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An Okanagan investor who lost money to a promoter who misappropriated $10 million in a failed gold investment is left picking up the pieces after their portfolio manager was fined.

A man from Vernon named Shane (last name omitted) said he was nudged into investing with Crystal Wealth Management just months before their portfolios were seized. He said the loss put him into "survival mode," and he knows there are others in the Okanagan that were put in even tighter financial positions.

Crystal Wealth was a group of companies managed between Ontario and B.C., with B.C. portfolios run out of an office in Armstrong.

Albert Housego was a portfolio manager with the company in Armstrong who was fined $150,000 earlier this year for misappropriating funds and failing to provide necessary information to his clients.

Part of those failings included a lost investment in a prospective gold mine in November 2017, which amounted to a loss of $10 million of client funds.

While the Ontario arm of the Crystal Wealth group of companies consisted of clients that included many large companies and organizations, including the National Football League, the Okanagan investments included mostly "mom and pop" investors, Shane said.

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"I don't know if (Housego) is still in the Okanagan,... but a lot of the hardship they created is definitely here," Shane said.

A former college friend approached him after Shane returned from working in South Korea to pitch an investment opportunity with Housego and the Crystal Wealth funds.

"At that time I'd spent 16 years overseas working in other businesses and came back with a lump sum," Shane said. "I looked around and couldn't find my niche for investing, but I saw this as a way to make a return until I decided on what to do."

His former friend from college pitched the opportunity with enthusiasm, Shane recalled, but he was skeptical and even asked if the investment funds were a pyramid scheme. While he was hesitant, a review of the investments and data all showed it was a safe place to put his money.

"I invested for the two funds that Housego himself set up, and while I was doing that, there was a certain number of red flags that I ignored," Shane said.

A few signs that he ignored at the time included a celebratory culture within Crystal Wealth over portfolio manager commissions and that Shane's investments would be put into different accounts than what he was told by Housego.

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Within three months of his first investment, the Ontario Securities Commission seized Crystal Wealth accounts, and in another three months there was a class action lawsuit filed by investors in Ontario against the company's auditor, BDO Canada LLP.

No such lawsuit was filed in B.C., but Housego was reprimanded by the B.C. Securities Commission in June 2021. He is barred from investing on behalf of clients for 15 years, along with promoting or acting as consultant for investment firms, according to the decision.

While the decision against Housego included a $150,000 fine, it isn't directed towards the people who suffered the losses and comes nowhere close to the amount lost on behalf of his Okanagan clients.

Shane came to learn that much of the gold investments were put toward mines that never became productive, and he questioned how much exploration was even done at the proposed sites at all.

The B.C. Securities Commission decision was largely in relation to the gold investment, which was deemed to be "high risk" and had its $18 million investment insurance cancelled prior to defaulting.

At least 323 investors were affected by the default of the gold investment, including Shane.

"There's been a lot of sleepless nights where I wondered what direction this would force me to take. Once you go through this, it's no longer what can I do, but what am I forced to do," Shane said.

The lump sum he invested was meant to be used in the future to invest in a business for the long term, but when the loss put him into "survival mode," it put much of his lifestyle in jeopardy. Shane and his wife were in the beginning stages of a divorce, he said, because he wasn't able to see the risks before the entire investment came crashing down.

Although he and his wife are now stable a few years after the Crystal Wealth funds were seized, Shane said he is concerned for other Okanagan investors whose homes or retirements were at risk.

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In a teleconference between investors and auditors following the collapse of the Crystal Wealth investments, Shane started to realize the scope of who was affected.

"I was listening to men and women who had worked their whole lives and weren't sure where they would live or what they would do. To them, all that money's gone, it's just a black hole they were falling in," Shane said. "I imagine a majority were forced to make decisions they necessarily wouldn't have made without the breakdown of this investment."

Without insurance on the investment, it's difficult to retrieve the money that was lost. He recalled that auditors told him to expect 35 cents on the dollar, at most.

"Large organizations can write off the punch, but the small mom and pop investor, lots of times they lose everything. In my mind, that's the greatest evil," Shane said.

According to Shane, he spoke to others in the Okanagan who were affected by Crystal Wealth and found that they included a variety of people including accountants, wealthy landowners, business owners, police officers and retirees. He believes many were embarrassed to make their association with Crystal Wealth known publicly.

"In the North Okanagan, I think Housego was very well connected and trusted," Shane said. "I think, quite honestly, money is a drug. We make money off our investments in the thousands of dollars and that creates the desire for more.... A person gets addicted to it. He probably started with good intentions and at some point got off track."

EDITOR'S NOTE: The last name of the man involved in this story has been removed by special request Dec. 19, 2022. 

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