The Alberta Securities Commission has ordered a man and a woman to pay millions after orchestrating what it says "was among the worst frauds perpetrated in Alberta."

Arnold Breitkreutz, his company, Base Finance Ltd., and office manager Susan Elizabeth Way were found to have deceived investors and spent their money on properties for themselves or loaned it to another man, who bought properties in the United States.

In total, the two are estimated to have defrauded the investors — most of them elderly — of about $137 million.

The victims include an elderly couple who can't afford their retirement home, and a former dance teacher who can't buy a home to accommodate her disability.

The securities commission has ordered Breitkreutz to repay $2.67 million, an administrative penalty of $1 million and investigative and hearing costs of $100,000.

Way must repay $362,049 and an admin fee of $150,000, as well as investigative and hearing costs of $50,000.

Breitkreutz and Base Finance Ltd. have been permanently banned from trading or purchasing securities and derivatives. Way has been banned from such trades and purchases for at least 20 years.

Breitkreutz and Way operated Base Finance as a "two-man shop," the panel said. In the so-called Ponzi scheme, Breitkreutz was the head. Way, although she featured less prominently, had extensive knowledge of its workings.

The panel issued a decision Thursday and posted it online it Monday.

'Nothing wrong,' they insisted

The panel members noted the parties continually asserted "there was nothing wrong with their conduct apart from not being registered" with the securities commission.

In March 2018, the panel found Breitkreutz, Way and Base Finance Ltd. guilty of contravening the Securities Act.

Investors thought their money was secured by mortgages on real estate in Alberta, the panel said. Instead, it was loaned to a man to buy oil and gas assets in the U.S.

Many were paid so-called interest payments in order to maintain the facade of a legitimate lender, but the payouts actually came from newer investors' money.

Taking cash

The panel also found that Breitkreutz and Way withdrew cash from the company to buy their own properties.

"These schemes are particularly pernicious in the current climate of low interest rates and an aging population looking to set aside money to secure their retirement," the decision said.

In 2018, RCMP investigated and laid criminal charges of fraud and theft over $5,000 against Breitkreutz and Way. Trial is pending in that case, which Mounties said affected hundreds of Alberta investors.

To get their money back, victims must file a lawsuit and seek their own representation, as the securities commission is not permitted to assist with that.

Base Finance, owned by Breitkreutz, has gone into receivership, so he has lost most of his properties, an earlier decision said.

Investors were owed roughly $122 million when the company went into receivership. Way has gone bankrupt.

Victims still suffering

Among the victims, a couple in their 80s lost $1.4 million in the fraudulent scheme. The husband, an immigrant to Alberta, had developed a farm equipment business, building on his skills as a blacksmith.

He asked his accountant how to invest his money, and was referred to Breitkreutz.

The couple hoped to make enough to cover retirement facilities costs and donate to his brother's efforts as a medical doctor in Africa. Now they're short roughly $3,000 a month for the retirement home they hoped to live in.

Another woman, a retired dance teacher and convenience store owner, lost her life savings and a personal injury settlement award. She was told Breitkreutz could help her make money from Alberta real estate.

Instead, she now subsists on government pension payments, no longer able to buy a home suitable for her disability.

The scheme "shook the confidence" in Alberta's capital market among the affected investors, their friends and family, the commission said.

Both Breitkreutz​ and Way represented themselves before the commission panel of lawyers, Bradley Nemetz, Ian Beddis and Maryse Saint-Laurent.