Investors say 'fake' experts on local radio shows conned them out of millions | CBC News (2024)

Dozens of investors in Ontario say they were conned out of millions of dollars afterfraudsters using fake names were featuredas investment "experts" on their favourite radio stations — on shows theysay sounded like news but were actually infomercials.

"I trusted what I was hearing on the radio," saidTracey Conrad, who lost $15,000 after listening to the so-called financial experts on a popular radio show in her hometown of London, Ont.

The supposed foreign exchange experts were regularly featured on at least five local radio stations— owned by Corus Entertainmentand Bell Media —that ran in southern Ontario between 2016 and part of 2017.

During the segments, the "experts" would often call into the radio shows from locationslike London, U.K.,togive financial advice, encouraging listeners to invest in what they claimed was a reputable foreign exchange investment company:Trans-Atlantic Direct.

• Story for Go Public?Contact Rosa and the Go Public team​

Conrad saidshe "couldn't breathe" after getting a letter in August from herprovincial securities regulator, notifying her that the men she'd listened to on the radio — regularlybeing interviewed by her favourite on-air personalities — are being investigated for operating what's believed to be a "fraudulent enterprise" that was "promoted on local radio programs."

The whole area of paid content isan ethical quagmire.- Media ethicistStephen Ward

"At first, I didn't even believe the letter,"saidConrad.

The case highlights the increasingly blurredline between programs that sound like news but are actually paid advertising,and how disclaimers often do little to inform audiences of the difference, says media ethicist Stephen Ward.

"The whole area of paid contentis an ethical quagmire … Cases where it's blurred cause false stories," he said.

By the time the so-called experts were pulled off the air, Canadian investors were out more than $6 million,according to a class-action lawsuit filed against the fraudsters, their companies and Corus Entertainment.Corus owns what are now branded as Global News radio stations that featured the so-called experts on segments titled"Ask the Experts" and "The Global Market."

Corussays it pulled the programs as soon as it heard about the concerns.

The class action was filed on Jan. 22. The allegations haven't been proven.

'All they had to do was make a phone call'

The so-called experts weren't registered with the Ontario Securities Commission (OSC), so they weren't allowed to operate in the province. The OSCbelieves they used fake names andhad a fake company.

Conradand about 30 other investors who are part of the lawsuitbelieve the radio stations are partly to blame for their financial losses, according to court documents.

"All they had to do was make a phone call to the security commission to find out if they [Trans-Atlantic Direct] were legally able to operate in Ontario. And if they had done that, they would have been told no and I would have all my money," Conrad said.

The programs sounded factual, she said, and the hosts interviewing the "experts" were the same people whocovered the news.

"I trust the people that are my local news reporters, that when they're talking to somebody every single week and they're making claims like that,that they are legitimate."

Fraudsters disappear with money

According to the lawsuit, the radio shows aired throughout 2016 and into part of 2017.Listeners were told there was minimal risk to investing and were urged to call Trans-Atlantic Direct with investment questions.

While on air, the so-called investment experts called themselves Stewart Price and Martin Schwartz. TheOSCalleges they are actually Mark Lee Singer and Bernard Justin Sevilla.According to the allegations set out in OSC documents, the men never invested the money, as promised, instead keeping it for themselves.

Trans-Atlantic's phone numberis nowdisconnected anditswebsite has been taken down. Go Public reached out to Singer and Sevillathrough multiple email addresses and phone numbers associated with the men, but neitherreturned the requests for comment.

Other investors tell Go Public they haven't recovered any of their money and haven't been able to reach anyone at Trans-Atlantic in over a year.

Corus calls shows 'infomercials'

Corus declinedan on-camera interview with Go Public andinstead issueda statement.

Trans-Atlantic Direct purchased an hour of weekly airtime on two Corus radio stations in Ontario — AM900 CHML in Hamilton and AM980 CFPL in London —"for the purposes of airing a regular infomercial," the company said. The program began airing in January 2016.

Corus rebrandeditsradio stationsin 2017, putting them under the Global News name, afew monthsafter theTransAtlanticDirect programs were taken off the air.

"The program was paid advertising," saidCorus spokesperson Rishma Govani,"and was clearly identified as such."

"Each broadcast included clear disclaimers before, after and during the program, advising listeners that it was paid-advertising programming and that the opinions expressed during the program were TAD's alone, and not those of Corus or its affiliates."

However, GovaniadmitsPrice or Schwartzappeared onotherradio programs,"providing opinion or commentary."In those cases, she says, "it is likely that no disclaimer would have been provided."

Two investorsGo Public spoke with say they never heard the disclaimers on any of the programs they heard.

Corus also saidTrans-Atlantic Direct was obligated to "ensure that the scripts, recordings or instructions submitted to [the stations] are in accordance with commercial and trade ethics, applicable codes and laws or bylaws in force at the time of broadcast," and that the stations "relied on the company to comply with those obligations."

The shows were pulled in 2017after Corus received "certain information" and a small number of listener complaints, Govani said. Corus wouldn't elaborate on what information it received, or providedetails about thecomplaints.

It saidit wasn't aware of any investigation into Trans-Atlantic until several months after it pulled the program.

The companyalso said it intends to defend itself against the lawsuit, saying it "is confident it acted diligently and responsibly in removing the program from the air when it did, based on the information available to it at the time."

'Fake experts allowed to create fake' show

Trans-Atlantic Direct also aired on three Bell Media radio stations in southern Ontario from late May 2017 until November 2017 as part of a one-hour paid program, according to Scott Henderson, vice-presidentof communications for Bell Media.

Cheryl Hanstke first heard about what she thought sounded like promising investment opportunities with Trans-Atlantic on one of those stations,NewsTalk610CKTB.

"They were presented as foreign exchange investment specialists," Hanstke said.

By December 2017, she'd invested $20,000. She didn't get a cent of it back, she says.

"I never once believed it was an ad. I always believed it was a gentleman who was being interviewed by the host," saidHanstke, notingshe had been listening to the the same radio host ever since moving to St. Catharines, Ont.,in 2013.

"I have said again and again that the 'fake'experts allowed to create this 'fake' investment show through the various radio stations ... failed to do their due diligence," Hanstke said.

Bell Media didn't respond to Go Public's questions about how it vets the people on its shows, but in an email, Henderson wrote: "The program had aired on other non-Bell Media-owned radio stations, with no indication of concerns about the individuals involved with the program. When we became aware of legitimate concerns regarding TAD'sactivities, we removed the program from our stations and terminated our relationship with TAD."

Bell Media's policies and practices related to advertising and paid programming are continually reviewed and updated, he said.

Michael Ellis,the lawyer representing investors in the class action against Corus, toldGo Public he's also preparing a lawsuit against Bell Media.

"This all gets back to the fact that these media companies were putting people on the air that were not licensed, that had no ability to do what they said they were going to do," he said. "If they had just done a small degree of research, they would have been able to find that … and they could have kept them off the airwaves."

Prison sentence, history of fraud

Go Public's investigation found that the men alleged to be behind Trans-Atlantic Direct, Singer and Sevilla,have a history of theft and investment fraud in the U.S.—long before allegedly targeting Canadian investors.

In 2000, the United States Commodity Futures Trading Commission (CFTC) foundthat Singer committed fraud while part-owner of another Florida-based investment company, Lexus Financial Group. In that case, 90 per cent of investors lost money, according to public documents.

In the early 2000s, Sevilla was sentenced to four years in a Florida prison for eight grand theft convictions. During that period,he was also ordered to stop running an investment scam in that state after the CFTC took him to court. Sevilla is currentlywanted in Florida after failingto report to his probation officer.

'Moral obligation' to be reliable

According to Ward, what's now happening in Canada may have been avoided if the media organizations thataired the segmentshad done a better job of vetting who they put on air,and had been clear with listeners about which programs are paid advertising and which are news.

Disclaimers are often confusing, he said, especially if the tone of the programs are newsy.

"There's great responsibility when you're dealing especially with financial information," Ward said."There is a moral obligation to do as much as you possibly can to make sure the information is reliable and truthful."

He saidhe'd like to see media companies clearly disclosing onlinetheir relationships with the people and businesses appearing on their programming.

Radio stations silent with listeners

Conrad saidher favourite radio programs ultimately went silent on the topic of Trans-Atlantic Direct,without ever explaining why Price and Schwartz were no longer onair.

"I'm really disappointed. They have an obligation,even just to be a good human being. Why has nobody over there done something? And that's where I think they need to be held accountable," she said.

Hanstketried to get answers from her local station and said she was told that someone from Bell Media's legal department would call her back—but that call never came.

It's been more than two years since eachwomaninvested their money, andboth say they're still working to dig themselves out from under the loss.

NOTE: According to CBC's journalistic standards and practices, those appearing on CBC Newsprograms are not allowed to promote a specific financial product or solicit business either for themselves or a financial company.