A scheme to build recreational parks and facilities that raised $2.9 million from investors was in fact fraud, the Alberta Securities Commission (ASC) has determined.
In a decision released Wednesday (Oct. 17), an ASC panel ruled that Calgary-based Blue Sky Resorts Inc., related entities Mandyland Inc. and Blue Sky Lease Inc., and their principals, former bricklayer Dennis Uhersky, his wife Margaret and Jeremy Davis, their daughter’s ex-husband who lived with them, defrauded investors and illegally traded and distributed securities, the Calgary Herald reported.
“The ASC panel found that, while almost $1.2 million of the money raised was used for legitimate business expenses, some $1.7 million was converted to the personal use or benefit of Dennis Uhersky, Margaret Uhersky, Jeremy Davis and their family, friends and business associates,” the ASC said in a news release.
In its written decision, the panel noted that a Blue Sky website showed promotional photographs of an apparently operating RV resort near Waterton National Park, although evidence showed the company never actually succeeded in buying the property despite several attempts.
The respondents also told investors the venture would soon become a publicly traded company and that their investments would be converted into stock listed on an exchange in Toronto, New York or Frankfurt.
The panel found that $569,000 was raised through the sale of Blue Sky Cos.’ shares between August 2005 and May 2008.
The respondents claimed the remaining $2.4 million raised after that date were loans made to Margaret Uhersky personally or to a California representative but the panel ruled the funds were actually an investment in Blue Sky.
The panel has set dates in November, December and January for ASC staff and the named parties to make sentencing submissions.