Newly published documents in the case against locked-in retirement account (LIRA) fraudster Stéphane Gagnon show that Gagnon has already served 3.3 years of his five-year sentence while waiting in custody for the legal proceedings concerning him to conclude.

Gagnon must also pay nearly $7.5-million within eight years or face another 7.5 years in custody for failure to pay.

Formerly of Ottawa, Gagnon was convicted on one count of fraud over $5,000 and one count for using a forged document after he admitted that between August 1, 2015 and May 31, 2021, he received more than $20-million from victims across Canada.

More than 300 investors believed they could access funds in the LIRAs if they invested money in Gagnon’s numbered company. “He also admitted that he used forged lawyers’ letters to attempt to continue his business relationship with one of the trust companies into which the victim’s money had been deposited,” the Ontario Securities Commission (OSC) said in an announcement about Gagnon’s conviction earlier this month.

The OSC sent the judgment to the Insurance Portal. At the time this article is written, it is not yet publicly available. 

“Mr. Gagnon represented to the investors that they could access their LIRAs in one of two ways: first, by borrowing 60 per cent of the funds as a loan with a six to eight per cent interest rate, with the remaining 40 per cent earning a 10 per cent interest rate; or second, by accessing the funds in tranches equal to their shares in the numbered company, less a fee and withholding tax,” the recently published Ontario Superior Court of Justice documents show.

Although Gagnon paid back more than $12.3-million to investors, the justice in the case states that it is possible to infer that Gagnon returned the funds in the course of the scam in order to keep it going. The Criminal Code requires a court to impose a minimum punishment of two years if the fraud is valued at over $1-million.

The joint submission from lawyers in the case – that Gagnon be sentenced to five years, less pre-sentencing custody (time served) – was given effect at Gagnon’s sentencing, despite being in the low end of the range of penalties established by previous cases. “It recognises that while Mr. Gagnon did not plead guilty, he save the state time and resources by not contesting the Crown’s case,” the decision states.

Although the Crown argued that the justice should also require Gagnon to give a sample of his DNA to law enforcement, the justice declined to make that order saying DNA had nothing to do with the investigation. “In this case, the impact on the offender’s privacy, while minimal, outweighs any future value to law enforcement which is even more minimal.”