It was supposed to put Nova Scotia on the high-tech map. With its educational software, Knowledge House was going to change the way students learned in the classroom and make its investors rich along the way.

The company was worth $100 million one year. It disappeared the next amid accusations of stock swindles and coverups.

Hundreds of court documents have been filed

The collapse of Knowledge House more than two years ago is the subject of a criminal investigation and a blizzard of lawsuits. They include more than a dozen defendants, the region's biggest law firm and the National Bank.

Stockbroker Bruce Clarke was fired for his role in Knowledge House. Provincial taxpayers lost close to a million dollars on a product that was never delivered.

The fallout continues to plague hundreds of smaller investors, including Craig Dunham of New Minas.

Craig Dunham

In the past year, Dunham has managed to track and analyze almost every trade in Knowledge House shares. He's obsessed with the idea he lost his business – and he could lose his dream home overlooking the Minas Basin – because he may have been a victim of a stock manipulation scam.

Dunham owes $362,000 to the National Bank's brokerage firm. Four years ago, he sold a company that did $3 million worth of business a year selling Apple computers to schools and universities.

All that's left of his four stores today are some worthless shares in Knowledge House. Instead of taking cash for his company, Dunham took a five-year job and $600,000 worth of stock in the company.

Dunham says he wasn't greedy as much as dazzled by the pedigree of Knowledge House principals.

Dan Potter was featured in the magazine Atlantic Progress

"The players involved – you've got the National Bank, the sixth biggest bank, Stewart McKelvey the largest firm in Atlantic Canada, Dan Potter who's won accolades for his work at ITI. He's seemingly doing great things with Knowledge House. Why wouldn't you believe this is a legitimate offer?"

When Dunham joined the Knowledge House team, company president Dan Potter was making similar overtures to the partners of several Silicon Island companies in Cape Breton. They had larger contracts to supply IBM computers to Nova Scotia schools.

All four partners were paid in Knowledge House shares and each offered jobs and titles worth $100,000 a year.

It was an offer they should have refused.

Three of the four partners ended up with worthless shares and big debts of between $1 million and $2 million each to National's brokerage.

Unlike Dunham who quit early, the Cape Bretoners are being sued by the brokerage for their alleged role in a stock manipulation scheme. It's yet to come before a judge.

Brokerage