Canadian Police Shutter Alleged Ponzi Scheme

A very powerful cognitive bias leads us to believe that we somehow pop out of the womb fully able to recognize a competent scam, when we have to learn how to do everything else.

Through more than two decades of swimming in an ocean of sociopaths, career criminals, bunglers, and reckless stockbrokers, I’ve learned a few things about investment fraud. For purposes of today’s post, I’ll share three of those observations (as Jimmy Durante used to say, “I’ve got a million of ‘em”).  First, fraud is global. It happens as much in Japan, Russia, and South Africa, per capita, as it does in the United States. Second, fraud never slumps, but adapts to the current economic environment.  Third, fraud is ever evolving and always becoming harder to spot.  A recent case out of Canada validates all three of those observations. According to thespec.com: (more…)

Alberta Regulators Halt Alleged Bridge Financing Ponzi

If you know of an investment making the same claim, please report it to local regulators.

TransCap Corporation came into existence in 2001. Operating from headquarters in Calgary, Alberta, it traded bonds and provided bridge financing.  A related company, Strata Corporation, came along in 2008 with a stated purpose of raising funds to loan to TransCap. The Alberta Securities Commission alleges that both companies were part of a Ponzi scheme that reaped more than $50 million. According to SunNews: (more…)

Man Who Defrauded Nova Scotia Investors Still on the Lam After Five Years

Were there any red flags here that a vigilant investor might have seen and heeded?  Sure; there always are.

Accused Ponzi scamster Quintin Sponagle allegedly used a Panamanian corporation, Jabez Financial Services Inc., to run his scheme.  He had investors write checks to Jabez. He deposited those checks, then spent the money as if it were his own.  The Nova Scotia Securities Commission is holding a hearing into the activities of Jabez.  But, there is one key witness who won’t be at the hearing — Sponagle.  When he sensed the authorities closing in, he fled, and no one has heard from him in five years.  They’ll catch him eventually.  They always do.

According to The Chronicle Herald: (more…)

Study Reveals the Pain of Investment Fraud

What keeps many from protecting themselves from this pain is the persistent, hardwired belief that such tragedy will never happen to them.

A group of seven senior citizens calling themselves the Earl Jones Fraud Assistance Information and Assistance Service has studied the impact of investment fraud on the victims.  (Earl Jones is the Montreal businessman sentence to 11 years in prison for running a decade-long Ponzi scheme which robbed more than 180 victims of more than $45 million).  Funded by the Quebec Ministry for the Elderly, the study shows the painful human toll that investment scams take from those who lose their life savings to those scams.  Covering the study for TheSuburban.com, Ian Howarth writes: (more…)

Police Suspect a Possible Affinity Fraud Ponzi Scheme in Suburban Montreal

The fraud that we like to believe will never draw near to us is as prevalent as pollen in the springtime and as close as our next door neighbor.

Joel Goldenberg of TheSuburban.com has written an article about police suspicions that a Hampstead, Quebec resident has been operating a Ponzi scheme, possibly targeting Orthodox Jews. Specifically, Goldenberg writes that Perry Newman and his company, Dover Financial Corp. (Dover), are drawing scrutiny from the Montreal Police.  Goldenberg’s article is helpful, because it describes an all-too-common scenario in which an investor learns that what she thought was a comfortable nest egg is gone. Quoting extensively from involuntary bankruptcy petitions filed against Newman and Dover, Goldenberg writes: (more…)

Justice Department Charges Former Bank Robber with Running a Global Ponzi Scheme

Federal prosecutors in Illinois have alleged that Nicholas Smirnow (aka Nicoloy Smirnow, Alexander Judizcev, Nicholas Kachura and Jeff Prozorowiczm) used the internet to defraud more than 40,000 on six continents, in 118 countries, and in 48 of the United States out of more than $70 million.

In a reminder of just how small the world has become, federal prosecutors in Illinois have alleged that Nicholas Smirnow (aka Nicoloy Smirnow, Alexander Judizcev, Nicholas Kachura and Jeff Prozorowiczm) used the internet to defraud more than 40,000 on six continents, in 118 countries, and in 48 of the United States out of more than $70 million.  The alleged Ponzi scheme, called Pathways-2-Prosperity, promised massive returns for short-term investments (seven days to 60 days). (more…)

Ninja Appears in Ponzi Case

Those who operate these scams have imaginations as big as their appetite for money.

In September 2009 we wrote a three-part blog series on the Syndicated Gold Depository, S.A. (“SGD”) Ponzi scheme,which bilked more than $100 million from more than 3,000 investors across the globe.  According to the Royal Canadian Mounted Police (RCMP), Gary Sorenson and Milowe Brost lured people into investments in SGD which was supposed to loan investor money out to another company, Merendon Mining Corp. Ltd., (MMC) at interest rates that would provide a healthy return for investors.  The SGD scam operated for more almost ten years, from 1999 to 2008.   The RCMP arrested Brost but took longer to track down Sorenson who had a home in Honduras.   (more…)

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