Surrounded by boxes, Georgette Hawe scans possessions gathered during her family's life, carefully choosing which cherished mementos to keep, and what to toss into the trash.

"We have to sell this house." the 81-year-old said, "We're leaving an 11-room house to go into a four room [apartment]. It's not very good."

After working and saving, for retirement, Georgette and her 76-year-old husband, Norm, hoped to spend their final years helping others. The couple are Salvation Army ministers, veterans of projects to protect the poor and homeless. Now, Georgette Hawe says their faith in God is fragile.

"We're broke. We have no money" said Georgette.

It is all because their golden nest egg, $450,000, was turned over to an Ontario investment called Golden Gate Funds.

Although it might sound familiar, Ontario's Golden Gate Funds has no connection to the near-billion dollar San Francisco company, Golden Gate Capital.

A W5 investigation into Golden Gate Funds has uncovered a trail of broken lives, and broken promises. The Hawes are just two of more than 150 investors who lost more than $8 million when the mortgage investment company collapsed in 2007. The financial meltdown sparked investment industry investigations, accusations of deception and ongoing questions about securities regulation and oversight.

Ernest Anderson

Golden Gate Funds was founded by Ernest Anderson, an Egyptian-born businessman with a flair for raising funds and flattering political friends. He claims a PhD in economics from Columbia University, a degree W5 has been unable to verify. Living in a $4-million, 7,000 square foot mansion, north of Toronto, Anderson denies any wrongdoing and blames the meltdown on market circumstances and on others who worked at Golden Gate.

But Milton Chambers, a lawyer Anderson hired as Golden Gate's in-house counsel, says this isn't a case of gullible seniors making ill-informed investment decisions.

"They were taken in the same was I was taken in," said Chambers.

Chambers joined Golden Gate after Anderson invited him to a high-profile party for Paul Martin, Prime Minister from 2003 to 2006. Anderson and his wife made large political donations to the Liberal Party, at least $10,000 in 2005 alone. He courted Conservatives as well, attending fundraisers and hiring high profile members of both parties. Milton Chambers believes those kinds of connections impressed investors, and lent sparkle to Golden Gate as the investment fund attracted investors.

"I know some of the investors were persuaded to invest because of that," said Chambers.

Directors deny involvement

In 2007, the company took out an ad in the Globe and Mail, announcing a new high-profile Board of Directors, including former Prime Minister John Turner, former RCMP Commissioner Norman Inkster, and former Conservative Cabinet Minister John Reynolds.

W5 contacted all three to confirm that they were directors of Golden Gate. They denied that they had ever agreed to sit on the company's board.

John Turner said in a statement; "I was never on the Board of Golden Gate Funds, nor have I had anything to do with it."

Norman Inkster said it was "a complete surprise to me."

And John Reynolds, who also denied ever joining the Golden Gate board, had even harsher words for Anderson.

"How do you sleep at night?" Reynolds asked "You take people's money and that's all they have. I hope he gets to sleep in a jail."

Soon thereafter, Golden Gate's shine began to tarnish.

Eighty-four-year-old investor Bob Saunders realized something was wrong when Golden Gate tax statements stopped coming in the mail. Even now, he's not sure what happened to his $150,000 investment.

"I'd like to see if we could get our money back." Saunders said, "Like what happened to it? Does nobody follow up on this?"

The Ontario Securities Commission -- the agency that monitors and enforces investment laws -- first opened an investigation when Golden Gate began marketing its funds to the public, as far back as 2005.

Ads claimed Golden Gate Funds was an investment in mortgages, promising eight percent annual returns with almost no risk to the principal. In a series of letters, the OSC demanded Golden Gate comply with securities law by registering with the OSC, filing a proper prospectus and begin reporting its operations.

But that never happened. And because of the OSC's privacy rules, investors were never warned of Golden Gate's status.

OSC and the money

In January 2009, after the collapse of Golden Gate, about four years after its investigation began, the Ontario Securities Commission launched formal hearings against Ernest Anderson and Golden Gate.

A Commission investigator told the hearing it "looks as though a certain amount of funds were spent on Mr. Anderson's lifestyle, for his personal expenses…it's our understanding Mr. Anderson did lease a Porsche, a limousine and a Bentley."

In a joint Settlement Agreement signed with the Ontario Securities Commission in September 2009, Ernest Anderson admitted there were no investments in mortgages.

"Contrary to the Golden Gate Limited Partnership agreement, investor funds were not used to purchase an investment portfolio of mortgages. Investor money was transferred .. to the bank accounts of other related companies, used to pay operating costs for Golden Gate Funds LP and other related companies, used to pay monthly interest payments to other investors and used to re-pay investors from a previous investment scheme operated by Anderson."

Golden Gate's former in-house counsel, Milton Chambers told W5, "It appears as if all of the money was used in the classic Ponzi scheme – in which new investors were paying out old investors. Or it was used to pay the ongoing expenses of the company for a period of three years."

The OSC ordered Ernest Anderson and Golden Gate Fund to pay nearly $4.8-million in fines and fees. There is no indication any of the investors have been repaid.

In an e-mail to W5, Ernest Anderson wrote, "What went wrong, market conditions, miss organization (sic) at the time I left the company to by ran by other (sic) while I had to deal to some personal issues."

In a later statement Anderson also said: "I am very sorry for all of the investors who lost money with Golden Gate, I am sorry, that my family lost all of the life savings and inheritance in Golden Gate."

W5's investigation also uncovered some troubling information about Mr. Anderson's past. In 2005 he was convicted of sexual assault relating to incident which took place at Golden Gates' offices. He also has civil court cases and judgments totalling more than a quarter million dollars against him.

W5 has learned law enforcement agencies are aware of the Golden Gate Funds failure. The OSC says its investigation of Golden Gate and Ernest Anderson remains open but offered no further details.

All of this is of little comfort for Georgette and Norm Hawe. The elderly couple is now squeezed into a four room apartment. Their $450,000 retirement savings is gone. Their bank account holds little more than $2,000 to pay the rent.

"It's really hard. I worry. I don't sleep at night," Norm Hawe says. "I never thought this would happen to me."