Lino Matteo convicted of 270 counts of securities fraud in Mount Real scheme

CTV Montreal: Guilty of fraud Lino Matteo, president and founder of Mount Real, has been found guilty of fraud in a decade-old legal case.

A controversial Montreal businessman was convicted Thursday morning on 270 counts of securities fraud.

Lino Matteo was the founder and president of investment company Mount Real, which scammed 1,300 small investors out of more than $130 million.

The company was essentially operating as a Ponzi scheme, offering people between eight and 12 per cent returns on their investment.

The Autorité des marchés financiers (AMF), Quebec’s financial regulator, stepped in to investigate and discovered Mount Real was really a complex financial structure that even Matteo’s partners and assistants had trouble understanding.

"The evidence of the AMF eloquently showed that Mr. Matteo spoke a language that only he could understand," said Judge Helene Morin.

The company collapsed in 2006, and the victims who lost their life savings filed a class action lawsuit against the accounting firms that should have keep a close watch on the company.

The small group of investors also pressured the AMF into laying charges of securities fraud against Matteo.

Sylvain Theberge of the AMF said the provincial agency is pleased with Matteo's conviction.

"It's one of the most, maybe the most important penal trial regarding securities in Canada," said Theberge.

The case initially went to trial in 2013, but was delayed for many, many months.

Eventually, Matteo’s account of what transpired was discredited, and he was found guilty on Thursday.

Investors who took part in the class action suit will also likely be receiving their cheques this month.

“We will be receiving a $43-million settlement in that class action, which will represent somewhere around 50 per cent of the net capital that we lost, so that’s also been a long fight,” said fraud victim Janet Watson.

This isn’t Matteo’s only fraud case: he was sentenced last year to eight years behind bars for the Cinar fraud scandal, where the men involved were charged with swindling investors out of more than $120 million in a fraud scheme.

Matteo is currently free on bail because he is appealing that sentence.

The judge in the Mount Real case, however, could sentence him up to five years in prison.

Matteo, who represented himself in court, will return to court on Sept. 18.