Fraud, or bad investment? Edmonton psychotherapist lost $350k in alleged investment scheme, court hears during trial’s closing arguments

A judge is being asked to decide whether a woman who gave hundreds of thousands of dollars to an Edmonton man was defrauded, or simply made a bad investment.

Instead, “her money is gone,” the Crown said in its written arguments.

Court of King’s Bench Justice Shaina Leonard heard closing arguments in the case Tuesday.

Penn, who is in her 60s, came to Canada in 2009 to attend a seminar by John de Ruiter, a self-appointed spiritual leader currently facing charges of sexual assault in an unrelated case. She moved to Canada permanently in 2010 after attending a second de Ruiter seminar.

During that conversation, Penn revealed she had previously given a 400,000 euro loan to a college and had to engage in litigation to get the money back. Cooney then told Penn she knew someone who could help her invest in humanitarian projects, and introduced her to Bayne.

At the time of their February 2013 meeting, Bayne was bankrupt after losing a 2012 lawsuit and owed creditors over $600,000. According to the Crown’s brief, Bayne explained to Penn that he was creating an entity to fund projects in the developing world, giving the example of sustainable housing projects in Africa, without “leaving a heavy debt burden on those who could not afford it.” He allegedly promised Penn a 100 per cent rate of return. Penn testified the money, which she payed in several instalments between 2013 and 2017, would go to an entity called Grace Endowment.

During closing arguments, Bayne’s lawyer, Steven Fix, argued the Crown failed to prove Penn was defrauded. He said Leonard must be convinced Penn “was somehow deceived” in order to convict.

“It’s not about whether this was a good investment, whether a reasonable person in law would make that investment,” he said. He said Bayne still believes his ideas are viable, and that the deal simply fell through.

“For all of the Teslas and Franklins and Wright brothers, there were hundreds who failed with the same ideas,” Fix said. “The difference between a visionary and a dreamer is someone who closes a deal.”

Fix added that even if Bayne took steps to move the money in a way to defeat his creditors, that doesn’t mean Penn was defrauded.

“This was an ill-advised investment that went bad. And that happens to people, unfortunately, all the time,” Hopkins said. “She went into this with her eyes open. She wasn’t misled.”

The Crown, on the other hand, said the evidence proves Penn was defrauded. Julie Snowdon and Aaron Rankin argued Bayne and Cooney took advantage of a lonely, older woman who was a new immigrant to Canada. It said Bayne — who claimed he was attempting to piece together multi-million dollar financial deals and was close to accessing “billions” in assets locked in a safe in New York — was in fact an undischarged bankrupt working as a part-time landscaper.

The Crown claimed Bayne is a “classic conman,” able to “spin a web of obfuscation and mumbo-jumbo, a patter of faux-sophisticated claptrap intended to give him the veneer of a person of knowledge and insight, forever on the cusp of some sort of breakthrough.”

“For a period of four years, they solicited money from her, while assuring her that she would be repaid with significant interest,” the Crown concluded. “There was never any realistic possibility that she would be.”

Leonard will give her decision July 6.