The Charming Mr. Elder
Michael Elder used his family’s establishment connections to convince a who’s who of Bay Street to pour $12 million into his miraculous new device. Thirteen years later, the OSC is circling and a throng of angry investors are wondering whether they got played by a master manipulator
On any given morning, you might find Michael Elder at one of his favourite hangouts, Caffe Doria or Starbucks in Rosedale. Look for a short, broad-shouldered, middle-aged man with a fringe of grey hair and a generous paunch. In the evenings, you can often spot him at Quanto Basta in Summerhill, or in the city’s old-money salons—the Hunt Club or the National Club. In Manhattan, you’ll see him pressing the flesh at the exclusive Union League Club or Explorers Club. He’s also a fixture on the international party circuit, cavorting at Hearst Castle in San Simeon, the Duke of Edinburgh’s Awards event in New York or a polo match soirée under the Florida palms. Often decked out in a tattered velvet smoking jacket and silken ascot, he moves with the swagger of entitlement, as if he owns the place, or should.
The eldest son of Olympic gold medal–winning equestrian Jim Elder and scion of a distinguished Ontario family, Elder was raised in the bosom of wealth and privilege. At 17, he declared his ambition to maintain that lifestyle. “I want to get into some business,” he told a Toronto Star reporter for a story about the offspring of prominent people. “Any business that will make me money.”
For a long time he struggled, bouncing from one failed venture to the next. But in March 2002, at age 43, he acquired what should have been his El Dorado—the U.S. patent rights to a tablet computer. At the time, the iPad was just a gleam in Steve Jobs’s eye. The patent thus constituted the crest of a looming digital tsunami. The commercial potential, buoyed by Elder’s energetic salesmanship and impressive Rolodex, was tantalizing. Big-money players, anxious to catch the innovation wave, not only lined up to invest, but also urged friends and colleagues to do the same. A mere fraction of the market would make them all rich.
That’s not the way things worked out. The story of Michael Elder is a disaster epic, a long trail of broken promises and betrayed trusts, depleted bank accounts, strained marriages and shattered friendships. Dragging on for 13 years, it now involves officials in half a dozen countries, offshore bank accounts and a thorny mystery surrounding ownership of the patents. And it’s a cautionary tale, shedding light on the careless investment habits of the rich and the waning of a family dynasty.
Had Elder’s investors and creditors paid closer attention to his early business career, they might have spared themselves both money and grief. After dropping out of York University, he got a job at Frostmaster, a division of McGraw-Edison. Then, in the late 1980s, he teamed up with his first cousin, Robert Cudney, founder and CEO of the Bay Street investment house Northfield Capital. Their plan was to produce metal parts used to convert taxi fleets and other vehicles from gasoline to propane. The venture was gaining traction when Elder suddenly attempted to seize control of the fledgling company. Cudney thwarted the coup and bought his cousin out. They have not spoken since.
A few years later, through Frostmaster connections, Elder joined a venture to revolutionize commercial refrigeration. A Chinese physicist, Chujun Gu, had developed a refrigerant free of ozone-destroying chlorofluorocarbons. Canada, the U.S. and Mexico had all agreed to end production of CFCs by 1996. The sales potential for an environmentally friendly refrigerant was enormous. Elder pledged to commit $1 million to the new company, Greencool, in exchange for a 20 per cent stake. The invention would ultimately make Gu a multi-billionaire and one of China’s richest industrialists. Elder raised about $450,000 from investors, well short of his target. According to court documents, he returned $6,000 to one shareholder and spent most of the rest on personal use. The investors were furious. Two of them, Robert Sillcox and Donald Ross, were not only Bay Street powerhouses, but also family friends. Ross had once given Elder a summer job and later covered overdue tuition fees for Elder’s daughter at Lakefield College School (Elder eventually paid him back). “I was greedy,” Sillcox says now. “Michael razzle-dazzled us. Greencool. It had a catchy name. He used the money to live a lavish lifestyle.” His only consolation was that Elder was petitioned into bankruptcy.
That dubious legacy would haunt his next endeavour—a scheme for using the Internet for electronic bill payments. A key investor was Paul D. Phelan, principal of Cara Foods, owner of Swiss Chalet and other restaurant chains. Enticed by Elder’s solemn claims that the new company, Elderhouse Virtual, was about to become a world leader in electronic commerce, Phelan invested $662,232 between 1996 and 1999. The following year, Phelan asked the Ontario Superior Court of Justice to appoint an inspector to examine Elder’s business affairs. Elder, he alleged, had raised funds without disclosing that he was then an undischarged bankrupt—a violation of the Bankruptcy and Insolvency Act.
In 2002, Elder stumbled upon the prospective tablet computer. The CrossPad was a kind of electronic notepad, developed by A. T. Cross and IBM, which could capture and digitize handwriting. The applications were numerous: health care and financial services billing, insurance claims processing, police reporting, and more. The patent was owned by old family acquaintances in New Jersey, the three sons of Dr. Armand Leone—Peter, Mark and Armand Jr.—against whom Elder, in his youth, had competed at equestrian events. The Leones had tried commercializing the invention but failed, and were happy to divest. Elder gave them five million shares—50 per cent of the equity—in his new company, WorkOnce Wireless Corp., and a promissory note for $450,000.
His game plan was simple: hire some tech gurus, manufacture in China, and voilà, he’d have the next BlackBerry. In one blow, Elder could gain wealth, pay off creditors, appease investors and redeem his name. All he needed was $10 million to $15 million for development, which was achievable. After all, he possessed the Elder imprimatur, the key that opened doors to wealthy investment executives, lawyers and patrons who knew his father and respected the family name.
A pretentious addendum adorns Elder’s letters: “Michael J. Elder V”—though by my count, he’s the first Michael on the family tree, not the fifth. His great-great-grandfather, Robert Elder, emigrated from Scotland in 1869, and started a successful carriage- and wagon-making factory near Queen and Spadina. He was succeeded by his son Norman and then grandson Robert. Under Robert, Elder Carriage Works flourished, building delivery vans for furniture movers, bakeries and retailers such as Eaton’s and Simpsons. In 1945 alone, it made today’s equivalent of $5.5 million supplying vehicles to the federal government for the war effort. After the war, the business moved into refrigerated vans and trucks, acquiring Guelph-based Gilson Manufacturing, which made engines and compressors. Demand soared and with it the family’s fortune. Robert’s newfound affluence allowed him to buy what became Elderberry Hill Farm, a vast acreage running west off Yonge Street in the then-hamlet of Aurora, and to take up fox hunting. Two of his sons would become championship riders. Jim competed at seven Olympic Games between 1956 and 1984, winning one gold medal and one bronze; Norman competed in two Olympics, Rome in 1960 and Mexico City in 1968. An eccentric individual with interests in art, anthropology and exotic animals, Norman pleaded guilty in 1997 to sexually assaulting 10 teenage boys and was sentenced to two years in jail. A few years after his release, he hanged himself.
It was left to Jim to carry the family business banner into the fourth generation. On Robert’s retirement, the family sold Gilson to McGraw-Edison, where Jim became a senior executive. His offspring—Michael, Mark, Liz and Erin—grew up at Elderberry Hill Farm and inhabited the rarefied horse world. The story may be apocryphal, but when Michael Elder was once asked how he could so brazenly flout the law by parking on major thoroughfares during rush hour, incurring thousands of dollars in fines, he responded, “My mother always told me, ‘There are no rules for Elders.’ ” Growing up on the farm, all the children learned to ride, and Elder, like his siblings, won honours as a junior equestrian. The girls commuted every weekday to Branksome Hall in Rosedale, while Michael and Mark attended St. Andrew’s College, an elite private school in Aurora.
It was there that Elder forged friendships he would later exploit to promote his tablet, ultimately dubbed the Quillmate. Among them was Garfield Mitchell, chairman of Smoothwater Capital Corporation and nephew of Galen Weston. The single largest creditor, Mitchell anted up nearly $9 million. Deborah Robinson, head of Bay Street HR, invested $170,000. Hard-driving Bay Street mogul David Kassie, CEO of Canaccord Genuity, bought 215,000 shares. Rogers Communications vice-president David Robinson, nephew of the company’s late president and CEO, Ted Rogers, took 56,000 shares. Bay Street mining mogul Ron Goldsack, co-founder of Gordon Capital, liked the concept so much that he invested more than $200,000 and introduced Elder to four colleagues, who also bought in. “I never fully trusted Michael,” says Goldsack, a victim of the earlier electronic commerce venture, “but he had a tremendous idea.”
Astonishingly, Elder raised more than $12 million without ever producing a corporate prospectus. Ontario law stipulates that entrepreneurs may solicit funds from up to 50 friends or family members without issuing a prospectus; Elder has deposited cheques from more than 50; those who heard his pitch likely numbered in the hundreds.
“Here’s how it works with smart money on Bay Street,” explains one WorkOnce investor. “Your buddy says he has a deal—do you want a piece? You don’t even look at it. If he’s in, you’re in. It’s ridiculous. There’s no due diligence. The valuation may be steep, but it if works, it’s huge. You own one per cent of the next Facebook.” The investor, who requested anonymity, wrote a cheque to Elder for more than $50,000. Not six weeks later, Elder came back for more. “I was reluctant. My Spidey sense was kicking in, but I gave him more—maybe $20,000. And a few months later, he again asked for more, and this time, thank God, I said, ‘No more.’ ”
I’ve never attended one of Elder’s pitch sessions, but I’ve listened to a recording of one. Stapled to the folder of one of WorkOnce’s voluminous court records is a CD that contains an audio file, recorded surreptitiously, of a meeting between Elder and two unidentified shareholders. The latter, more than a little tetchy, want an update on the project. They have seen no audited statements, no annual reports, no accounting for the monies raised.
For almost two hours, Elder performs, tap-dancing like Fred Astaire, a maestro of evasion and deflection. His sentences, never quite finished, are sprinkled with qualifiers—“sort of,” “basically,” “about.” He repeatedly clears his throat, interrupts his questioners with bizarre non sequiturs and name-drops with relish. He had dinner with Ted Turner last week; Ted loved the Quillmate. He met Susan Rockefeller, board member of the environmental agency Oceana—“She saves oceans and we save trees.” The CEO of Colgate-Palmolive dropped by for a visit on the weekend. He met with Carlos Rodriguez, CEO of Telmex North America. “Works for Carlos Slim, knows him and all his daughters,” says Elder. There is daylight ahead, Elder promises; all he needs is a little more capital, $10 million max. When the investors ask pointed questions, Elder often changes the subject. What about his trouble in the courts? “I kind of got into a bun fight with a few people,” he explains. “They wanted to steal the idea.” But he assures the share-holders that he’ll deploy new money to buy back shares and to settle those old accounts.
Acting like a feudal overlord—he once declared that he ran WorkOnce “like a dictator”—Elder drafted no shareholder agreement, issued no audited statements, provided no explanations of how investor funds were spent and never appointed a board of directors. As its chairman and sole director, he convened exactly one annual general meeting, in 2004. It ended in disarray, with shareholders hurling insults and demanding to know what had happened to their money. Elder never called another one.
Still, the project lurched forward. Elder retained two Toronto engineers, Robert Smith and Andrew Maxwell, to redesign the device. The technology that had led to CrossPad’s electronic clipboard was already obsolete. Their changes set the stage for later enhancements that equipped the Quillmate with Bluetooth and GPS, and allowed it to capture and process data by voice, photograph, video or barcode, and send it wirelessly to any computer or the cloud.
Although Smith and Maxwell did the heavy lifting, all three men were cited as co-inventors, an arrangement that automatically entitled each to an equal portion of future royalties. But the partnership soon eroded. According to Smith, Elder frequently tried to pay him with uncertified cheques and, on at least one occasion, tried to pass off a cheque embossed with what appeared to be a bank stamp. It looked certified, but it wasn’t. “Every other day, there was another lie.” In 2006, Elder “disappeared like a ghost,” says Smith, and both he and Maxwell assumed the enterprise had reached a dead end.
New consultants came and went, no more happily. Lahav Gil, CEO of the industrial design shop Kangaroo Group, built an early mock-up of the tablet. Gil says he was paid a small part of what he billed, but ultimately abandoned efforts to recover the rest. Court documents show that another advisor, David Howitt, sued Elder for approximately $162,000 in unpaid fees, only to face a counterclaim from Elder alleging that Howitt had defamed him by mentioning the unpaid bills in conversation with WorkOnce investors and consultants. The counterclaim was later dismissed, and the parties settled the original suit out of court.
There was perhaps one moment when the Quillmate might have been within reach of legitimate success. In the summer of 2008, Elder hired former Celestica executives Dan Shea and Michael Augustinavicius. Their professional credentials were impeccable, and they firmly believed in the project. Soon, Elder commenced talks with a subsidiary of Foxconn, the Chinese leviathan that manufactured Apple’s iPhone. Foxconn, with one million employees, was also interested in being a client, as was a Mayo Clinic facility in Florida and the Latin American telecom giant Telmex. Elder even managed to win an audience at the White House, using connections from the equestrian world to demo the Quillmate to Robert Kocher, then special assistant on President Barack Obama’s National Economic Council.
The outlook was rosy enough for WorkOnce to lease new corporate headquarters—7,200 square feet on two floors of an office building on College Street near Spadina Avenue owned by the Toronto businessman and art collector Bruce Bailey. (In letters to prospective shareholders and customers, Elder boasted that the firm enjoyed the use of three floors. The third one was actually the roof—a barren patch of loose stones and air conditioning units.)
Any sense of optimism, however, was soon dispelled. By the fall of 2009, Shea and Augustinavicius were in open revolt, frustrated by Elder’s refusal to pay their salaries or provide detailed accounting information, and incensed that new money was not being funnelled into the business. Although Elder had no official operational role, he frequently intervened, and drained the bank account to pay unexplained expenses. When Shea and Augustinavicius resisted, Elder pushed back, sending a lawyer’s letter accusing them of “tortuous activities (conspiracy, interference of economic relations and inducement of breach of contract).” Elder would later claim that Shea and Augustinavicius had “acted out of spite” and “attempted to usurp authority.” According to court documents, the group finally agreed that cheques would require two signatures. The only problem: there was usually no money in the account. Months later, Shea and Augustinavicius resigned, the former claiming an unpaid salary of $1.8 million.
Elder offered Clarence Chandran, ex-COO of Nortel, the position of co-chair, a move aimed at creating a management buffer. Initially intrigued, Chandran gave Elder a personal loan of $35,000 but, after doing due diligence, never signed on. “I was not impressed,” Chandran says. “The company did not have the depth and breadth needed to enter such a complex market.” Elder never repaid the loan.
By then, at least a dozen shareholders had concluded that Quillmate would never work if Elder remained in control. Two of them even offered him $4 million to reduce his holdings to less than 50 per cent. Other entrepreneurs might have been tempted. Elder saw it as a squeeze play and declined, saying he had $2 million lined up elsewhere, on more favourable terms. If he did, it never materialized.
Meanwhile, Elder’s personal life was in chaos. His first marriage, to an American magazine staffer named Constance Hill, had fallen apart. A bitter and protracted custody battle ensued over their two kids. To provide the appearance of a more stable family life, Elder’s new girlfriend, Suzanne Piercey, appeared at hearings sporting her engagement ring. Elder won full custody of his son and shared custody of his daughter. All three later moved into Piercey’s Rosedale home. “We talked about marriage,” says Piercey, the former proprietor of two tea shops called Say Tea. “But Michael always found a reason to put it off.”
Piercey ultimately committed $508,000 to the WorkOnce venture, her life savings. In 2010, their relationship fractured. “I was tired of the unknown, of his constant obfuscations, his continually scampering around the truth,” says Piercey. When she demanded repayment of more than $20,000 in parking tickets he’d incurred, Elder reportedly responded: “It’s your car, it’s your problem.”
Piercey threw him out, sued for the monies advanced and ultimately won a $465,000 judgment. Four years later, Piercey has a sheaf of Elder’s NSF cheques and is still owed more than $400,000. Incredibly, until recently, the couple continued to dine out and see movies together, and, occasionally, share a bed. Piercey told lawyers during an examination for discovery in 2013: “I hate to tell you, we have amazing sex together. It doesn’t mean we are having a relationship.”
It had come to this: Michael Elder owned patents potentially worth hundreds of millions of dollars and had nowhere to live. His solution was to move into his WorkOnce offices, with his children, despite a clause in the lease expressly barring their use for residential purposes. He brought beds, rugs, even his dining room suite, complete with portraits of his father and himself in full riding gear.
When Bailey tried to evict him for non-payment of rent, Elder appealed to the Landlord and Tenant Board, claiming it was his residence. The appeal failed; the board deemed Elder’s testimony “vague and evasive.” Bailey was out $200,000, plus a small fortune in legal fees. Joining a club with a burgeoning membership, he never recovered the money but did inherit more than 160 boxes of WorkOnce corporate records, abandoned by Elder.
It was rumoured that Elder was then reduced to sleeping in his car under the Colonnade near Bloor and Avenue. He showered at the spa at the Windsor Arms Hotel, cadging morning coffee and croissants. When staff discovered him, they threw him out. Elder promptly emailed owner George Friedmann, complaining about the rude treatment: “I have likely spent over $30,000 at your hotel over the years, and I was just shocked by their attitude.” Friedmann’s decorous reply: “I guess they found it odd that spa showers and the hotel business centre were being used without any arrangements having been made.”
Increasingly desperate for money, Elder had a mutual acquaintance approach Ian Carleton, former VP and director at TD Securities, for a personal loan of $750,000 at 12 per cent interest. Carleton, who declined my request for an interview, insisted on what appeared to be an ironclad guarantee of repayment: the loan would be secured by WorkOnce patents, the company’s sole items of value. If Elder defaulted, the intellectual property would be assigned to Carleton. Almost predictably, Elder did default, and in November 2009, the patents were formally assigned to Carleton. When he sued for recovery of his loan, Elder filed a counterclaim for $50 million. When that was dismissed, the litigants headed for court. Moments before the case was due to be heard, they settled. Carleton is thought to have recovered most of his funds, a measure of recompense few other Elder creditors can claim.
Ostensibly, Ian Carleton still owns the patents. According to sources, he has never formally reassigned them, either to Elder or WorkOnce. Elder has also acknowledged his rightful title, writing to Carleton in an email, “You already have the crown jewels.” Yet in April 2011, according to the U.S. Patent and Trademark Office’s online database, the patents were mysteriously reassigned from Carleton to WorkOnce. How did that happen? Neither Elder nor Carleton is talking. A spokesman at the USPTO told me that “if the proper documentation is submitted by a patent owner or registered practitioner, USPTO views them as valid. There are no requirements that any of the information be uniquely verified in any particular way.” Asked to define “proper documentation,” the spokesman did not respond.
And there are further complications. In 2012, Elder’s Toronto lawyer, Angela Assuras, sued Elder for $500,000 in unpaid legal fees and won. When Elder failed to pay up, the court ordered the patents reassigned to her.
So who really owns the patents? Carleton, Assuras or Elder? Or is it Smith and Maxwell, the co-inventors, who never relinquished their stake in the patents? It will likely take a court to sort it all out. Perhaps more important: when ownership is finally determined, will the patents hold any commercial value? That too is unclear, although Elder continues to raise money for intellectual property he may not actually own.
What does Michael Elder have to say about all this? For public consumption, nothing. Last fall, as I was putting out interview requests, Elder emailed me, offering to abet my research and suggesting mid-December or mid-January for a first meeting. “Perhaps you want to send me some questions in advance and also…interview my CTO and other supporters of Quillmate…What was the inspiration [for your story]?” I agreed to wait until the new year, and asked for his curriculum vitae and the names of other contacts. He sent neither. I explained that a friend of a friend of a friend had triggered my interest in the story, which was the truth. Elder asked for their names. Disclosing sources is not a favoured journalistic practice, I replied. “Understood,” he wrote back. “But I suspect its [sic] from one of our disgruntled employees/consultants…. I hope you will also include the opposite non biased…viewpoint…it would be most convenient to schedule the article with our Quillmate launch.” He also attached a copy of the letter he’d sent five years earlier to Shea and Augustinavicius, accusing them of “tortuous activities.” I interpreted that as an implied threat: cross me and I will sue. I asked him if he had a firm date for the launch. He did not answer. Just before Christmas, Elder wrote again. “Just ran out of time…let’s meet up in the new year.” In late January, having heard nothing, I wrote again. “I am in China at the moment,” he replied. “Happy to meet when I am back…please send along a draft for review and fact check…very exciting developments.” I wrote to Elder again on February 18, suggesting it was in his interest to speak for the record, and I laid out his detractors’ allegations. Three weeks later, he replied, saying he had been “occupied with other matters,” but would be in touch. He wrote again the next day, dismissing the criticisms as “old questions from obvious sources and completely incorrect and non-sense [sic]…there is a simple and satisfactory answer for each.” I asked him to provide those answers, and soon, since my deadline loomed. He did not reply.
Since the introduction of the iPad in 2010, more than 100 versions of various tablets have been released. In 2015, consumers are expected to pay $74 billion (U.S.) to buy some 283 million tablets. Yet 13 years after the patents were acquired, the Quillmate remains locked in a development coma. Elder is ensnared in a quagmire of civil litigation, saddled with millions in unpaid debts. He seems to have been sued by almost everyone professionally connected to him. That includes his old friend Garfield Mitchell, who sued for $8.6 million and won; Mitchell, like many others, has yet to collect a dime. A dozen other aggrieved WorkOnce investors are suing as a group, alleging malfeasance, mis-representation, violations of corporate governance and reckless personal use of their funds. Millions of dollars are unaccounted for. The litigants are seeking Elder’s removal as sole director and $12 million in damages.
Elder promptly counter-sued them for $200 million, claiming that the investors were in league to steal the company. Denying virtually all of their allegations, his defence portrayed a far different reality, in which Elder was chairman, president, secretary, director, head of research and development, VP of marketing and patent consultant, and had been responsible for creating whatever value was attached to WorkOnce.
David Stone, Elder’s former accountant, sued him for non-payment of $165,000 in fees and won, but has received nothing. Elder has even been sued by law firms he retained to defend him in the other lawsuits, including Rueter Scargall Bennett, Roy Elliot O’Connor and Bennett Jones.
Until now, Elder has been largely immunized against public exposure, thanks in part to his investors’ pride. “It’s very embarrassing for people to be caught in this thing,” says Denver businessman John Buckley, a WorkOnce investor, in for $570,000 (U.S.) “It’s an admission of stupidity and of their failure to do due diligence.” Others fear the wrath of Elder’s volcanic temper and litigious spirit. Many ultimately tire of the cost and headache of pursuing him.
Elder regularly compels consultants and investors to sign non-disclosure agreements that bar discussion of any aspect of the business. In one examination under oath, he claimed the NDAs even covered an investor’s discussions with his or her lawyer. The tactic works: the vast majority of those I approached for interviews turned me down, citing their NDA. And both the Toronto police and the RCMP are said to have responded to formal complaints about Elder with a dismissive shrug. Rich people victimized by their own credulity? Tough luck.
However, Elder’s comfort zone may be shrinking. In 2013, Elder retained Mark Procopio, managing director of the private equity house Charollais IM Ltd., to raise new money and restructure WorkOnce. Procopio quickly discovered a series of red flags and walked away from the gig. Before doing so, he contacted the FBI and told them Elder was raising capital without disclosing that his companies were encumbered by judgments. He added: “There appears to be no accounting for the whereabouts of the cash.” The FBI has since interviewed several of WorkOnce’s American investors.
Procopio also put Elder on the radar of the Ontario Securities Commission. Although the OSC declined my request for an interview, its staff are known to be in possession of a report prepared five years ago by Bruce Burton, a retired chartered accountant, former CFO of Dundee Precious Metals and a small WorkOnce shareholder. Hoping to prove his company was financially solid and acquire ammunition for pitches to new investors, Elder gave Burton access to corporate ledgers. When he was finished, Burton refused to submit the report until he was paid. Elder refused to pay him until he read the report. Burton was never paid, and Elder to this day has not read it. Its contents are said to be explosive.
Elder now touts the Quillmate’s paperless technology as the solution to global warming—and more. For the past two years, he’s spoken at the Infopoverty World Conference in New York, an annual gathering of legislators, academics and do-gooders trying to harness digital technology to combat poverty. If Elder looked incongruous in such a setting, he didn’t care. During his five-minute speech this year, he told delegates that his device “offers a completely new, sustainable paradigm to improve the destinies of countries and populations and assist in the fight against poverty, inequality and corruption.”
His speech ended with an affirmation of Quillmate’s “commitment to corporate social responsibility” and its “high standards governing how we conduct our business.” Not a single unit of the Quillmate has ever been sold, but in recent emails, Elder says he’s close to raising another $10 million, some from Canadian government sources, and boasts of plans to buy a corporate headquarters. These claims could not be verified.
Was Elder ever committed to bringing his patent to market, or was the Quillmate, as many people now allege, an elaborate scam, his private ATM? Does he actually believe the hype he indefatigably spins, or is he simply a charming sociopath? And where did all the money go? “Many times,” says his former partner Suzanne Piercey, “we’d walk into a place and I’d have to settle his bills from years before I knew him.” One recent investor says he’s never seen Elder offer to pick up even a lunch tab. Another insists that Elder once agreed to buy a $10,000 table for a charity event, then reneged on the donation. Perhaps, as one statement of claim alleges, the funds are parked offshore. Piercey says she and Elder travelled frequently abroad, and, almost everywhere they went, “Michael opened a new bank account, everywhere but Abu Dhabi.”
Documents show that Elder incorporated a company called Eldershire Limited in Bridgetown, Barbados, in December 2008, appointed himself president, and opened an account at DGM Bank and Trust. Five months later, he wire-transferred $55,000 (U.S.) into an Eldershire account from one of his private companies in Canada. This was May 2009, just as Shea and Augustinavicius were desperately seeking new operating capital.
Surveying the wreckage, many victims are trying to put their anger behind them. “I’m disengaged,” says a weary Armand Leone Jr., co-owner of the original patent. He’s received a mere fraction of the $450,000 promissory note he was given and doubts he’ll see more. “Mentally, I’ve written this off. It’s not a pleasant thing to think about.”
“It’s an ugly mess,” says Piercey, who threw Elder out again in January 2015 after briefly resurrecting their relationship. “I’m cutting my losses. I lost my home because he borrowed all my money and I could not afford the house. He has stolen my future and my children’s futures. Michael has such talent but just doesn’t put it to the right use.”
Others say it’s the lost opportunity that rankles most. “My loss, $75,000—the quantum is small,” concludes one WorkOnce investor. “But the saddest part of all of this is that Elder, as smart as he is, was stupid. I don’t think he really understood what he had. He had a fantastic product. He was seven years ahead of the world. He could have made $500 million—just for himself.”