Charges laid in alleged Ponzi scheme

Rob Antle
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Former mortgage broker shuttered business in '04; police put fraud at $1.9

A former St. John's businessman - whose mortgage brokerage shuttered in 2004 in the wake of hundreds of thousands of dollars in civil judgments and two licence suspensions by provincial regulators - is now facing a raft of fraud charges in relation to an alleged $1.9-million Ponzi scheme.

Sterling Wilson Norman, 52, a resident of Calgary, is facing 53 charges of fraud. Norman was owner of Newfoundland Mortgage Brokers Ltd.

Sterling Wilson Norman is led into court in St. John's Monday. The former owner of Newfoundland Mortgage Brokers Ltd. faces 53 fraud charges. - Photo by Rosie Gillingham/The Telegram

A former St. John's businessman - whose mortgage brokerage shuttered in 2004 in the wake of hundreds of thousands of dollars in civil judgments and two licence suspensions by provincial regulators - is now facing a raft of fraud charges in relation to an alleged $1.9-million Ponzi scheme.

Sterling Wilson Norman, 52, a resident of Calgary, is facing 53 charges of fraud. Norman was owner of Newfoundland Mortgage Brokers Ltd.

Royal Newfoundland Constabulary Const. Paul Davis said police arrested Norman at provincial court in St. John's Friday.

Norman had turned himself in in connection with unrelated charges of uttering threats and making harassing telephone calls against his girlfriend in 2007 and 2008.

He was released on a number of conditions, and will be back in court Feb. 3.

Davis said the RNC fraud investigation is continuing and further charges are expected.

Police began investigating in September 2004, after they received complaints about the activities of a man and woman involved with the company. Davis would not say if additional charges could be laid against more than one person.

The alleged offences took place between February 1998 and October 2004.

The Telegram reported in September 2004 that Newfoundland Mortgage Brokers was the subject of roughly $250,000 in default civil judgments over the previous three months.

The civil judgments related to high-yield loans and promissory notes.

Kent Barrett of St. John's was one of the people who won default judgments in 2004. Barrett's judgments totalled more than $100,000. However, he didn't recoup any of the cash.

Barrett told The Telegram in 2004 that he gave the cash to Newfoundland Mortgage Brokers Ltd. as part of a potential money-making opportunity.

"The explanation that I was given was that it was an opportunity to invest in things like bridge financing for people who need it ... before the bank will talk to them," Barrett told The Telegram in 2004.

According to documents filed at Newfoundland Supreme Court in 2004, Barrett was to earn a 24-per-cent annual return on his investment.

Barrett said in 2004 the mortgage broker paid interest for a while, then stopped. He said the company never paid on the loan principal.

Contacted Monday, Barrett declined comment, saying he did not want to impact the criminal case currently before the courts.

Another five individuals and companies were awarded an additional $150,000 by the courts in 2004 relating to high-yield loans to Newfoundland Mortgage Brokers.

The loans in question promised returns of between 24 per cent and 48 per cent per year, according to court documents.

A further $67,000 in earlier decisions had been sent to the Sheriff's Office for collection, The Telegram reported in 2004.

In October 2004, Sterling Norman appeared in court in relation to yet another civil lawsuit against his company.

Norman told the judge at the time there may not be a paper trail for many of the loans issued by his firm.

He said he didn't sign promissory notes with many of those to whom he issued loans, but just gave them the money.

At a subsequent court appearance, Norman provided the plaintiff with the names of people he said owed money to his firm.

But Norman had little other information on those people, or details on the loans he says his company provided to them.

Newfoundland Mortgage Brokers operated out of an office on Water Street West in St. John's.

By October 2004, the company's office at 685 Water St. was locked, the glass door at the entrance covered by a black tarp.

rantle@thetelegram.com

Organizations: Newfoundland Mortgage Brokers, The Telegram, Newfoundland Constabulary Const.

Geographic location: St. John's, Calgary, Water Street West

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