled in the same Christian circles as his victims, which allowed him to gain their trust, according to the commission’s Jan. 4 decision. 

The commission found that Neufeld misled investors over several years, providing them with “voluminous” oral and written communications that provided incorrect information while withholding relevant information. 

For example, one of the investors testified to the panel that she and her husband received a letter in 2006 saying that they could expect interest payments soon, but she never received any. 

Another letter from 2007 stated that Neufeld and his foundation were being pressured by promoters of the Bolivian deal to fund a secret $6 million “illegal payment” in order to “defraud a public institution,” and that their refusal to do so resulted in various threats. 

Neufeld produced no evidence to support these statements at the hearing, according to the panel. 

The panel concluded that Neufeld and his foundation made no attempt to compensate these investors.

In the panel’s Tuesday decision, he was ordered to pay Youth for Christ $123,000 and $250,000 to one of the private citizens who had invested, plus $35,000 to the commission for costs and an administrative fee of $25,000. 

The former chairperson of the other charity, Back to Bible, had also submitted a financial loss claim with the commission, but the panel found he wasn’t entitled to it because Neufeld didn’t “entice” him to invest and wasn’t responsible for his losses. 

Neufeld is also banned from being an officer/director of an issuer, meaning any organization that deals with securities, for at least 10 years or until he’s paid all of the penalties.

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