Axcess Automation/Fund updates – Gordon Driver arrested, Reynold Mainse facing OSC ruling in November. Acted contrary to the public interest

I’ve fallen behind a bit in updating the Axcess Automation/Funds saga. A lot has happened lately, with a couple of the key players in the ponzi scheme which saw investors lose millions.

The Ontario Securities Commission has put up “Reasons and Decisions”, the findings of a hearing held in April 2011 involving Reynold Mainse, Steven Taylor and Gordon Driver.

Former 100 Huntley Street host Reynold Mainse has acknowledged violating sections of The Ontario Securities Act (OSA) and being a point man in the Axcess scheme. Mainse and his now defunct company World Class Communications Inc. were found to have traded securities without a licence. The OSC determined (as they had with his brother Ron Mainse and cousin David Rutledge) that he was not party to the fraud.

The Hamilton Spectator:

The OSC ruled that he had improperly traded securities without being registered, by recruiting more than a dozen family and friends to participate in Driver’s scheme.

Ron Mainse, Reynold’s brother, and their cousin, David Rutledge, were ordered to pay a combined total of nearly $450,000 in restitution and penalties to the OSC in August 2010 for similar roles as recruiters.

The OSC has described Reynold Mainse, Ron Mainse and Rutledge as unwitting dupes who didn’t perpetrate any fraud themselves.

Driver had been a longtime family friend.

“I feel absolutely sick about it,” said Reynold Mainse. “It’s just a huge, unfortunate situation for me and my family.”

Mainse said he attracted five family members and 10 friends to invest in what he thought was “a great opportunity, which obviously wasn’t,” he said.

“I’ve apologized to them,” Mainse said. “They’re still my family, they’re still my friends.”

Reynold Mainse will be back before the OSC November 7th.  He now runs a photography business out of the Hamilton area.

Pertinent paragraphs in the OSC decision regarding Reynold Mainse.

[11] Reynold and WCC, who were represented by counsel, admitted all of the allegations relevant to them. As Reynold admitted the allegations against him in this matter and was not contesting the evidence presented by Staff, he and his counsel only attended certain portions of the hearing. Reynold appeared on April 11, 15, 19 and 20, 2011, and his counsel appeared on April 11, 13, 15, 19 and 20, 2011.

[23] WCC was incorporated in Ontario in September 1998. According to Reynold, he stopped doing business through WCC in 2000 or 2001, but later re-activated WCC which
contracted with a Christian non-profit charitable organization to lead and promote international humanitarian aid missions. In December 2008, WCC’s registration was cancelled for failure to comply with the Corporations Tax Act, R.S.O. 1990, c. C.40, as amended.

The OSC states that Reynold Mainse was the sole director of World Class Communications Inc. Pages 14 to 17 outline the allegations Mainse admitted to.

[83] Reynold, who was interviewed voluntarily by Staff and voluntarily provided Staff with documents relating to the Axcess Investments, made admissions on the first day of the hearing on the merits. His counsel explained that, but for Reynold’s personal financial situation, he would have settled with the Commission. His counsel further explained that Reynold does not have the means to disgorge to the Commission the funds he received through his and WCC’s involvement in the Axcess Investments given the nature of his career and the dedication of his time and resources, including the money that he received from Driver, to Christian not-for-profit charitable organizations. As a result, he elected to participate in the the  hearing on the merits and testified to provide a full factual record to the Commission.

[127] From July 2007 to the end of 2008, Reynold acted as a point person between Driver and investors who were identified by Reynold at the hearing as being his family and friends. The Reynold Group, comprised  of 23 people, invested a total of US$4,131,400.96 and subsequently received  payments from Driver totaling US$2,875,054.87.

[158] The evidence shows that Driver had occasionally met or directly communicated with investors about the Axcess Investments. Ronald and Rutledge gave consistent and
credible testimony that they facilitated meetings between small groups of investors and Driver. According to Ronald, two such meetings took place in Burlington, the first in early to mid-July 2007 and, the second, at Ronald’s home in late July 2007. Rutledge testified that he arranged for investors to meet Driver at Ronald’s house in July 2007 and in Las Vegas in February 2009 and personally attended these meetings. Reynold also
testified that he arranged meetings between Driver and investors and that he attended some of these meetings.

[162] For example, Rutledge and Ronald understood that they would receive 5% of “[Driver’s] company’s growth” as commissions which were to be shared between them
(Hearing Transcript dated April 15, 2011 at p. 44). Reynold also understood that he would be paid “five percent of the money that [he brought] to [Driver]” (Hearing Transcript dated April 19, 2011 at p. 125). More specifically, Reynold explained that the
commissions would be 5% of the trading profits that Driver retained, or 3.75% of the total profits generated by Driver’s trading activities.

[163] We accept Staff’s flow of funds analysis which shows that both Taylor and Reynold received funds from Driver. Driver transferred US$1,430,216 to Taylor and the Taylor Companies, and $210,219.50 to Reynold and WCC. Although Reynold testified that there was no clear distinction as to whether the funds he received were a return on his investment or commissions, we find that Taylor and Reynold received payments as a result of acting as point persons for Driver.

Page 40, 41 and 42 [200-212]  lay out the details of Reynold Mainse activity and involvement.

[211] Staff’s flow of funds analysis shows that Reynold received a total of $210,219.50 from Driver, of which $9,987 was received by Reynold personally and $200,232.50 was received through an account in the name of WCC.

[212] Based on Reynold’s admissions and evidence described above, we find that Reynold and WCC engaged in trades and acts in furtherance of trades within the meaning
of the OSA in relation to both the Axcess Automation Investment and the Axcess Fund Investment.

While Ronald and Reynold Mainse made it publicly clear they were victims of this scam,  as point people were also victimizers. Neither brother is facing, or will face criminal charges. They remained ordained ministers in Ontario through out this investigation, despite the fact it was then alleged they violated an Act of the Ontario Legislature (OSA),and a federal Act (CFA).  I posted about Reynold Mainse ministerial credentials previously, which he holds because of the good graces and trust of the Ontario government. (** important update at the end of this post – please read – BD)

How much did this OSC investigation cost taxpayers? Why do Christians not hold their own accountable for acting contrary to the public interest? Who is Reynold Mainse accountable to as an ordained minister if not taxpayers and the body authorized to ordain him?  How is breaking regulatory law different than breaking criminal law, and why does his leadership turn a blind eye?

I understand that paying restitution is a hardship – a consequence of roping family and friends into a scam. I understand both brothers suffered public shame being yanked off 100 Huntley Street for a few months.  Ron was allowed back on-air, appointed Spiritual Director of the Crossroads Family of Ministries and Executive Director of 100 Huntley Street.  Reynold Mainse started his own company. Unlike his two defendants before the OSC, Reynold Mainse had competent legal representation. The point is, the 252 investors who have never spoken publicly, wsome of who placed their trust in the Mainse brothers face considerable hardship also.

I have no idea if Reynold Mainse does contract work for the charity his dad founded. I remain troubled that neither brother faced suspension of their ordination during the OSC investigation. Is breaching a provincial Act no big deal to Christian leaders?

[301] We also find that Reynold authorized, permitted or acquiesced in WCC’s contraventions of subsections 25(1)(a) and 53(1) of the OSA and is, therefore, responsible for such contraventions pursuant to section 129.2 of the OSA.

[308] The conduct of the Respondents undermined the integrity of and confidence in the
capital markets, which we find to be contrary to the public interest.

Section V of the document lays out how the scam unfolded and how the point people and their investors got sucked in.  My grandmother used to say, if it sounds to good to be true, it probably is. The returns on investments promised (and in some cases received) makes shows the read in hindsight, the blinding effect of greed.

Both brothers wanted some of the money they made to go to ministries. In the OSC document it was suggested that Axcess investors donate their returns to ministries of choice.

In July of 2009, the board of Crossroads Christian Communications made it clear that a forensic audit had determined no donor funds had gone into the Axcess scam. Back in that 2009 post I wondered which ministries were recipients of the monies the brothers and cousin made. Did Crossroads receive donations from the brothers ill-gotten gains?

Reynold Mainse remains on the board of Heaven’s Rehearsal, a registered charity described as a ‘missionary organization, evangelism’, which produced an extravagant concert at the Rogers Centre in  2007, with grand plans to hold a similar show in the future in Africa. He took over Heaven’s Rehearsal from Norm MacLaren, a former 100 Huntley Street host.  According to the 2011 T3010,  Heaven’s Rehearsal is making a bit of money from product sales and donations, and is in a deficit position.

I’d hardly call a concert a “Christian non-profit charitable organization to lead and promote international humanitarian aid missions [23], which is why I wonder if the brothers donated money to ministries and if they did, where it went.

Reynold Mainse and his cousin David Rutledge are pleading financial hardship in regards to  restitution and penalties required by the OSC. November 7th, Reynold Mainse will find out how much more financial hardship he’ll face.

Gordon Driver, already looking at a 41 million dollar civil judgement in the US, was arrested in Las Vegas October 9th. He made bond and was ordered to appear for arraignment in a Los Angeles court this past Wednesday. Ponzitracker:

 Gordon Driver, 54, was arrested October 9th and charged with two counts of mail fraud, nine counts of wire fraud, two counts of commodity pool operator fraud, and three counts of making false statements to the Securities and Exchange Commission.  If convicted of all charges, he faces up to 275 years in federal prison.

…Despite being successfully prosecuted by civil regulatory authorities for masterminding a massive Ponzi scheme, any intervention by criminal authorities remained conspicuously absent.  In a Forbes article I authored earlier this summer pondering this same question, I noted that “while the CFTC outlined allegations in its complaint that could form the basis of mail and/or wire fraud, the five-year statute of limitations continues to tick.” Among the criminal charges Driver now faces are two counts of wire fraud and nine counts of mail fraud.

Also noteworthy is the decision to charge Driver with three counts of making false statements to the Securities and Exchange Commission.  Authorities rarely bring this charge against those accused of Ponzi schemes, with the only known exception to be Laura Pendergast-Holt, the former chief investment officer under Allen Stanford’s massive $7 billion Ponzi scheme who received a three-year prison sentence after pleading guilty to obstructing an SEC investigation.  Driver was presumably charged under 18 U.S.C. 1001, which forbids making any false or fraudulent statement in “any matter within the jurisdiction of the executive, legislative, or judicial branch” of the U.S. government.  Each charge carries a maximum sentence of up to five years in federal prison.

United States Attorney’s Office Central District of California

Update: God is in the details, and I want to commend OBFF. In a world where Christian ministries often fall short of ideals, we need to see ministries operate openly, with integrity and walk in the grace of God. OBFF:

Approximately four months ago we conducted further investigations concerning Reynold Mainse and decided to suspend the ministerial credentials Reverend Mainse held with Open Bible Faith Fellowship until the matter regarding the O.S.C. and Reverend Mainse is resolved.

 

About Bene Diction

Have courage for the great sorrows, And patience for the small ones. And when you have laboriously accomplished your tasks, go to sleep in peace. God is awake.
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26 Responses to Axcess Automation/Fund updates – Gordon Driver arrested, Reynold Mainse facing OSC ruling in November. Acted contrary to the public interest

  1. inquirer says:

    Does his bail bond in the USA include any foreign (Canada) appearances as before the OSC in Toronto?

  2. Missing Facts says:

    The OSC says there was 15M collected. 3M lost on the market and 10M returned to the investors. How do you get a 9M loss?

    Look at the submissions from Driver. Looks like a third element that was extorting and blackmailing Mr. Driver.

    1. Driver’s Submissions

    [70] In his oral submissions, Driver took issue with Staff’s investigation. He submitted that many Canadian investors were not interviewed by Staff. Further, he submitted that Staff refused to accept statements that he produced which show that one of his trading accounts generated at least 68% profit in three months, and that Staff had tampered with the evidence to create the appearance that his trading activities resulted in a loss. He argued that “the public interest is not being protected because the OSC has not done a complete job with their investigation” (Hearing Transcript dated May 25, 2011 at p. 78).

    [71] Driver also submitted that he was not aware that ICS was a corporation of 50 investors and that he “was liable to see through to all their additional investors” (Hearing Transcript dated May 25, 2011 at p. 77).

    [72] It was Driver’s submission that Taylor misappropriated $400,000 of investor funds and that he never received those funds from investors. He also submitted that Taylor and R.M., Taylor’s business partner and a witness called by Driver, threatened to go to law enforcement authorities unless he paid them a large sum of money.

    [73] Driver submitted that he was “anxious to protect the innocent investors” and that his “intent was to provide this protection under a regulated hedge fund and get rid of the greed” (Hearing Transcript dated May 25, 2011 at p. 78). He submitted that he had “no desire for personal gain until all this was sorted out” (Hearing Transcript dated May 25, 2011 at p. 78).

    http://www.osc.gov.on.ca/documents/en/Proceedings-RAD/rad_20120927_axcess.pdf

  3. Bene Diction says:

    Good question inquirer, I don’t know. He has not shown up for any OSC proceedings, and if you look at pages 4-9 in the report, you’ll see the agent who represented him, hadn’t been retained. His adjournment requests are consistent with patterns of behavior with the CFTC, SEC and California District Court.

    You could ask him yourself – Missing Facts is posting from the Los Vegas area – same internet service provider and range as Gordons previous IPs.

  4. Bene Diction says:

    Hi Gordon:

    Yeah, I read that.
    What happened with the LA arraignment?

    And while I have your attention what is going on with Ascend Charts?

  5. Missing Facts says:

    BD if you read everything, you would also know that there was a banker offering $100 million dollars to start the hedge fund based on verified broker statements of over 270% annual return. The hedge fund was to be audited and managed by a third party. If it wasn’t for the extortion, then the original investors would have profited nicely. Ponzi schemes don’t have a profitable solution. Also, who is “R.M.”? The business partner of Steve Taylor of ICS. Why isn’t the OSC prosecuting him? Why are they protecting him with just using his initials? He testified and admitted to all of the elements of extortion at the hearing on May 25, 2011. He received $600,000 for himself as well as his partner, Steve Taylor, received 1.4 million.

  6. Bene Diction says:

    I read that. Any banker who gets involved with unlicenced and unregulated trading isn’t going to be a banker very long.

    Point is, the banker didn’t, and I figure he still has a job.

    I heard your brother is a banker. Is that true?

  7. Bene Diction says:

    How do you know that R.M. isn’t facing the OSC?

  8. Missing Facts says:

    BD the hedge fund was licensed and regulated. R.M. happened a year and a half ago and the OSC just released their report disguising his name.

  9. David says:

    You stated that Gordon was “arrested”… but I don’t see any evidence of that anywhere on the Net. I went to the Hamilton Spectator and it says he is “facing charges.” Big difference there…and would appreciate if you can provide the reason why you wrote that.

    Too…I don’t understand your bloodlust for the Mainses. They admitted their guilt. They said they were dupes. The regulatory boards looking into these things do not see it as any more than that… and yet you also want them to pay for their “sins” as invalidating their ability to be spiritual leaders?

    What sense does this make?

    They made a mistake. They said so. They agree. That is called owning up and taking responsibility. Isn’t that the mark of a good spiritual leader, to take responsibility? You need to rub their nose in it too by forever banning them from ministry…because they made a bad choice and trusted a friend?

    Why do you keep beating this drum?

    dave

  10. Missing Facts says:

    The banker was Asian according to the transcript.

  11. Bene Diction says:

    Hi David:

    http://tinyurl.com/8b9mt6o

    http://tinyurl.com/8tj35dw

    http://tinyurl.com/9uyx3oa

    And the arrest is linked in the post: http://www.justice.gov/usao/cac/Pressroom/2012/148.html

    “Too…I don’t understand your bloodlust for the Mainses”

    I don’t understand the lack of concern for victims.
    (Other than Jim Cantelon’s asides in the Ron Mainse interview)

    I don’t disagree with your summary – yes, they were dupes.
    Dupes in a position of public trust, working for a charity, in a position of power, in an organizational structure which did not have checks and balances in place.

  12. David says:

    Your compassion for the “victims” does not require retribution against the Mainses.

    People that invest do so with all of the information given to them. Since the Mainses did not know this was anything but an aboveboard way to make money and a possibly great investment, what are they guilty of…passing along information in the hopes that their friends could benefit?

    Your characterization of the investors as “victims,” should not sit well with anyone. … because the Mainses were victims as well. They were ALL victims of other parties. If there is evidence to the contrary, that the Mainses knew that this was a fraud, then that is a different story.

    As to having compassion for people who knowingly took a chance on a potential investment…please. I am in this group. I am no victim. I went in after I knew everything about this…and took a chance. I take responsibility for my own actions.

    Your last sentence…so, if the boards of the public trusts, charities and family/friends are not crying for their heads…the question still remains. Why do you keep calling for these guys heads?

    The masterminds of this thing are being taken to task.

    You need to stop seeing the Mainses as perps. They too are victims.

    d

  13. brano says:

    If you do the crime,you do the time!-PERIOD

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  15. Julian says:

    To David,

    You state that the Mainses are victims? Hmmm… lets think this through. The Mainses were still were significant contributors to this grievous matter. I am almost fully certain think that Reynold and Ron were not really that penitent over this whole fiasco. And also to you David, I highly doubt you have ever worked and experienced what it is like to work for senior people that oversee a televangelist organization. You do not truly know the dynamics of how some of these senior people in these organizations mistreat many of their employees. I know first hand and it is atrocious in a multitude of ways and I can speak for many.

    Let all the victims that were swindled whether it was a small or large financial sum divulge to the public about their losses and the emotional grief they experienced. Now here is a story for the producers of W-5 or the Fifth Estate investigative programs to broadcast on Canadian television.

    Remember most leaders or people at the top in televangelist organizations are highly dishonest characters anyways. Televangelist organizations have been scandalized for many years and yet a gullible segment of the public and christians that get duped by these organizations still support many of these television preachers.

    I was a former employee at the Crossroads organization and I along with many other employees from years past experienced some significant breaches in several ways along with bullying committed by some of Crossroads senior personnel. That is a understatement to say the least.

    The public and business entities must take note and wake up and stop financially supporting Crossroads and its commercial broadcast wing of CTS.

  16. David says:

    Julian…

    Well, even though you “highly doubt” that I know of what you speak, I can assure you that I could make your head spin on this subject. I worked for evangelistic Christian ministries and had access to some of the bigger names in that world during my tenure. I found it a distasteful world for many of the reasons of which you are complaining about, and took my leave without ever regretting kissing that world goodbye.

    But because that world functions a certain way doesn’t change the facts here. The Mainses are not the perpetrators. They are also victims. No matter how poorly that world functions, the people asked to invest were not duped by the Mainses. They didn’t know it was a fraudulent investment scheme. They have been cleared of that by government agencies.

    So, my statements had to do with Benny D. and his crusade to want to further rub these guys’ nose in it by making this unfortunate incident a place where their ministerial credentials are now taken away. I don’t see any misconduct on their part that suggests this. Being duped by a charlatan does not make you guilty of moral misconduct. You want to call them dumb or naive or irresponsible…sure.

    But they aren’t the perps here. Stay focused on who is to blame. And it is not them. It is Gordon Driver and his minions.

    By the way…you mentioned this being a story worthy of W5 or the Fifth Estate… does anyone know if there is a listing of the investors who got swindled…or a group that has met … or any information of the like? I know someone who might be interested in doing this story as a documentary.

  17. Peter says:

    I knew this guy, or thought that I did. I’m still trying to wrap my head around all the things I thought I knew about Gordon Driver, and all the allegations that have come against him. I don’t think he knows who he is, or what he did or did not do. I believe that Gordon sees himself as smarter, better and above others, and the web of lies he’s spun has consumed him. It’s sad to me, really, because what he stood for, or claimed to stand for, is no more real to him than the Great Oz behind the curtain. The more I learn about the case against him, the less I know Gordon Driver and the persona he created.

  18. FCJ says:

    The Mainses received a five percent commission on every dollar that they helped bring in to this scam.

    Don’t you think that by taking this commission that they were participants first. And victims second?

  19. Julian says:

    To David:

    A long overdue comment on this particular thread and special attention to you David. I do not who you are David and you say that you worked for evangelistic Christian ministries. My comments to you and others that read this, I actually worked at Crossroads and I know of some of the senior staff that were corrupt on a number of issues in the Crossroads ministry which profoundly affected many innocent people. There are serious unethical issues that are linked to David Mainse and his family that should be addressed that you are not aware of that date back years before and how corrupt practices were performed by some of Crossroads senior staff. Cover ups and protecting people that were offenders of serious offences at the expense of innocent employees that were affected in life and health issues including significant financial loss.

    I will use an actual name here of a senior Crossroads staff member that is a shame and an anathema to christian leadership and his name is Byron. Here is a man who is a classic manipulator and cheated employees in ways that were a total breach of labor laws. He protected employees and certain management personnel that should of been terminated like (real first names) Andy and Lorne. These are actual Crossroads personnel that were protected and these two should of been prosecuted by the full course of the law. This is just the tip of the iceberg. The corruption and mismanagement is prolific at Crossroads and our Canadian government should conduct a full fledged investigation of Crossroads, it is long overdue. There are ex-employees of Crossroads and their families in years past that were profoundly affected and damaged in many ways.
    Crossroads started many years a go with good intent but gradually became tainted with corruption and deceit. Shall I state more! When will the public fully open up their eyes and stop supporting ministries and organizations that have deceptive and corrupt business practices.

  20. Julian says:

    To David….

    Another matter to add to your comments about the Mainse family. You think that the Mainses are not culpable and are victims of this Ponzi fiasco. If you were an employee at Crossroads like I was once, you would better understand of the abuses of power committed by some of Crossroads senior staff and the intimidation and threats that were happening towards employees. In years past David Mainse has been addressed about these matters and he is notorious for evading these issues.

    Reverend Mainse has developed a seared conscious. What do you do when someone like Rev. Mainse who once started a ministry that started off with good intentions and now the ministry and levels of its leadership is so tainted with a spirit of deceit and harming innocent people!!

  21. Julian says:

    David…

    As a further comment as well, When a former employee of Crossroads like me had to endure mistreatment by some of the senior management and a very abusive supervisor (Andy) where my life and health were critically threatened, it is something an employee and a family does not forget. Rev. Mainse would not deal with this matter due to the problem that David Mainse does not want to acknowledge that such abuses actually occurs in Crossroads. Being evasive as he was and still is makes Crossroads even more suspect of its unsavory leadership.

  22. Marina says:

    “The Mainses are not the perpetrators. They are also victims.” – David

    “Christians ripping off” other “undiscerning Christians”. Does anyone see the incongruity of terms here? The Mainses are supposedly shepherds. If THEY become victims, what the hell chance do the sheep have?!

    Boo hoo. The poor Mainses. Boo hoo. NOT.

  23. Bene Diction says:

    Hi David:

    Las Vegas Sun October 24, 2012 Federal authorities accuse Henderson businessman of bilking investors

    http://tinyurl.com/8b9mt6o

    If you go to the OSC site on May 31st to the Respondents Delinquent in Payment of Commission Orders page, you’ll see that amount paid by Reynold Mainse will be $000.000.00. The delinquent list was updated in April, but doesn’t go up online until the end of May. Amount owing: $247,719.50. He is a director of a charity, ordained again, since when is that behavior part of spiritual leadership? Do you really think anyone in Canada will know or will kept track of any money raised in Africa?

    Does he get a pass because of who his father knows?

    I have no information on whether Gordon Drivers trial went ahead or was delayed again. He is your friend, call him up, he isn’t communicating with me these days.

    Ron Mainse paid his debt (or someone paid it for him). Whatever, it’s paid, couldn’t care less what he does.

  24. Missing Facts says:

    Why did the OSC not charge Ryan Mitchell? According to the OSC accounting he received $600,000 of ill-gotten gains and was Steve Taylor’s partner. The OSC goes after the Mainses but leaves Ryan Mitchell alone? It smells.

  25. Bene D says:

    The OSC held Taylor accountable. If you know someone involved with the Taylor Group, perhaps you could ask them. Perhaps a deal was cut for testimony?
    Did Taylor and Mitchell hang out with the Mainse brothers and David Rutledge?

  26. Missing Facts says:

    OSC docs only show the Mitchell was ordered to appear by the court at the request of Driver. Driver had Mitchell confirm extortion emails. Why would the OSC let Mitchell keep $600,000 of investor money?

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