On Wednesday, a former investment dealer based in PEI was sentenced to 54 months in federal prison for cheating clients out of millions of dollars.
Frank Harrison Dew, the 50-year-old owner of Morton Dew Ltd., pleaded guilty to 26 counts of fraud in Charlottetown Provincial Court. Investigations identified 33 victims of Dew’s fraudulent activity.
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“This is a major fraud,” Crown Prosecutor Jeff MacDonald told the 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.”
According to an agreed statement of facts between the Court and Dew, the latter and co-conspirator David H. Cudmore defrauded their clients of $2,911,076.64 over a five-year period ending in June 2015.
Many of the frauds perpetrated were associated with 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. In certain cases, the mailing addresses of clients were also changed to post office boxes operated by Morton Dew to prevent clients from seeing actual statements from financial institutions.
Client banking information was also changed to a bank account associated with the company. Customers of Morton Dew who wrote cheques to pay for their life insurance or investment products were unaware that the funds were not being deposited into their accounts.
The scheme went unnoticed until 2014, when an investment company canceled its agreement with Dew after it became aware of a number of lapsed insurance policies. The company eventually contacted PEI’s Consumer, Corporate and Insurance Division, which later launched an investigation. Dew later declared bankruptcy just two years ago, which was met with suspicion.
“We have no idea where the $2.9 million went,” MacDonald told the court. “There’s no other inference than it went to support a lifestyle Dew could not afford.”
It was announced in court that Dew’s former clients whom he had victimized have received financial compensation from London Life, the insurance company Dew was affiliated with.
CBC reported that Cudmore also faces charges, but has not yet entered a plea. His case was adjourned until August 03.
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