When he wasn't running an elaborate Ponzi scheme, Toronto businessman Robert Mander practised Buddhism and became such an ardent follower of the religion he used investor money to donate $500 a month to a local Buddhist organization.
Mr. Mander was found dead at his home in Flamborough, Ont., in March just as frantic investors won a court order putting his financial company, E.M.B Asset Group Inc., into receivership. Investors had handed Mr. Mander $43-million to manage but it appears from court filings he spent much of it on houses, fancy cars, jewellery and artwork.
"It is evident to the receiver that Mander was operating a Ponzi scheme," the receiver, RSM Richter Inc., said in a report filed in court this week.
The receiver added that Mr. Mander also used some investor money to make donations to the Canadian chapter of Soka Gakkai International, or SGI, a Buddhist charitable organization founded in Japan. He donated a total of $320,500 worth of investors' cash to SGI over nearly four years, according to the report.
The receiver has been trying to recover money for investors, mainly by selling Mr. Mander's various assets, and SGI could be ordered to return the donations. The receiver indicated in the report that it is not seeking any relief "at this time" but it does "intend to meet with SGI to attempt to resolve this matter."
Tony Meers, SGI Canada's director general, said the group has co-operated fully with the receiver and will gladly meet to discuss the donations. He declined to say whether SGI would give back the gift. "We can't really speculate until we see what [the receiver]has got to say about it," Mr. Meers said from the group's Toronto office. "It's in their hands."
Mr. Meers said he was aware of Mr. Mander and his contributions, but knew nothing about his business activities. "It's the strangest thing," he said "Even his family members are bewildered by this."
The receiver also plans to investigate the activities of CO Capital, a company connected to Mr. Mander's former business partner, Peter Sbaraglia. Mr. Sbaraglia created CO Capital in 2006 with his wife, Mandy. Mr. Mander was a shareholder and served as its chief portfolio strategist. The receiver alleges Mr. Mander resigned from CO Capital in 2008 and relinquished his ownership stake, for no consideration, but CO Capital remained intertwined with E.M.B. Of the $43-million invested in E.M.B, the receiver alleges Mr. Mander took roughly $17-million and CO Capital received just over $3-million. Other investors lost more than $20-million, the receiver alleges.
Given the "significant amounts paid to CO Capital ... the receiver believes that it is appropriate for it to investigate the business and affairs of CO Capital to determine whether any relief should be sought against CO Capital, including the scope of that relief," the report said.
Mr. Sbaraglia and his lawyer were unavailable for comment.