March 14, 2018 (Courtesy of OttawaCitizen.com) – After years of battling side by side on the ice, he had their trust. So when Marc Brunet offered to bring friends in on a big investment opportunity, they lined up with cash in hand, they say.But now, years later, with their teammate facing charges after a joint investigation by the Ontario Securities Commission (OSC), the RCMP and the OPP, those same friends say they wish they’d looked into the investment offer a little more carefully.
Brunet and his wife, Helene, have been charged with fraud after they allegedly sold more than $800,000 worth of shares in their company, MultiCast Networks Holdings Inc. (MCN) to private investors. The OSC alleges “a significant percentage of the money obtained was used by the Brunets for their personal benefit.”
MCN has been billed as an online streaming service for live events, including sports. The business has offered impressive financial projections, and cited an advisory board that was said to include prominent figures, including Montreal Canadiens great Yvan Cournoyer.
However, according to those who say they invested — and an investigation by this newspaper — there were warning signs things weren’t all rosy.
Authorities allege the Brunets did not have the required registration to sell shares of MultiCast, and that they traded shares without proper documentation, such as a prospectus, to explain the company’s business and associated risks.
In order to deal in securities in Ontario, a business or person must be registered with the securities commission. There are exemptions to this rule when selling shares in a private company to family, friends and associates, but the charges suggest OSC investigators do not believe these applied to the Brunets.
The charges have made waves in the rural south end of the city, where numerous people claim to have fallen victim to the alleged fraud. Those affected allege Brunet, a former Ottawa police officer with ties to the local recreational hockey community, took tens of thousands of dollars in investment in MultiCast Networks years after the firm was ordered to dissolve by Industry Canada (now known as Innovation, Science and Economic Development Canada, or ISED).
The charges have not been tested in court. Repeated attempts by the Ottawa Citizen to reach the Brunets to discuss the company and the charges against them have been unsuccessful.
According to official government documents from Industry Canada’s corporate database, Brunet operated MultiCast Networks Holdings Inc., as well as one other related business with a similar name, between 2001 and 2011.
However, according to those same documents, the firms failed to provide annual filings for several years between 2001 and 2011.
That led the federal regulator to issue a certificate of dissolution to each firm in 2011, ending their status as registered businesses under the Canada Business Corporations Act. When a company is dissolved, “the legal existence of the corporation has ended,” explained a spokesman with ISED.
In order to operate as a corporation in Canada, a company must be registered with either the federal government or the province in which it plans to function. There is no record to suggest that Brunet ever tried to register MultiCast Networks as a business in Ontario.
However, several people who invested in the firm allege Brunet solicited funds for MultiCast Networks after it was dissolved. Those same investors say that, since investing, they have not received regular quarterly financial reports or been invited to an annual general meeting of shareholders, the latter of which is a requirement for a corporation that wants to stay in good standing.
The Ottawa Citizen met with five individuals who claim to have been caught up in the alleged fraud. Most wanted to remain anonymous. Some were worried that being identified could affect their professional lives, while others were simply embarrassed. Some alleged they have invested more than $60,000 in Brunet’s company.
Some of those making allegations have said they were close friends with Brunet, and many had been playing recreational hockey with him for years. They also knew he had previously been a police officer with the Ottawa Police Service, which, they said, enhanced his credibility in their minds.
Those who invested said Brunet would often talk about the business success that MultiCast Networks was becoming.
They heard about the business trips he was taking. They saw swag and branded MultiCast Networks paraphernalia, including hockey jerseys with MCN branding on them, which Brunet provided for a tournament his team attended in the U.S. just last year.
The buzz began to spread outside of the hockey community. Soon, others wanted in.
“I went to him,” said Darrin Dowich, who invested in MCN in 2013 in hopes of turning a tidy profit that could help his family. “I was hearing all these great things. My money was going to go toward my daughter’s education.”
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Deborah McCoy – Is an investigative journalist and has over 17 years of investigation experience in both the private and public business sectors. Since joining CFN, Ms. McCoy has become a true advocate for victims of fraud and increasing the public’s awareness in fraud prevention.