Former P.E.I. minister sentenced to 15 months in jail for defrauding elderly widow

Former P.E.I. minister Harold Alan Stewart has been sentenced to 15 months in jail for his role in a scheme to defraud an elderly widow in Ontario.

Stewart, 70, was convicted of two counts of fraud and one count of laundering the proceeds of crime by a jury in Oshawa, Ont. 

Stewart and his co-accused, Alexsander Budimirovic and his partner Ashley Carlson, were tried and convicted jointly last fall and Stewart and Carlson were sentenced on May 17. 

At trial, Stewart claimed he'd been duped by a friend. The judge, however, said while he wasn't the instigator he was "wilfully blind" and used his stature as a minister to gain the widow's trust.

The victim, Ethel Hockett, was in her late 80s at the time.

"Ethel Hockett was an extremely vulnerable victim," said Superior Court Justice Jocelyn Speyer in handing down sentence. "The impact of the offence on her was devastating."

'I trusted in him'

Stewart was a Presbyterian minister with the Kensington-New London pastoral charge on P.E.I. for about a decade.

Before that he worked for two decades in Ontario, and did outreach work with men who were struggling with addiction issues.

Budimirovic was one of the men Stewart had counselled in the early 2000s, according to court testimony.

When Stewart moved to P.E.I. they were out of touch for a few years, until Budimirovic called him out of the blue in 2011, Stewart told court, and asked for his support in developing a wellness centre for recovering addicts.

I just pray that you people can get my money back to me.— Ethel Hockett

Stewart testified he wasn't keen on the idea at first, since he was busy covering two churches, had some health problems and an elderly mother.

But he said Budimirovic convinced him to set up a numbered company to develop the wellness centre.

Since Budimirovic had a criminal record, both told the court they thought Stewart would have a better chance getting the financial backing they needed.

Stewart said he thought he'd be a silent partner, with Budimirovic handling the bulk of the setup for the wellness centre.

"I trusted in him and believed in him because this was his dream, this was his vision," Stewart told the jury.

A generous donation

In the months that followed, the two kept in touch about their plans.

In the fall of 2014, Stewart told court Budimirovic called and told him to expect a generous donation from a woman named Ethel Hockett.

A week later Stewart got a $138,500 cheque in the mail from her. He told the jury he'd never met Hockett and "I assumed this was a person of some wealth." He also said he figured it would end up costing millions to develop this wellness centre, so this cheque was a start, but much more would be needed.

Court heard Stewart deposited Hockett's cheque into his own bank account, and at Budimirovic's direction, used about $20,000 to pay off Stewart's mortgage, and transferred another $17,000 to Carlson, Budimirovic's wife.

Cheque worth 4 years income

However Hockett was not a wealthy woman. She was in her late 80s, living on an annual pension of $36,000, so the cheque she wrote to Stewart was the equivalent of four years income for her.

Court heard she got the money for the cheque by taking out a line of credit for $140,000, using her mortgage-free home as security. 

As a former accountant with the Ontario Ministry of Finance, a former pastor and Sunday school teacher, and regular member of the Salvation Army Temple in Oshawa, Hockett had a reputation for paying for everything with cash, and for being careful with her money and deeply religious, according to friends who testified at the trial.

When her friends at church heard she'd loaned substantial amounts of money to Budimirovic and that he was using her credit card, they got suspicious and eventually convinced her to go to the police.

Due to her deteriorating health, police videotaped her statement which was played at the trial.

Mr. Stewart used his stature as a minister to gain Mrs. Hockett's trust.— Superior Court Justice Jocelyn Speyer

In it, she told police she didn't remember writing the $138,500 cheque to Stewart and was shocked to find out the amount and that her house was collateral if the line of credit wasn't paid off.

"I just pray that you people can get my money back to me," she told police.

"She wasn't one for luxuries," Christine Carr, a long-time friend, told the jury. "She was completely shocked that the large amount of money was owing and that it was tied to her house."

Police investigated and charged Stewart, Budimirovic and Carlson with fraud in April 2016.

Stewart's defence

The three accused were tried jointly by a jury in Oshawa last fall.

On the stand, Stewart said Budimirovic told him to move money between accounts and that the lines between business and personal accounts became blurred.

"I took his direction. It wasn't my money. I felt I should do what he asked," Stewart told the jury.

To complicate matters, Stewart had co-signed a $480,000 mortgage on a home for Budimirovic and Carlson and paid the $50,000 down payment.

On the stand, he explained they couldn't get a mortgage on their own. "They needed a place to stay ... it was something I thought I should support."

Stewart told the jury he got "a sickening feeling that something was wrong" in April 2016, just a few weeks before he was arrested, when he found out Budimirovic had racked up $18,000 on Hockett's credit card.

Stewart testified he gave his friend the money to pay off the bill, but found out later Budimirovic had only put $5,000 toward the bill.

At that point, he told the jury, he added up what he had personally loaned Budimirovic and was shocked to come up with a total of $161,000.

"I was heading for retirement and I had this massive debt on my shoulders," he said.

He said his involvement with Budimirovic "destroyed my life, my career, my reputation and finances."

Her last years before she succumbed to dementia were characterized by stress, worry and shame about having been taken advantage of.— Superior Court Justice Jocelyn Speyer

He testified that before he could figure out what he should do, he was arrested and charged.

Budimirovic, who represented himself during the trial, said he set up the financial arrangements with Hockett and that she was fully aware that she was investing in his plans for a wellness centre. He told the jury that Hockett was like "a part of our family" — that he had taken her on outings, to the grocery store, and invited her for family dinners.

Budimirovic told the court it was only later, when Hockett's mental health was failing, that she began to forget that she'd made the investment. He also testified that Hockett had given him permission to use her credit card. Budimirovic said he used some of the $18,000 he got from Stewart to make a payment on the card, and used the rest to cover other expenses, including legal fees.

Case against Stewart

Prosecutors told the jury Stewart was not the dupe he made himself out to be — he had six years experience as a realtor and another six in hotel management and knew about mortgage applications and financial records. "It defies belief that he did not know what was going on," said Crown prosecutor Taran Boodoosingh.

Boodoosingh told the jury they "may be reluctant or hesitant to think that a man of religion is capable of committing … acts of fraud." But he urged the jury to look beyond his profession. "Mr. Stewart is an educated, well-travelled, and financially sophisticated man."

In return for her cheque, Hockett was given a share certificate for a numbered company signed by Stewart court heard — a document prepared 16 months after her cheque was received. The Crown alleged this was given to Hockett to quell her suspicions and cover up the fraud.

Boodoosingh also told the jury that even once Stewart had his suspicions, he didn't contact the police, hire an accountant to review the finances, or make any attempts to pay back Hockett.

The jury found that Stewart's involvement accepting the cheque based on the line of credit on Hockett's account was fraud and that transferring the money into his own and Carlson's accounts was laundering the proceeds of crime.

In addition, the jury found him guilty of fraud for co-signing the mortgage on the Budimirovic/Carlson home. Court heard Carlson had told the bank she was making $77,000 a year as office manager for her husband's construction company. In reality, she was a stay-at-home mother who hadn't worked in four years.

His involvement in this attempted coverup confirms his awareness of the fraudulent nature of Mr. Budimirovic's activities.— Superior Court Justice Jocelyn Speyer

Stewart retired from his position with the church on P.E.I. in the fall of 2016.

"He'd led an unblemished life, devoted to community service until he met Mr. Budimirovic," said Justice Speyer in passing sentence.

However, she added "Mr. Stewart used his stature as a minister to gain Mrs. Hockett's trust."

Speyer also pointed to Stewart's involvement in preparing the share certificate for Hockett after he heard police were investigating.

"His involvement in this attempted coverup confirms his awareness of the fraudulent nature of Mr. Budimirovic's activities," Speyer told the court.

Hockett died in February at the age of 92.

"Her last years before she succumbed to dementia were characterized by stress, worry and shame about having been taken advantage of," said the judge. "She feared that she'd lose her home. Her trust was betrayed."

In addition to the 15-month jail sentence, Speyer ordered Stewart to make restitution of $70,000 — half of the money Hockett sent him for the treatment centre.

If family/friends see someone who is working to get close to an elderly person, speak up.— Roberta Boyce, Ethel Hockett's friend

Carlson offered no evidence at trial in her defence. The jury found her guilty of three counts of fraud and one count of uttering forged documents. She was sentenced to 90 days in jail and ordered to pay the other half.

Stewart was also ordered to forfeit the $118,911.79 profit made when the house Budimirovic and Carlson lived in — the one he had co-signed the mortgage for —  was sold.

Budimirovic was found guilty of two counts of fraud and one count of attempted fraud, and will be sentenced at a later date.

All three still face another set of unrelated fraud charges. A date for that trial has not been set.

Friends caution others

Roberta Boyce, who was an administrative assistant at the Salvation Army Temple in Oshawa at the time, and had known Hockett for 30 years, described her as "a generous and kind, loving lady" who didn't like to be in debt.

In an email to CBC, Boyce said she hopes this case shines a light on the risks facing vulnerable people.

"If family/friends see someone who is working to get close to an elderly person, speak up," Boyce wrote. "I didn't because Ethel was always so careful with every single penny that I couldn't imagine anyone ever taking advantage of her.

"I regret that decision so much," Boyce wrote.

Hockett left a third of her estate to the Salvation Army Temple in Oshawa and the rest to relatives.

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