The former chief executive officer of Onco Petroleum Inc. – who hid the fact that he was a former Hells Angels associate with a long criminal record − was sentenced to eight years in jail Friday for lying to investors about the company’s finances.
Robert Vanier, 62, was convicted of filing a false prospectus, claiming that Onco had raised $22-million from earlier-stage investors in a 2006 private placement when it had not.
Ontario Superior Court Justice Sean Dunphy said Mr. Vanier intended to fool potential investors about Onco’s financial position, and said filing a false prospectus is a type of fraud.
“These submissions were false and Mr. Vanier knew this money was never there,” said Justice Dunphy, who read his ruling in French after a trial conducted in French.
He called Mr. Vanier’s crime “a strategy of huge audacity” and said thousands of investors “have seen their investments destroyed.”
Mr. Vanier was led from the Toronto courtroom in handcuffs after Justice Dunphy read his sentencing decision. He is already serving a three-year prison sentence imposed by Superior Court Justice Julie Thorburn in June after he was found guilty of misleading the Ontario Securities Commission about his true identity and his prior criminal record.
Friday’s eight-year sentence will be served concurrently with the sentence imposed in June.
Mr. Vanier founded Onco in 2002 in London, Ont., to acquire and restart dormant oil and gas fields in southern Ontario and Michigan that had previously been abandoned by larger companies, but still had available reserves.
No one who knew him in London was aware that he was born Carl Gagnon, and had a long criminal record, with more than 70 convictions for crimes in Quebec including numerous fraud convictions. He was a known associate of prominent Hells Angels gang members, and became an RCMP informant in the 1990s. He was later given a new identity under a witness-protection program and moved to Ontario as Robert Vanier.
When Mr. Vanier applied to take Onco public in 2007, he filled in required forms saying that he did not have a criminal record and did not use another name at any time in his life.
Onco board members, some company executives and even auditors from KPMG were convinced in 2007 that Onco had $22-million deposited in a bank account in Michigan, which were the proceeds from a private placement sold to 12 wealthy investors in 2006. Mr. Vanier claimed the early stage investors included former NHL players and prominent people in the hockey world.
Mr. Vanier had extensive hockey connections, and had played major junior hockey with the Shawinigan Dynamos. He persuaded former hockey star Luc Robataille to join the board of Onco, and claimed relatives of Sidney Crosby’s invested in the private placement in 2006.
Mr. Vanier said there was $22.4-million in a bank account at First Community Trust in Michigan, and falsified bank statements to reflect the balance.
Investigators later discovered that only one investor had participated in the private placement and his money had never made its way to the company’s accounts. They also found that there was no financial institution called First Community Trust, and its purported address was a post-office box in Michigan.
The RCMP’s white-collar crime unit, which laid the charges in the case, alleged that 1,400 investors lost more than $30-million when Onco’s shares plunged after the company went public in November, 2007.
Mr. Vanier urged Justice Dunphy to impose a sentence of three to five years, arguing that he is in poor health, has a heart condition and had not profited from the crime.
But Justice Dunphy said other circumstances – including the serious nature of the crime, Mr. Vanier’s role as CEO of the company and his prior criminal record – required a longer sentence. He said Mr. Vanier’s heart condition was under control with medication and was not a reason to reduce the sentence.
Janet McFarland