Red Deer RCMP make arrest in suspected $10-million Ponzi scheme
A Red Deer man is facing fraud and money laundering charges in what Red Deer RCMP say may be the largest Ponzi scheme bust in central Canada.
“I believe this may be the largest fraud file we’ve seen in Central Canada,” Const. William Lewadniuk with the Red Deer RCMP financial crimes unit said in a Thursday release.
Red Deer RCMP began investigating in April 2016 after receiving reports of the suspected fraudulent rental of mobile light towers by Silvertip Energy Inc.
Investigators allege the same portable light towers were sold or rented to multiple investors and the company sold or rented other units that were never manufactured.
“This is an example of a Ponzi scheme, where the same light towers were bought and rented numerous times on paper, on behalf of a number of different investors,” said Lewadniuk in the release. “Each level of a Ponzi scheme includes re-selling the same items to new investors, then paying a portion of that money to previous investors as if it were dividends. Ponzi schemes are like pyramid schemes in that they rely on continually bringing in new investors in order to keep the previous ones from discovering the fraud.”
According to police, five individual investors are believed to have lost $4 million while at least four corporations from Canada and the United States lost a combined $6.2 million.
Red Deer RCMP worked closely with the Secret Service in the United States and the Financial Transactions and Report Analysis Centre of Canada (FINTRAC) on 20-month long investigation.
Investigators executed a search warrant at a Red Deer home on Tuesday, seizing documents and electronics.
Joshua James Tenhove, 45, has been charged with three counts of fraud over $5,000 and two charges of laundering the proceeds of crime. Tenhove is set to appear in Red Deer provincial court on Jan. 15, 2018 at 9:30 a.m.
Categorised in: Canadian News