Telephone chat line scam heats up St. Paul
The St. Paul Journal
12 March 1997 (Vol. 76, No. 10)
Rhonda Noyce
Staff Writer
The Bishop of the St. Paul Roman Catholic Church has been accused of investing a large amount of money into a telephone chat line scam, but no one is saying a word.
The story began at the end of February when the Alberta Securities Commission issued an investor alert about a company selling profit-sharing investments in adult entertainment telephone chat lines.
The company, Edmonton-based Mid West Marketing Group, has ties to St. Paul — one of the two principals is a Paul Deni Charbonneau who is originally from St. Paul.
The commission put a freeze on the company’s bank accounts and cautioned the public not to invest any more money in the company. Since March, 1996, the company raised over $10 million from investors, but the commission has found no evidence that Mid West Marketing Group used the investor funds for any telephone lines. The commission also found that most of the investors are from rural areas in northern Alberta.
“There should be a number of people in your backyard who would be interested in hearing about this,” Commission Director Charles Blakey said last week.
Blakey has a list of the approximately 850 investors who bought into Mid West Marketing Group, but he is not making (Cont. on page 2)
them public at this time. However, the Edmonton television news station CFRN found evidence that a charitable foundation from the John Paul II Catholic Bible School in Radway had invested a large amount of money in the company.
When the Journal contacted the school administrator, Gordon Foss, he said that there are two charitable establishments at the school — the John Paul II Catholic Bible School Society and the John Paul II Catholic Bible School Foundation.
“The charity under question is the John Paul II Catholic Bible School Foundation,” Foss said last week. “The media is accusing Bishop Roy of investing money from the Foundation into the (telephone chat line) scam.”
Bishop Roy teaches at the school and is also the head of the Roman Catholic Church in St. Paul. According to Foss, he is also one of the key players in the Foundation.
“There is no involvement of the school in the Foundation,” says Foss. “lUs. a separate charity. We have never seen the objectives of the Foundation.”
From what Foss knew about the charity, it has been set up to raise funds for the construction of a new school.
Back in St. Paul, Father Lavasseur said last week that the Diocese is not involved in the investment in any way, and that they were all totally surprised when news of this questionable investment came to light.
“It was a surprise to all of us. We are supposed to receive a letter from the Bishop to verify what is happening.”
Bishop Roy left town when CFRN starting questioning him at the beginning of last week. The Journal was told that he was attending a Bishop’s conference in Victoria, B.C. However, he did return to St. Paul on Monday and when the Journal asked him about the investment he commented, “Everything’s under control; I have nothing to add.”
Foss said that there were two other people involved with the Bible school Foundation, Father Tetu, who is Bishop Roy’s driver (according to Foss), and Stan Kroetch from Waskateneau. When each of these men were contacted, they also refused to answer any of the Journal’s questions.
The Alberta Securities Commission has ordered a notice of hearing for the Mid West Marketing Group. This means the people involved in the company will be summoned before the commission to answer a series of questions. Paul Charbonneau is said to be in custody at a jail in the United States.
Blakey says that he is currently phoning and sending letters to many of the investors of the Mid West Marketing Group, to find out what they know about the company and their investment.
“There are two things I’ve heard so far,” says Blakey. “They know they have invested either into an adult conversation line or a psychic line.”
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Nothing sells like sex
A pay-telephone promotion collapses in ruin, taking with it a Catholic bequest
The St. Paul Journal
12 March 1997 (Vol. 76, No. 10)
Bishop Roy greets John Paul II: His intent was simony, not prostitution.
If something seems too good to be true, goes the saying, it probably is. The latest proof comes from Paul Deni Charbonneau and Brian Lee Helfrick, two Edmonton businessmen who are believed to have talked some $ 10 million out of 866 investors, many from rural Alberta, in a phoney phone-sex promotion. The investors ranged from self-employed businessmen to a “liberal, money-hungry” Catholic bishop who reportedly lost $750,000 from a foundation for the John Paul II Bible School in Radway. Mr. Charbonneau was jailed in Montana two weeks ago attempting to enter the U.S. with fake identification, and the Alberta Securities Commission (ASC) and RCMP are currently investigating the affair.
Operating under the name Mid West Marketing Group, Messrs. Charbonneau and Helfrick allegedly told interested parties they could finance up to ten 1-900 lines each. Mid West would charge $3,100 per line, and, according to a Mid West “income projections” sheet, reap big profits. Just three calls a day would result in a $13,750 annual return per line, while 40 calls a day would earn $175,000 annually. Almost 3,300 line contracts were signed, says Charles Blakey of the Alberta Securities Commission (ASC), but not one line was opened.
Authorities suspect it was a Ponzi scheme, named for the late American swindler Charles Ponzi, in which early investors are paid off using money put up by later investors. They may also have been dazzled by a posh Edmonton office, and an elegant Christmas bash and private dinner theatre performance at Edmonton’s Mayfield Inn. Consequently, “people were recommending [Mid West], and it spread like a bad cold,” explains Mr. Blakey. From northern Alberta it went to the Northwest Territories and Yukon, and expanded to the Maritimes and Washington State as investors encouraged friends, children, and even their parents to get in.
But the plot turned rotten in January, when the chief inspector’s office at the Alberta cfbn-w Treasury Branch security department contacted the ASC. “They told us that they thought there were some unusual goings-on with the Mid West account,” says Mr. Blakey. “All these moneys were coming in through cheques, and they couldn’t see that the company had income from anywhere else.”
The ASC began investigating, and the case broke open two weeks ago when Mr. Charbonneau was thrown into a Shelby, Montana, jail for using his brother’s identification. Two days later, the ASC seized bank accounts belonging to the company containing $3.1 million.
But the seizure came too late for most investors, and some Albertans who lost their life savings are asking why they were not warned about Mid West by law enforcement officials. Terry and Lucille Robins of Grande Prairie are one such couple. They paid for three lines last June, but decided that before recommending Mid West to anyone, they wanted to be certain it was above board. Their lawyer, Roy Carter, requested an RCMP investigation.