Gilles Savard has survived a lifetime of trouble in 69 years.

As a Canadian bush pilot, he walked away from three plane crashes, once carrying his severed fingertips in his pocket so they could be sewn back on four hours later.

As a Honduran businessman, he endured the sting of failure, struggling to make ends meet in a desperately poor country.

But as a partner with Gary Sorenson, he survived more intricate hardship.

Savard holds the dubious distinction of being one of the first Canadians to lose money in Merendon Mining Corp. Ltd., a company he helped create in Calgary with Sorenson--and a firm now in the crosshairs of investigators who are trying to unr av e l what RCMP say is Canada's largest Ponzi scheme.

"Me and my wife lived in a shack and the only water was a pipe sticking out of the ground," Savard says of his early days in Honduras, after walking away a decade ago from Merendon Mining and a$250,000 cash investment in the mining company.

This week, Gary Sorenson returned to Calgary to face charges that he helped mastermind an elaborate investment plot, one that police alleged siphoned up to $400 million from more than 3,000 investors.

Money was funnelled through a series of offshore shell companies and flowed --directly or indirectly--to Sorenson, Merendon Mining or its subsidiary corporations, police and Revenue Canada investigators allege in court documents.

"The big question," says former Merendon Mining director and original shareholder Jack Monkman, "is how much went into the company and how much went into Sorenson's pockets."

Sorenson, chief executive of Merendon Mining Corp., maintains his innocence and defends his business as a legitimate enterprise, one that searched for minerals throughout Central and South America while running a refinery, jewelry store and a luxury resort in Venezuela.

These operations are owned or operated by Merendon, a firm Savard helped establish in 1996 as a junior mining company based out of Calgary. It all began with a rock sample revealing high concentrations of gold and a belief that a motherlode lay beneath the earth in the forests of Honduras.

At the time, Canadian investors were bedazzled by tempting mining plays like Golden Rule Resources, Cartaway Resources and Bre-X Minerals, whose supposed enormous gold deposits deep in the Indonesian jungle turned out to be one of the largest stock market swindles in history.

But the partnership between Savard and Sorenson went bad within a year. "I didn't want any part of it," he says.

Savard says he walked away from his investment when the company had little more than a dredger and permit to "look around," leaving Sorenson to take the helm and solicit new shareholders.

"All you had to do was mention gold in a foreign country, and people lined up around the block to give you money," Sorenson told the Herald last week after surrendering to Mounties to face theft and fraud charges.

Four years after launching the company, Sorenson ran afoul of Alberta securities regulators, who slapped him--and two of Merendon's directors--with a$5,000 fine for not following their rules on raising funds.

Since then, his legal troubles have grown.

It is alleged by Canada Revenue Agency, one of the authorities investigating, that $92 million of investor funds were funnelled directly or indirectly to Sorenson or companies controlled by him between 2000 and 2005.

"A large portion of the money, after funnelled through various corporations, ended up being invested in Merendon, which in turn lent the money to its Central American subsidiaries," according to an information to obtain search warrants in a Canada Revenue Agency investigation related to the case.

The tax agency alleges Sorenson was the main beneficiary of an RRSP strip scheme, a plot in which investments are falsely promoted as being eligible for registered retirement savings plans or registered retirement income funds.

Today, people are lining up to get back the money that police claim was stolen by Sorenson and his co-accused, Milowe Brost, who investigators allege together swindled some 3,000 investors in the nine-year Ponzi-like scheme--accusations Sorenson intends to vigorously fight.

"I didn't have to come here," says Sorenson. "I came here because I believe in the system and I intend to use the process to defend myself."

In Honduras, a sprawling mansion is nestled between a towering pine forest in the hills outside Tegucigalpa, protected by a walled perimeter and armed guards at the front gates.

The expansive property first gained notoriety in the country because it was believed to be owned by a drug dealer and built with the ill-gotten gains from the drug trade.

It was later bought by Sorenson, who until recently lived there with his Honduran wife and children, two of whom are believed to have been adopted by the couple.

Described by visitors as a palace, the house boasts a long, Tudor-style dining hall, massive home theatre, and an infinity edge pool outside that blends in with the horizon of the surrounding green hills.

The private estate is also the place where potential investors were sometimes wined and dined, before touring a facility where they were enticed by watching the melting of a gold bar.

According to a police affidavit, one mining expert reported this was merely a staged show, with Sorenson using the same gold bar over and over--something Merendon flatly rejects.

Honduras, an impoverished and politically unstable country in Central America, became the hub of Merendon's operations over the course of the last decade.

The company, says Sorenson, spent $1.5 million on exploration on a concession it held in 1996.

"We never, ever took that project into mining potential," he says.

Instead, construction was launched on a refinery because, Sorenson explained, Honduras is a "prolific gold-producing region with native gold in the rivers."

The company, which also opened at least two high-end jewelry stores, intended on buying gold from the locals at a discounted rate before refining it at a profit.

But that didn't pan out as planned.

Former company director Owen Hoffman, who looked after the books in Honduras but was later fired, told investigators that "95 per cent of what he witnessed Sorenson tell investors and other employees were lies," according to a summary of his police statement contained in court documents.

Sorenson has a different recollection.

He says the catastrophe of hurricane Mitch that hit Honduras in 1998, a country bordered by oceans on either side, prevented the company from buying gold from panners, as it had planned.

"The rivers were just destroyed, so we had to do something else. So we started looking at other ways to develop the company and carry on. And we found the project in Venezuela," says Sorenson, referring to a mining operation the company says it has in the South American country, where it also owns a luxury fishing resort.

In Honduras, Merendon once held gold concessions and permits for exploration but in more than a decade an actual mine was never developed, a point Sorenson acknowledges.

In an interview with police, mining expert David Edwards said that based on his 16 years of experience in the gold industry, Merendon Mining owns legitimate assets and operations, "but in no way do they equal the millions of dollars invested, nor do they match the 19 per cent compounded per annum increase needed to match investors' equity."

Merendon, though, disputes this assertion in its own court filings.

For his part, Sorenson won't reveal how much gold his mines in Ecuador, Peru and Venezuela produce annually, or the income of his companies, calling it a sensitive security issue.

"I won't put that in the press," he says.

But he maintains that Merendon is a viable company.

"You can go on the Internet and you can look at Merendon Mining Corp.'s website. You can look at Venezuela, you can look at Ecuador, you can look at Peru . . . you can look at all the different assets of that company, as well as Merendon too," he says, referring to a website that is now password-protected and unable to be viewed publicly.

"And when you do that, I guess you ask yourself a question: This is either the most elaborate, creative website of nothing -- or is there some viability to it?"

Sitting in a Calgary restaurant last week, sipping on a cup of coffee hours after taking a private jet from Florida to turn himself into RCMP, Sorenson moves quickly over the details of his 66 years and storied career.

Born Sept. 6,1943, in Edmonton, Sorenson lived in Alberta until 1961, when he moved to the Northwest Territories and began work at what he recalls "a young age."

He learned about gold mining, not as a professional geologist, but as a miner working underground.

"Hard-rock gold mining," says Sorenson. "I've done everything in a mine that you can possibly think of doing."

After years in the mining business, Sorenson turned his attention to another valuable resource: real estate. By his own account, he went into property development in the Okanagan and had other real estate interests abroad, in the United Arab Emirates.

"I was representing some members of the royal family out there in real estate. I was involved and I'd rather not discuss that, quite frankly," says Sorenson.

In 1985, he declared bankruptcy, with debts of $1.5 million and assets of only$7,500, according to Canada's bankruptcy registry.

Within five years, Sorenson had moved into the financial industry, working for the Canadian Investment Corporation Ltd., where, according to a filing with the U. S. Securities and Exchange Commission, his responsibilities included directing corporate development.

In 1996, he moved into Merendon and eventually took up residence in Honduras with a new wife and her children.

As Merendon evolved, Sorenson's stature in the country grew.

Aside from a palatial hillside estate outside the capital of Tegucigalpa, Sorenson and his wife Thelma have apparently amassed a small real estate empire that also includes a vast swath of prime land in the agricultural district of El Zamorano and a nearby ranch.

For a Calgary businessman who needed to borrow money to buy groceries when he first arrived in Honduras and who reported an income of $7,200 for the 2000 tax year, Sorenson became well known among the country's elite.

The Canadian had a penchant for swanky parties and fine horses, according to other expatriates who live there.

Sorenson's primary home is an expansive and palatial property located on the skirts of the capital city, tucked away off the main highway and situated within a private, gated and guarded development that has about 70 homes.

All of the residences located within Villa Elena, a private ecological reserve, would be considered mansions by Canadian standards, let alone those of the average Honduran --the second-poorest country in Central America with half of its eight million people living in extreme poverty.

Within the gated development are more gates, with luxury homes tucked away behind walled compounds. It is described as "the most exclusive residential site in the capital."

Sorenson's fortress sits high above a country club at the bottom of the hill, featuring a nine-hole golf course, tennis courts and large swimming pool.

He's seen here as a man with wealth, power and influence. His security detail further fuels that perception.

One Canadian businessman reports that Sorenson often travels in a motorcade, with Lincoln Navigators carrying him along with as many as 30 armed escorts.

Several years ago, Sorenson started buying rural property in the luscious valley east of Tegucigalpa in El Zamorano, an agricultural area known for its orange production and mostly inhabited by small landowners and farmers.

The large man with the shock of white hair came to the attention of locals after snapping up a massive piece of prime farm land, Finca Yeguare, along the main road. Construction soon began on a massive, three-kilometre stone perimeter fence.

There are two more pieces of land nearby on the road to the hillside town of Guinope. One of them has a new house and the other is a small ranch, CalHo Farms. It is a stable with fine horses that were imported from Peru.

Residents are curious about the source of Sorenson's money, but reluctant to speak about him.

Sitting in his tiny but tidy rural office outside the small city of Choluteca, near the Nicaraguan border, Savard reflects on the early days of Merendon and its chief executive, Sorenson.

He wonders why the concession in Honduras where the pair once believed a mother-lode existed was never fully developed.

"There's a lot of gold there," says Savard, whose office wall is adorned with a map displaying gold bars in areas of the country believed to be rich in alluvials.

Though he owns his own construction business about 50 kilometres from the capital, Savard says he lives like a Honduran, on a meagre salary and modest means--a vastly different lifestyle than that of Sorenson.

Though he has no regrets about leaving the company behind, Savard insists Merendon had great potential. Had the company developed a mine in Honduras, as it was originally envisioned, he contends the story would have had a fairy tale ending for everyone.

"But I don't feel remorse because I did the right thing."

sWilton@theheralD. CanWest.Com