A Freelton man who masterminded a $10-million US Ponzi scheme will be spending the next 12 years in a California prison.

Gordon Driver, 58, has been sentenced in a Los Angeles court to 151 months in prison and ordered to pay $9.7 million US in restitution to his victims.

Driver, who has been living in Henderson, Nev., was released on bail until Dec. 1, when he must report to jail.

In the meantime, he's been ordered to surrender his passport, must wear an electronic location-monitoring bracelet and is not allowed to leave Nevada's Clark County.

In April, Driver pleaded guilty to one count of wire fraud and one count of making a false statement to the U.S. Securities and Exchange Commission.

According to the statement of facts in his guilty plea, Driver told investors that he generated profits of up to 5 per cent a week trading certain types of futures securities and had never suffered a net trading loss over the course of any month.

"He knew the representations were false and failed to disclose to the investors that these representations were false," according to the court statement.

The agreement also notes that Driver knowingly made false statements to the SEC in April 2009 while testifying under oath.

About 250 investors in Canada and the United States were taken in as part of the scheme, believing that Driver had developed proprietary software that could help deliver profitable returns.

Two of the people ensnared in Driver's scheme were Reynold and Ron Mainse, sons of David Mainse, founder of Burlington's Crossroads Television and 100 Huntley Street.

The two men have been sanctioned previously by the Ontario Securities Commission for their roles in helping to attract investors to Driver's scheme.

Court has heard that, while he presented himself to his victims as a spectacularly successful investor, he was in fact quite the opposite. When he did actually try to make trades, his efforts were "abysmally unprofitable" and he lost about 94 per cent of the money he solicited.

At his sentencing this week, prosecutors said Driver was "a liar and a continuing economic danger to the community, who must be incarcerated for a lengthy period of time to keep him away from the investing public.

"Nor does he appear to understand that running a Ponzi scheme is always wrong," the prosecutors stated, "and that lying under oath is also always wrong, even if you occasionally sprinkle in the truth in answering some questions.

"Most troubling, (Driver) believes he is above the law — he has lied to this court about his employment history and mental state, to banks and brokers seeking to know their customers, securities regulators questioning him about his investment offering, and commodities regulators reviewing his application for a commodities license."

They also said Driver spent $2.1 million of the victims' money on himself and his family. The expenditures included three new cars, gambling in Las Vegas casinos, rent, meals, travel, entertainment, computer equipment, clothing and cash withdrawals.

Some of the impacts suffered by Driver's victims are heartbreaking.

One investor, now deceased, was suffering from cancer and needed the money she'd lost to pay for treatment. One 81-year-old man has to continue working because he invested money from his retirement savings.

One elderly man dying of leukemia borrowed a significant chunk of equity against the value of his house in the hope of leaving his widow with a larger inheritance. He lost it all.

One couple invested more than $532,000 US "and received nothing in return," the prosecutors stated.

Loading... Loading... Loading... Loading... Loading... Loading...

"How much time does it take in the recovery of a life tainted by Gordon Driver? We still don't know," the couple wrote in their impact statement. "He used God, the highest realm of humanity, to weave his web of deception, to gain the confidence of others, with no thought of hardship or consequence to those he preyed upon, only his own personal pleasure and gain."

Driver has already been barred for life from trading securities by the OSC and ordered to pay $5.6 million in penalties, restitution and costs.

He has also been ordered to pay $41 million in penalties and restitution to settle a related case brought by the U.S. Commodity Futures Trading Commission.