A former Aequitas Risk and Compliance associate claimed that she flagged to management what appeared like Ponzi-like payment before she left in 2015.
Vanessa DeHaan appeared as a federal witness in the criminal trial of former Aequitas executives Brian Rice Andrew MacRitchie Robert Jesenik. They are accused of fraud, financial crimes, and could face decades of prison time if found guilty.
Aequitas collapsed in 2016, and was accused of paying out existing investors using new investor funds. Defense attorneys claim that the materials given to potential investors clearly stated that new investments could be used to provide working capital or redeem existing investors.
DeHaan who appeared on the witness stand Thursday worked for Aequitas less than one year starting in October 2014. She worked for Deloitte in Illinois and Northwest Trust Asset Management before that. DeHaan was responsible for Aequitas Investment Management's compliance testing. According to Oregon state records, she was and is still a licensed CPA, but now works as a financial advisor.
When she started at Aequitas in 2010, the office had been remodeled, and Fitbit smartwatches were given to employees. She testified that the company appeared profitable.
She attended company meetings and reviewed records to understand her concerns.
DeHaan said that at one meeting, a superior told her to treat the company as if it were a "credit-card addict." She was surprised when she saw a loan between companies of over $100 million at another meeting. Brian Oliver, the former second-in command at Aequitas allegedly stated that it was not supposed to be so big. Oliver's sentencing is set for May, on charges of fraud and money laundering. He admitted guilt in 2019 and gave testimony earlier this week.
DeHaan, who has a background in auditing, wondered, "Will my employer go bankrupt?"
DeHaan found a few transactions when she compared bank statements with other records. These were where new investors had paid out money to past investors. The largest transaction reportedly exceeded $4 million.
She testified that her heart was racing. "That was a classic Ponzi payment."
She informed her supervisor of what she had found, stating that it could be interpreted as a Ponzi scheme. She claimed that as information was passed up the chain up to MacRitchie in her organization, MacRitchie told her there was no problem with using proceeds this way. She claimed she did not know whether he was correct or incorrect, but she was taught that she should trust him and verify.
DeHaan found similar payments of up to $300,000.
She came across an email chain in June 2015 that started in February 2015. It appeared to show the connection between investor money coming into the system and redemptions by investors.
DeHaan says she spoke to her supervisor.
She said she was physically sick and had lost sleep. She was worried about how it would affect her career.
Eight months after joining Aequitas she gave her resignation on June 22.
Bob Holmen, the new attorney for the company, arrived around the same time. Holmen, she claimed, reacted like something was wrong when she expressed her concerns. Holmen is expected to give testimony later in the case. He allegedly told her that they could not change the past, but try to correct the course.
She testified that nothing could have made DeHaan remain at Aequitas.
She said "I was scared" and added that she had a "squeaky clean" professional background.
She confided in her husband and a few close friends. DeHaan didn't report her concerns to the Securities and Exchange Commission. DeHaan has not been accused of any wrongdoing. She admitted that she had considered the SEC whistleblower route, but decided against it as she knew by then the SEC was investigating Aequitas.
In testimony and documents this week, it was revealed that the SEC had alerted Aequitas to its investigation in May 2015.
DeHaan left on July 3, 2003.