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Scales of justice

The Alberta Securities Commission has extradited an alleged fraudster living in California to stand trial in Alberta on allegations he helped improperly sell more than $27-million in securities to investors.

The ASC said Wednesday it has extradited Douglas Wayne Schneider from California after he was arrested by U.S. marshals at the request of the ASC and the Alberta Justice Department.

The regulator announced in January that it had charged Mr. Schneider and Kenneth Charles Fowler with selling securities in The Investment Exchange (TIE) Mortgage Corp. without registration, and with making "misleading or untrue statements" to investors. At the time, the commission said an arrest warrant had been issued for both men, but their whereabouts were not known.

In Wednesday's release, the ASC said Mr. Fowler remains at large and the commission is still seeking the public's help finding him.

The ASC halted all trading in TIE Mortgage in 2012 and appointed an inspector to locate and seize property belonging to the company and Mr. Fowler. The inspector found evidence the company had raised more than $27-million from investors in short-term investment loans.

A receiver's report by Grant Thornton Ltd., filed in court in 2013, said the inspector's review discovered "there were no legitimate mortgage investments and the funds have either been diverted to various unauthorized parties, or utilized for purposes unrelated to mortgage investments."

The receiver's report said there was evidence of a "regular flow of funds" from the company's accounts to Mr. Fowler's own accounts and records of jewellery purchases for his girlfriend and payments on a 2006 Porche 911 Carrera.

The ASC said Mr. Schneider was arrested in California in February and held in custody until he was extradited to Alberta on June 3. He appeared in the provincial court on Wednesday and was granted bail.