Okay. I have to handle this one with kid gloves because I am really lousy at reporting financial information and there are a lot of victims here.
Two are high profile in CanadianÂ religious media circles.
Also this case is before the courts in the US.
These are charges and Gordon Driver is innocent until proven guilty.
It appears that Reynold and Ronald Mainse of 100 Huntley Street – a popular religious show in Canada – are victims of an alleged ponzi scheme from a former employer.
The brothers are the sons of the founder of 100 Huntley, David Mainse. Ron Mainse is director of the group of broadcast interests Â Crossroads Christian Communications Inc. (CTS, 100 Huntley Street) and Reynold Mainse is Vice President of Crossroads Missions. Reynold and his wife host the flagship show (100 Huntley Street) once a week, Ron and his wife co-host 100 Huntley.Â Â Â Â Â Â
The only Canadian news report I can find is in The Hamilton Spectator dated May 21st.Â Local Man accused in 14m Ponzi scheme.
Anyone who invests can be a victim of a ponzi scheme, they happen with a dreary regularity. Churches and ministries are not immune, they are fertile grounds for schemes and victims because of the levels of trustÂ faith communities have. The common name for this kind of scheme is called affinity fraud.
It is the Ontario Security Exchange filing that got an eyebrow raised.
The company is Axcess Fund and the OSC issued it’s order on April 15th. Subsequent to the OSC filing, the company was ordered to halt all activity. The Security Exchange Commission and the Commodity Futures Exchange Commission filed suit in May. The Ontario Exchange Commission order extends until October 15, 2009.
The financial aspect of the story is fleshed out at Stockwatch. Over 100 investors from the US and Canada invested in Axcess which promised a weekly return to investorsÂ of 1 to 5%.
Of the $14.1-million the scheme allegedly raised, the SEC says Mr. Driver used $1.1-million for personal expenses and $10.7-million to pay purported returns to investors in Ponzi fashion. He only used $3.7-million to trade futures, and rather than making the substantial profits that he represented to investors, he actually incurred $3.55-million in trading losses, the SEC alleges.
According to the complaint, Mr. Driver initially solicited friends, neighbours and business acquaintances to invest in Axcess. The SEC alleges that his scheme flourished in mid-2007 when he recruited leaders of an Ontario Christian television ministry where he had worked in the 1970s. “Close relatives of the television ministry’s founder invested in Axcess and became finders or ‘point persons’ for Axcess,” the complaint states. The SEC says these finders solicited new investors, mostly friends and family, to participate in the scheme. For their efforts, the finders were allegedly offered a 5-per-cent commission.
Some investors in the scheme received false statements, which purported to show their account balances and returns, the SEC claims. In late February, 2009, Mr. Driver sent 48 investors a statement on Axcess letterhead which showed that their account balances totalled approximately $9.6-million, according to the complaint. “In fact, at the end of December, Driver only had about $276,162 in all of his accounts: $265,388 in his bank accounts and $10,774 in one trading account,” the SEC alleges.
51 year old Gordon Driver spent a few months working for 100 Huntley Street years ago and it appears he used his friendships to develop his scheme which he ran out of Nevada. The reason my eyebrow raised was because the other person named on the OSC filing is David Rutledge.
It is alleged Driver started his scheme in February 2006 and early investors received a 20% return.
There is a software company named Axcess International which has a May 12, 2009 article on software integration. It’s in Texas and deals with RFID technology.
That article came out a few days before the SEC and the CFTC filed against Gordon Driver and his companies. There is another story a few days earlier in MacWorld about Axcess iAccounting. An investors watchblog picked this up up a few days later.
Here is where I’m stumped.
1) How many companies are there named Axcess in the business software business?
2) Now what?Â Gordon Driver is facing five US federal charges, his assets are frozen. I read there was supposed to be a May 22nd court appearance (after the temporary injunction) but IÂ haven’t found anything.
Which brings us back to Canada. There are many David Rutledges, including a race car driver and a scientist.
Need my readers help. I don’t watch 100 Huntley Street but I do know the Rutledge family married into the Mainse family.
Who is David Rutledge? Is he a relative of Ron and Reynold Mainse?
(their mom’s maiden name is Rutledge)
I lose the legal trail on Gordon Driver and his Axcess companies May 15th after the complaints are filed in the US. Can anyone familiar with investments and civil trials tell us where this goes from here?
How much did Ron and Reynold Mainse invest and lose?
Has this been addressed on their TV shows yet?
Does it need to be?
How many Canadian investors are involved and did they all come from the 100 Huntley Street crowd or from churches?
Why has only one Canadian newspaper picked this up?
People have been scammed.Â Â Are millions of dollars and promise of big returns that common in churches and Canadian televangelist familiesÂ this is a none story?
As of June 4th, the only thing I can find is that Ron Mainse and Reynold Mainse were no longer associated with the show.
Which makes this March video by Ron Mainse on economic stress and givingÂ sadly ironic.
If this is the story, a lot of people have been hurt.
There is nothing on Crossroads I can find. Yet.
The Mainse and Rutledge families will have to speak up at some stage, Ron and Reynold are media figures. While investments with Gordon Driver may have only affected the Mainse brothers personal finances, this goes a lot deeper than money.
We don’t knowÂ howÂ thisÂ has impactedÂ Crossroad employees, viewers, friends andÂ other family members.
Crossroads Christian Communications
Crossroads Christian Communications is a 23 million dollar business according to the 2008 Revenue Canada filings. They listed 178 employees in 2008.
I contacted CTS recently regarding a show and got a prompt, courteous and professional response.Â
I’m losing my touch, I’m not understanding why media and blogs haven’t picked up on this.
Posted the statement from 100 Huntley Street’s Jim Cantelon here.
Update: David Rutledge is the cousin ofÂ Ron and ReynoldÂ Mainse and the son of Ralph Rutledge. Thank you readers! Next question. Is this the David Rutledge you are identifying?