A public relations and crisis advisor for the College Employer Council, David Scott, has a past that includes representing at least one major investor scam that he attempted to delete; and now, as a council representative, he now sits on the other side of the table from the Ontario college faculty union.
The Council is a corporation that is designed to deal fairly with stakeholders and stand independent of the government.
Negotiations fell through between the CEC and the Ontario Public Sector Employees Union that represent college faculty on Oct 16.
Scott represented New Life Capital Corporation as a client for several years, and still had them named as a “select client” on his website as of 2013, while he was also working as a consultant for both the College Compensation and Appointments Council and the Ontario government.
New Life was a Toronto-based investment firm that turned out to be a scam perpetrated by its owners, Canadian married couple Laddy Jeffery Pogachar and Paola Lombardi.
Pochachar and Lombardi ran the scam from 2005 to 2008, when the Ontario Securities Commission filed allegations of fraud against the couple and New Life Capital.
The OSC accused the couple and their company of engaging in “acts, practices, or courses of conducts”.
The commission says “they knew or reasonably ought to have known they perpetrated a fraud on investors.”
New Life Capital and connected companies sold units to over 600 mostly Canadian investors and paid out what they claimed was an 8% annual dividend of $197,570.60.
However, “without any profits or earnings, it was not possible for NLI to declare or pay a legitimate dividend,” said the commission in 2008.
“Payments to shareholders have been, instead, an undisclosed return of capital.”
An investigation carried out by OSC from Jan 1 of 2007 to Jan 31 of the following year found that just short of $700,000 of investor money was paid as loans to the couple Pogachar and Lombardi.
The money was used to start covering a credit card debt of some $900,000 with only $300,000 of the total sum spent on “business purposes”.
The allegations from the commission also say that New Life and its companies made “misleading” or false statements about operations and updates, traded securities without registering, and “distributed the securities with a prospectus.”
The couple had transferred over $6.5 million into a “Lexington Consulting Inc” which they had acquired in August 2005.
Scott worked as a spokesman for the corrupt firm, saying in 2008 that the OSC allegations were based on a “misunderstanding”, according to the National Post.
Scott said New Life had been, and would continue to be professional and compliant with authorities.
“New Life has always worked cooperatively with the OSC and we certainly will in the future to clear up this matter at the earliest possible opportunity,” Scott said, according to the Post.
The Royal Canadian Mounted Police started an investigation in February of 2010 into the allegations and in 2013 charged them with fraud, theft, possession of property obtained by crime and laundering the proceeds of crime in September 2013.
In 2011, the OSC defined the allegations against the couple and ordered them to pay penalties of $750,000 per person, investigation losses of $258,000 and $21.9 million in “disgorgement of ill-gotten gains.”
Scott had New Life listed as a “select client” on the website for his now-defunct business, David Scott Communications, until November of 2013, right next to the logos of the College Compensation and Appointments Council and the Government of Ontario – two other clients of his firm.
Scott’s LinkedIn does also not show his time at the firm working for New Life Capital.
In 2014, the founders of New Life Capital apparently fled for Central America, possibly the Bahamas, with some $7 million in scam profits, according to the RCMP’s financial crimes unit.
David Scott had no comment on the article after a request by the Post. A request for comment was also sent to OPSEU negotiating chair JP Hornick via email.