This week, a federal judge in Southern California sided with the United States Futures Trading Commission and handed Driver a whopping bill for his shenanigans: $41.4 million.
U.S. District Court Judge Otis D. Wright, II ordered Driver–who used a majority of the money he stole for a lavish lifestyle that included Las Vegas casino gambling missions–to pay $9.6 million in restitution plus a $31.8 million civil penalty.
Wright isn’t messing around. He expects all of the money to be paid by July 22. I’m guessing the judge is unhappy that Driver continues to show no remorse.
Driver has a home in Freelton Ontario, along with a residence in the Las Vegas area. Many Axcess investors from Canada were drawn into the ponzi scheme by 100 Huntley Street host Ronald Mainse, his brother Reynold and cousin David Rutledge. Ronald Mainse and David Rutledge settled with the Ontario Securities Commission in 2010, after being named as finders for Axcess Automation/Axcess Funds, and were ordered to pay 400 thousand dollars in restitution.
Gordon A. Driver was employed at Crossroads Christian Communications years ago. About 1/3 of investors were drawn into the scheme through Crossroads connections.
To Axcess Automation/Fund Investors: This summary judgement is not criminal. It will take one of the hundred or so who invested with Axcess Automation/Funds to make a call to a US District Attorney and ask for a criminal trial. One of you. It’s been a couple of years, and for many of you I’ve no doubt it’s been a struggle. Gordon Driver can (and according to the CFTC) will probably keep doing what he did. If you want to insure that no one else is harmed, make that call.
US and Canadian regulatory bodies (SEC, CFTC and OSC) don’t pursue criminal action.
The groundwork has been laid, now it is up to an investor or investors to take a step toward justice.
The process is simple. If you are a US investor download and print a copy of the California court judgement, proof you were an investor, head over to the nearest police department and ask for a courtesy report. The police will forward what you’ve given them to the Nevada DA. A US citizen doesn’t need a lawyer.
Does anyone know what a Canadian citizen can do, other than crossing the border and completing the same procedure as a US citizen does?
Update: More from The Hamilton Spectator:
Wright concluded that Driver had enticed people to invest with claims that he had developed proprietary trading software that could help deliver profitable returns ranging from 1 to 5 per cent per week. In some cases, the judge indicated, Driver claimed he could produce monthly returns as high as 43 per cent.
Driver also claimed he obtained profits in seven or eight out of every 10 trades and that he had strategies in place to minimize investors’ risk.
Instead, just a small portion of the pooled funds Driver received were actually traded, according to the judgment.
When he did engage in commodities’ trading, Driver’s efforts were described as “abysmally unprofitable,” the judge said.
Of the $3.7 million in funds Driver traded, he lost approximately $3.5 million – a 94 per cent loss.
The judge noted that Driver used $1.6 million of the money he solicited for gambling in Las Vegas casinos, rent, meals, travel, entertainment, car payments, computer equipment, clothing and cash withdrawals.
“Driver never disclosed his losses to pool participants,” the judge ruled. “Instead, he sent pool participants periodic statements and reports falsely showing profitable returns averaging 5 per cent per week and claimed that he rarely had weekly losses and never had monthly losses.”
The judge has given Driver until Monday to pay the $41 million judgment, although it’s not clear what steps will be taken by the court if the payment remains outstanding.
A spokesperson for the CFTC declined to comment on the judgment or possible sanctions if the amounts aren’t paid.
Driver has been subject to sanctions in the past from both the Ontario Securities Commission and the U.S. Securities and Exchange Commission that date back to 2009.
In an e-mail response to The Spectator, Driver did not respond to several direct questions about the $41-million judgment but instead provided a number of cryptic comments about testimony made by another individual at an OSC hearing in 2011.
Driver claimed to The Spectator that $10 million had been returned to investors before the three regulatory bodies stepped in, that the OSC had proof his custom software was producing annual returns of over 250 per cent, and that an unnamed banker had been prevented from investing $100 million in a hedge fund that could have assisted Driver.
Is the unnamed banker in Goron Driver’s claim, Driver’s brother?
Another confusing and apparently unresolved aspect of is this: what happened with Reynold Mainse and Steven Taylor’s hearing with the OSC in April 2011?
A) Either this matter is still before the OSC or it isn’t.
As someone wisely pointed out knowing the resolution of the Mainse/Taylor OSC hearing affects more than the Mainse family. In 2011 Reynold Mainse was credentialled (ordained) by Open Bible Faith Fellowship. It is doubtful the OBFF would credential Reynold Mainse if the OBFF knew this matter was still before the OSC.
The OSC informed me that resolved matters were posted at the OSC site. To date, results of the April 2011 hearing for Reynold Mainse has not been posted. However this has, in the 2012/2013 section of Proceedings before the Commission :
C) The OSC allegations are serious and to be fair, if Reynold Mainse is not guilty of what was laid out in the statement of allegations August 2010, the OSC has the obligation to say so.
33. Between July 2007 and March 2009, Reynold Mainse’s trading in the Axcess
Automation Investment resulted in investments by about 22 investors of about USD
4,100,000.00. Of this amount, Driver paid back about USD 2,875,054.00 to these
investors, which Driver characterized as returns on investments.
34. Reynold Mainse identified and corresponded with prospective investors and provided
them with copies of the Private Offering Memorandum which described the Axcess Fund
35. Reynold Mainse received commissions directly, and through WCC, of about CAD
If I am reading the OSC information correctly, matters between Reynold Mainse and the OSC have not been completed. Nor have they been completed between the OSC and Gordon Driver.
I’ve written the Open Bible Faith Fellowship, I found them to have acted with integrity in regards to Peter Youngren, and I know getting this information on the status of the Reynold Mainse/OSC hearing so far has taken a lot of digging – the OBFF deserves every opportunity to continue to walk with integrity.
My heartfelt thanks to readers who continue to put Axcess Automation/Fund investors first.