Next Level Investments: Kingston’s own Ponzi scheme

Next Level Investments

Fraudulent investment company boss sentenced to prison

The 29-year-old founder and CEO of Next Level Investments, a company that operated in Kingston between 2016 and early 2017 and turned out to be a Ponzi scheme that bilked the majority of its estimated 874 investors out of more than $3.5 million, was sentenced Monday to the equivalent of five years in penitentiary.

Christopher Uitvlugt pleaded guilty last November to a single count of fraud over $5,000, and his sentencing had originally been scheduled for March this year to allow for the preparation of a pre-sentence report. Two days before sentencing submissions were to begin, however, his lawyer at the time, Clyde Smith, was named a judge and required by law to immediately cease all practice as a lawyer, necessitating the case be rescheduled.

His defence was subsequently taken over by Sarah Black, who negotiated a resolution on his behalf with Crown prosecutor Alexander Hrybinsky, and the two lawyers presented Justice Gary Tranmer with a joint recommendation on sentence, urging five years in penitentiary, minus enhanced credit on 72 days Uitvlugt spent in pretrial custody following his arrest in March 2018, which leaves him with four years and about nine months left to serve.

Uitvlugt has no prior record and, in accepting the lawyer’s sentencing recommendation, Justice Tranmer cited a Supreme Court decision that requires judges to give deference to lawyers’ joint recommendations on sentencing unless they are clearly unfit. He observed that while 14 years is the maximum sentence available for Uitvlugt’s crime, five years is a significant amount of prison time for a first time offender.

“Prison won’t be easy,” the judge told the 29-year-old. “It’s not intended to be.” But he also wanted Uitvlugt to know, “if it wasn’t a joint submission, it (the sentence) would be significantly longer.”

Originally from Gananoque, Uitvlugt worked at various jobs, according to defence lawyer, Sarah Black.

It was revealed, in other related court proceedings, that he spent time in the oilfields, returning to this area in late 2015 and working as a server at a local restaurant.

Early in 2016, however, Uitvlugt started Next Level Investments, which was registered as a business with the Ontario Government in April 2016, but never licensed as an investment business or authorized under the Ontario Securities Act to sell investments to the public, even after it was renamed Next Level Capital Group in December 2016 and moved out of his home to commercial offices on Princess Street .

When Uitvlugt first entered his guilty plea, Justice Tranmer was told, his investors were led to believe they could realize returns as high as 550 per cent per annum investing with him. Their money was supposed to be put into the Foreign Exchange (FOREX) market with 50 per cent of the profits returned to the individual investor, while 50 per cent was retained by Next Level.

But Justice Tranmer noted that the police investigation into Next Level’s dealings determined that more than 678 of the company’s estimated 874 investors received no pay out whatsoever.

It was also discovered that out of $4.8 million that police investigators were able to establish went into Next Level accounts, only a very small amount — $24,000 — was ever used in trading, and the trades Uitvlugt did make resulted in a net loss of $5,000.

After police shut down Next Level, $136,925 in cash was recovered from one of Uitvlugt’s associates and his wife, and Hrybinsky said three bank accounts belonging to Next Level and its CEO remain frozen and various property, including vehicles, a boat, bicycles and car parts, have been seized. He told the judge the Crown intends to use those monies and whatever can be realized from the sale of the seized property to reimburse the cheated investors “to the extent possible.”

Justice Tranmer asked him the anticipated value of those assets, including the liquidated property, and he was told by Hrybinsky that he can only ballpark it at this point, but guessed it would amount to around $1.2 million of what has been estimated as a $3.5-million loss to the collected investors’.

Speaking for her client, Black told the judge that Uitvlugt is a dedicated father to three young daughters, one of whom has serious health issues. She told the judge that he started Next Level intending to run “a legitimate and fruitful business. However, Mr. Uitvlugt quickly got carried away.”

Now, “financially he has been left with nothing,” she said, and faces a difficult separation from his children.

Uitvlugt likewise told the judge: “I’d just like to say, when I started this I meant to do right and not hurt anybody.” Echoing his lawyer, he added that he got carried away.

Justice Tranmer, fresh from a review of victim impact statements provided by 32 of Uitvlugt’s victims, told him bluntly that whatever impacts he experiences are entirely his fault.

“You did this,” the judge said. “You lost everything. You took yourself out of your children’s lives.

“It was your choice to trade that for the assets and a (rental) Lamborghini.”

He told Uitvlugt, “you preyed on these people, you preyed on their trust, their hopes, their dreams,” and to illustrate his point he cited examples from the various impact statements, many of them $500 to $1,000 investors who could ill afford to lose the money.

More than one of the victims, the judge noted, was trying to raise extra cash for needed home repairs, and at least one of those had thought Uitvlugt a friend.

Another of the victims was a senior citizen who invested the $1,000 he’d saved for emergencies.

Several were trying to create a financial buffer for loved ones with expenses related to serious health problems. Several more wrote of losing money they’d put away and were trying to grow for the education of one or more grandchildren.

Others wrote of marital discord in the wake of their loss. Justice Tranmer cited one man who wrote that he hasn’t told his spouse about the lost money and feels depressed and ashamed.

In addition to Uitvlugt’s sentence, the contents of his and Next Level’s bank accounts and all property seized by police has been ordered forfeit to the Ontario Government by Justice Tranmer, in care of the attorney general. It’s anticipated that some time in the next month, instructions will be published in this newspaper and possibly on the Kingston Police website on how to go about making an application for restitution.

Published on: November 12, 2019 by The Kingston Whig Standard