B.C. fraudster gets house arrest for bilking 'extremely vulnerable' client out of $155,800

A British Columbia judge has sentenced a fraudster to two years less a day of house arrest for bilking an “extremely vulnerable” client out of $155,800 that he frittered away on gambling.

Kenneth David Derksen, a former consultant at Investors Group Financial Services Inc., pleaded guilty last year to fraud over $5,000 for sending the money to himself in e-transfers from the accounts of a client, John Boellaard, who was out of the country, and at some points hospitalized in Thailand.

Derksen sent himself the money in amounts between $300 and $3,000, from his client’s retirement and savings accounts, “over a prolonged period of time,” from November 2016 until February 2019, according to a recent decision from B.C. Provincial Court.

“He has expressed his shame, guilt and regret for his actions. At the time of sentencing submissions, he had yet to tell his family of his offending. He regrets the impact that his actions will have on them,” Judge Jeremy Hermanson wrote in a May 1 decision out of Courtenay, B.C.

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The 59-year-old father of two adult children told the court that the stolen money went to gambling, which he described as an addiction.

“I accept that online gambling was a contributing factor to his offending,” Hermanson said. “He has lost hundreds of thousands as well as his marriage to gambling. He has received some counselling but to this point, that has been minimal.”

Derksen “has banned himself from casinos and has deleted his online gaming profiles,” said the judge.

“He reports to not having gambled since the charges before the court came to light. There is no evidence that the money stolen was used for a lavish lifestyle. I accept the money was used for the purposes of gambling.”

The Crown argued for a sentence between 18 months and two years less a day, followed by a year of probation. It also wanted the judge to order Derksen to pay Investors Group the $164,164.74 it has already doled out to his fraud victim, which included the amount stolen plus what the client had “missed in financial gains.”

Derksen’s lawyer recommended a conditional sentence order between 18 and 24 months.

The judge grappled with whether Derksen should serve his sentence behind bars or in the community, on house arrest.

“There is agreement that denunciation and deterrence are the paramount sentencing considerations,” Hermanson said. “However, counsel for Mr. Derksen submits that I must not lose sight of rehabilitation and that a (conditional sentence order) with strict terms can address the need for denunciation, deterrence and rehabilitation.”

According to the judge, “this was an unsophisticated enterprise.”

Derksen’s victim “became suspicious” over time, said the decision, which notes he demanded an audit of his accounts.

Derksen “begged” Boellaard not to go to Investors Group with his concerns, said the decision.

During a period of time in 2018, the victim “was hospitalized in Thailand and extremely vulnerable,” said the decision, which notes Derksen sent money to both Boellaard and himself during that period.

Derksen didn’t have a criminal record before this.

The court heard Derksen was employed with Investors Group from 2007 until 2021. “When his fraud came to light, he lost that employment. He is presently a caretaker at a local resort and gets additional income by working as a handyman for his neighbours.”

The judge said he didn’t have any medical evidence that Derksen suffers from a gambling disorder.

“I note that Mr. Derksen, after the discovery of his offending, stopped gambling,” Hermanson said. “He accomplished the cessation without any significant medical or counselling support. I am unable, on the evidence before me, to conclude that his gambling issues attenuate his moral blameworthiness.”

Derksen “has been an active member of his community, volunteering as a youth coach in soccer and hockey and as the president of a local environmental group,” said the decision.

Case law established that “the range of sentence for fraud involving significant amounts of money perpetrated by first time offenders is high provincial time and federal sentences as high as four to five years,” said the judge.

The amount of money Derksen stole and the length of time he carried out the fraud were aggravating factors, Hermanson said.

“This was not a one-time offence. Mr. Derksen made several e-transfers over a significant period.”

The breach of trust was “a significant factor,” said the judge.

The victim “said he trusted Mr. Derksen, so much so that he gave Mr. Derksen direct access to his account,” Hermanson said. “Mr. Derksen was in a position of trust, and he exploited that position.”

When confronted with the theft, Derksen “first denied taking the money.”

His guilty plea was the “primary mitigating circumstance,” said the judge.

“The plea has saved significant resources and is an expression of remorse. Mr. Derksen’s remorse and shame are genuine.”

Hermanson was “satisfied that he does not pose a risk to the public should he serve his sentence in the community.”

The judge said the sentence had to “be crafted in such a way as to achieve the primary objectives of denunciation and deterrence. I find this is a case where true house arrest, in conjunction with the public shame, loss of employment and future employment ramifications can meet the sentencing principles. I have considered the guilty plea, sincere remorse, lack of sophistication, aged mother and the goal of rehabilitation in reaching this conclusion.”

The judge warned Derksen that if he breaches the conditions of his house arrest, he “could be ordered to serve the remaining portion in custody.”

There are few exceptions to Derksen’s house arrest. He can leave home for work and medical emergencies, and he has three hours on Saturdays to deal with personal matters.

Derksen “must complete 100 hours of community work under the direction of your conditional sentence supervisor,” said the judge.

Derksen must also provide a copy of Hermanson’s sentencing decision to any potential employer. Same goes for any organization where he tries to volunteer.

“You must not be found in any facility that has as its primary business gambling or games of chance,” said the judge.

Hermanson also handed Derksen a year of probation and ordered him to pay $164,164.74 to Investor’s Group Financial Services in Nanaimo.

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