It’s been quite a while since I’ve posted anything on this blog about the debacle that was Concrete Equities, but the wheels of justice move slowly – when they move at all – in the realm of white-collar crime. Finally though, some good news:
“While one of his victims sobbed in the back of a Calgary courtroom, a city man pleaded guilty Friday for his role in bilking $23 million from hundreds of investors. Varun (Vinny) Aurora pleaded guilty in provincial court to fraud over $5,000 in a scheme centring on Mexican real estate investments. His own father lost the largest amount — $901,000 — in the fraud run by Concrete Equities Inc. that roped in 1,200 investors, about 20 of whom showed up in court. The play, which began in 2007, sold investor units in a Mexican development known as the El Golfo project, whose purchase price Concrete Equities greatly inflated for investors.”
– Calgary Herald Article
What kind of a person would defraud his own father out of $901,000? I’ll leave that for you to decide. While I’m glad to see him charged and his guilty plea, I am stunned at the “justice” being served here: according to this CBC article, he will spend no time in jail. Incredible – just incredible. ? $23 million dollars was stolen from 1200 people – much of it retirement savings – and he doesn’t go to jail. His punishment?
Continue reading Concrete Equities’ Varun “Vinny” Aurora Pleads Guilty to Fraud
I don’t often delve into politics or healthcare economics on this blog, but I’d spent some time writing up a reply on a Facebook thread that I felt was worth re-posting here. The single biggest struggle I’ve had since moving to the USA has been the healthcare system. It’s…insane. The people who have lived in it their whole lives don’t all grasp how insane it is. This response was written to one such person who brought up the Canadian tax system and said the taxes were too high.
Yes, you pay more taxes in Canada. But you know what you don’t need? Basic healthcare insurance. Guess how much I had to pay out of pocket in 2015 for health insurance? Just under $10,000. My employer also paid $5300 above that cost, so figure $15K all-in to insure two non-smoking adults and two kids. Oh, and another $6500 off my paycheque for the HSA because I’m on a high-deductible plan and I have to pay for ALL my healthcare until I hit the deductible for the year (which is about $2000 per person or $6500 for the family I believe). The HSA is a great invention, but since it’s only for healthcare, it’s another healthcare cost – so figure I’m paying $21K per year so my family has healthcare coverage…yikes! The only good thing is the HSA rolls over each year and helps people save for the more expensive years of healthcare. And that I can pay for dental stuff with it – which of course I have ANOTHER plan for the costs me $1300 a year for. Oh, and vision…
Continue reading Canada: Paying More Taxes, Getting More Services
In 2014, I had some funds in Canada that I wanted to invest – the CAD to USD exchange rate was too awful back then I didn’t want to convert it. However, as a non-resident of Canada, I was highly limited in what I’m able to invest in. I thought I’d take advantage of a Tax-Free Savings Account (TFSA) until I found something better to do with the money. A TFSA is similar to the ROTH IRA in that it allows for tax-free growth. So I figured I’d give it a try…that was a mistake.
It turns out that non-residents of Canada cannot make deposits into a TFSA. When you do, a surprisingly high tax kicks into place: 1% per month on the total invested. If you leave funds in a TFSA all year, you’re paying 12% tax on it. And that’s not on the interest, it’s on the principal. Ouch! Unfortunately, I didn’t realize this – and there was no warning to me before making the investment. Luckily I invested late in the year, so the fees I had to pay were a little more than one month. No one likes receiving a surprise tax bill in the mail though!
Bottom line: unless you live in Canada, don’t put money into a TFSA.
I don’t use PayPal as much as I used to – maybe a couple times a month – but I noticed something earlier this year that struck me as odd. Every time I logged into my PayPal account, rather than taking me to my home screen showing my balance and transactions, PayPal would show me a page promoting their credit card, or promoting their “pay later” service.
Recently, in this holiday season of buy-buy-buy, I used PayPal a couple of times and in every instance the default was “Pay After Delivery” and it was set to withdraw money from my bank account. You have to dig a layer down to find what should be the logical default: PayPal Balance.
PayPal has been spun off from eBay, and there’s clearly maneuvering afoot to re-invent PayPal as more than just a digital payment tool. They want to finance your purchase, and touch your bank account more often – they don’t want to be an isolated island like many of us (myself included) use them.
We have enough credit cards companies in the world destroying the financial lives of average people – we don’t need more of them. PayPal shouldn’t be going down this road…
“Credit cards are like chainsaws: the more of them you juggle, the greater the odds you’ll lose a financial limb.”
“Your first paycheck, and every one after that, is what you save part of in order to prepare for life after your last paycheck.”
Personal finance management and investing is one of my newer personal passions, so I’m going to start blogging about those topics here on a regular basis. I’d love to hear from people on how they manage their money!
I still use cheques now and then (those are “checks” for you ‘muricans) but they tend to be larger values (my son’s school tuition, summer camps, community HOA fees, etc.) and I despise the unpredictability of not knowing when they’ll be cashed. I’ve been burned more than once by having a cheque I’d forgotten about be cashed, pushing my account into a negative balance and triggering an overdraft move of money from another account (and sometimes a fee).
Leaving money in my chequing account is a pain since I zero it every week (on Thursday nights to be precise). If someone was doing old-school cheque-book accounting, and keeping a running tally, they wouldn’t have this problem – but I just can’t run my financial life using a model so restrictive, and, frankly, cumbersome. I wanted a solution that would work for my financial management style.
I decided instead to take an approach that would give me more control, but took the essence of the chequebook approach: you make sure for every cheque that is written, there are sufficient funds to cover it, and those funds are never touched because they’re already spent. I created a “Write a Cheque” bank account where I move the exact amount of the cheque over from my main chequing account, and leave it there. So over a period of weeks the “Write a Cheque” account goes to zero as each cheque is cashed. I’ve been using this method for several months and it has completely solved my challenge.
How do you deal with cheques in your day today financial life?
Photo above courtesy of eComm Merchant Solutions.
In the past six months, I’ve had a few conversations with parents of young kids (8 and under), and none of them are actively teaching their kids about money, instead figuring they’ll do it “later”. According to this study by the UK’s Money Advice Service, basic money habits are formed in kids by age seven. By the time most parents think their kids are “ready”, the money habits are already formed. In these conversations I’ve had, some of the common reasons for avoiding “the money talk” among parents are have included:
The Myth: “My kids aren’t old enough to understand much about money yet.”
The Reality: There’s a great saying that goes “More is caught that taught”, and having been a parent for the past six years, I can vouch for the truth of it. Your kids are watching what you do, and learning from it. They’re watching you spend, and save (or not). They’re watching what you buy, and they’re listening to what you say about money in your home. If you’re having financial struggles, they may be watching you and your spouse fight about money. If you’re not purposefully explaining your actions regarding money, your kids are going to come up with their own interpretations of what money is all about. You’d be surprised what your kids have picked up about money along the way, but don’t leave their education half-finished.
Continue reading Having The Money Talk With Your Kids: Part 1
I’m a believer in capitalism and working hard to make profit and succeed – but I find myself feeling almost like a left-wing socialist when put in the context of the American political system. The raw, unchecked power American corporations have over the political process – and thus over the laws the regulate their behaviour – is truly terrifying. Things are just broken, and they’ve largely remained broken since the financial meltdown of 2008. Not much has changed.
Elizabeth Warren is playing a vital role in power-checking the big banks and corporations that have, for the most part, completely abdicated their socially-responsible role in our society. Here’s a great article about Warren, and a great quote that sums up part of the problem:
“You built a factory out there? Good for you. But I want to be clear: You moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.” – Elizabeth Warren
I’ve had these documents for several years and had been meaning to put them up for public access – all text below is taken verbatim from the documents in question.
Alberta Securities Commission: Notice of Hearing (Oct 2010) [Download PDF]
To: Wealthstreet Inc, Colin Davis Jones (aka David Colin Jones, aka Dave Jones), Rachael Poffenroth
Allegations & Summary of Breaches:
- “Staff (Staff) of the Alberta Securities Commission (Commission) alleges that Wealthstreet Inc. (Wealthstreet), Colin David Jones also known as David Colin Jones (Jones) and Rachael Poffenroth (Poffenroth) (collectively, the Respondents) engaged in illegal trading and distributions of securities in Alberta to Alberta investors.”
- “Staff also alleges that Jones acted as an advisor in Alberta without being registered as an advisor, made prohibited and misleading or untrue representations to Alberta investors and engaged in unfair practices in transactions with Alberta investors.”
Alberta Securities Commission: Amended Notice of Hearing (Oct 2010) [Download PDF]
To: VARUN VINNY AURORA, DAVID HUMENIUK, DAVID JONES, VINCENZO DE PALMA
Allegations & Summary of Breaches:
- “Staff of the Commission (Staff) allege that Varun Vinny Aurora (Aurora), David Humeniuk (Humeniuk), David Jones (Jones) and Vincenzo De Palma (De Palma) breached the Act by acting as dealers without being registered in accordance with Alberta securities laws, and without an applicable exemption to the registration requirement, or by authorizing, permitting or acquiescing in such conduct by one or more corporate entities of which they were a director or officer.”
- “Staff allege that Aurora, Humeniuk and Jones breached the Act by making, or by authorizing, permitting or acquiescing in the making of, statements each knew, or ought reasonably to have known, were misleading or untrue in a material respect, or that did not state a fact that was required to be stated or that was necessary to make the statement not misleading, and that would reasonably have been expected to have a significant effect on the market price or value of the security in question.”
- “Staff allege that Aurora, Humeniuk, Jones and De Palma each breached the Act by trading in securities on his own account, or authorized, permitted or acquiesced in the trade of securities on one or more companies’ own account, in circumstances where such
trades were distributions, without having filed a prospectus or preliminary prospectus for which a receipt had been issued by the Executive Director of the Commission (the Executive Director), and for which no valid exemption applied.”
- “Staff allege that Aurora, Humeniuk, Jones and De Palma each acted contrary to the public interest.”
Alberta Securities Commission: Notice of Decision (Dec 2011) [Download PDF]
To: Wealthstreet Inc, Colin Davis Jones (aka David Colin Jones, aka Dave Jones), Rachael Poffenroth
Recognition of Seriousness:
- “Jones, in our view, still does not recognize the seriousness of his misconduct. Communications to investors that are in evidence and his statements before us (on the few occasions that we saw or heard from him) demonstrate Jones’s persistence in contending that any issues with the Promissory Notes and the other securities sold through Wealthstreet were caused by global economic conditions and not his actions. He continues to accept no blame or responsibility for his illegal actions. When cross-examining investor witness KC, he implied that she was in a more balanced position with her current investments (through Wealthstreet) than she had been before meeting Jones. In fact, KC had gone from having retirement savings of over $200 000 and real estate equity of several hundred thousand dollars to apparently losing all of her savings and owing $540 000 on home equity lines of credit. In addition to not accepting responsibility for the financial harm he caused his clients, Jones seems unwilling or unable to appreciate the fact that his actions contravened Alberta securities laws and were contrary to the public interest.”
- “We believe that Poffenroth recognizes the seriousness of her misconduct and sincerely regrets both her involvement in Wealthstreet and the harm caused to Wealthstreet investors. She candidly admitted that she was not qualified to act as Wealthstreet’s president. She also testified during the Merits Hearing that she experienced “shock and hurt” at learning some of what Jones had done and how the investors had been affected. She appeared to accept the majority of the sanctions suggested by Staff as appropriate and expressed her intention not to be involved with public companies in the future. However, the evidence also indicates that Poffenroth had concerns about being under-qualified and being upset over some of Jones’s activities while still employed at Wealthstreet. Despite her concerns and reservations, Poffenroth continued for a time to act as Wealthstreet’s president and collect her generous remuneration. She later filed a claim with the Trustee for money owing to her from her wrongful dismissal claim. At no time did she report Jones or Wealthstreet to any regulators. We conclude that while some of her remorse and recognition of seriousness is genuine, some of that contrition stems from her desire to minimize the sanctions she might receive.”