Victims upset but ‘not surprised’ real estate fraudster Jim Pellerin appeals, walks free on bail

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Victims of convicted fraudster Jim Pellerin were left with a bittersweet legal win last week after Pellerin was sentenced to a three-year prison term and ordered to pay a half-million dollars in restitution. Hours later, he was released on bail pending an appeal.

Pellerin, 68, a prominent local real estate investor and consultant who has authored multiple books on the subject, was found guilty of 27 counts of fraud after a judge ruled he intentionally misled his lenders in a scheme that was “motivated by greed.”

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In rendering a three-year prison sentence last Thursday, Superior Court Justice Robert J. Smith said Pellerin “harmed, tricked and deceived” his 17 lenders by providing them misleading and false information on a house-flipping investment in Carleton Place.

Pellerin denied having any intent to defraud his lenders — many of whom considered Pellerin a friend — and his defence lawyer, Bruce Engel, maintained the investment was simply a real estate deal gone bad.

Pellerin retained appeals specialist Howard Krongold and was released on bail on Thursday, the same day he was set to begin serving his sentence.

“The Court of Appeal has released Mr. Pellerin because there are arguable legal errors with his conviction,” Krongold said in a statement. “Mr. Pellerin has vigorously defended himself throughout these proceedings, and he will continue to fight these charges in the Court of Appeal.”

Pellerin was granted bail and released with the consent of the Ottawa Crown Attorney’s office. The bail hearing was resolved in writing without an in-court appearance.

Pellerin had been ordered to pay back $572,000 to his investors, without interest, within five years of the completion of his sentence.

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A dozen lenders who were defrauded by Pellerin filed victim impact statements in March and told the judge they had to delay their retirements and work another four to five years to rebuild their finances.

It’s already been a long road to restitution for Greg Walker, the lead investor on Pellerin’s failed townhouse project, who has yet to see any of the $150,000 he lost on his investment with Pellerin seven years ago.

“He never admitted that he was guilty and he made the Crown go through a weeks-long trial — and the victims relive the trauma by witnessing and writing victim impact statements — only to be found guilty of (27) charges of fraud,” Walker said.

“He never spoke to say he was sorry… he had two opportunities to do so: just before he was found guilty and just before sentencing was pronounced. He never paid a penny of restitution for the seven years that this has been going on (and) he avoided all contact with the victims after he screwed them.”

Pellerin collected the individual $30,000 investments in 2016 and 2017 and oversold a 12-unit townhouse development, issuing 17 promissory notes and telling his investors their money would be secured in a specific townhouse unit.

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He assigned the same townhouse unit as security to several lenders, Justice Smith ruled, and he used the balance of the loans — more than $300,000 — for his own personal use, including a personal coach, car lease payments, overhead expenses for his other businesses and paying himself a salary of $150,000.

He was charged with fraud in December 2020. He was found guilty on Feb. 7.

Walker and other victims were irked when Pellerin “immediately appealed and posted bail” following his sentencing hearing last Thursday.

“He is walking around free now,” Walker said, with the appeals process expected to extend over many months.

“If he loses the appeal and goes into prison, he can apply for early release after serving one-third of his sentence, so he could be out in one year. After that, he has five years to repay the money to the victims. He has not paid any restitution over the last seven years…”

Walker said the ruling means he will likely have to wait more than 15 years from the time he was defrauded in 2017 to the date the court ordered Pellerin to pay him back.

Colin Leech and Mary Jane Kelleher said they were pleased with the sentence and the restitution order, along with the judge’s order that bars Pellerin from working in the financial sector for five years after his sentence is complete.

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“We are not surprised that Mr. Pellerin is appealing,” Leech and Kelleher said in a statement.

“I think that the judge laid out the reasons for his decisions very clearly and that those decisions will survive any appeal. Nevertheless, the appeals process will take time and some victims will continue to be retraumatized as the process drags on. Even without an appeal, this case will be on our minds for at least another eight years before restitution is completed, more than doubling the length of time that this issue had been hanging over us since Mr. Pellerin defrauded us.”

Krongold said Pellerin’s appeal is contesting his conviction “for now” and his counsel has not yet decided whether to lodge an appeal of his sentence.

ahelmer@postmedia.com

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