Ponzi scheme

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Ponzi schemes and other fraudulent arrangements that operate on a large scale often involve complex networks of activities, actors, and funds transfers. Given the number of players that may be required to bring about such a scheme, the tort of civil conspiracy provides a potential means for recovery for fraud victims.

The elements of civil conspiracy: Simple motive or unlawful means?

As outlined in the Supreme Court of Canada’ decision in Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd. civil conspiracy in Canada is comprised of two related but distinct categories.  The first category is the “lawful means” or “simple motive” conspiracy, and the second is the “unlawful means” or “unlawful conduct” conspiracy.
Continue Reading Using the tort of civil conspiracy

A panel of the British Columbia Securities Commission has imposed an administrative penalty of $33 million against Rashida Samji for committing a $100 million fraud on at least 200 investors in its recent sanction decision. The scheme which the panel determined was a Ponzi scheme earned her the nickname the ‘magic lady’. The panel also ordered that Samji be permanently banned from participating in B.C.’s capital markets and ordered disgorgement of aproximately $10.8 million. This was the difference between the monies deposited by the investors pursuant to the fraud and the monies paid out to them.
Continue Reading ‘Magic Lady’ ordered to pay $43 million for running Ponzi scheme in British Columbia

Under section 380.1(1) and (1.1) of the Criminal Code, courts are required to consider the following non-exhaustive list of factors as being aggravating circumstances in the context of fraud:

  • significant magnitude, complexity, duration or degree of planning of the fraud;
  • an actual or potential adverse effect on the Canadian economy or financial system, or on investor confidence;
  • large numbers of victims, particularly if the fraud had a significant impact due to the victims’ personal circumstances;
  • failure to comply with applicable professional standards;
  • concealment or destruction of documents related to the fraud; and
  • whether the total value of fraud exceeds one million dollars.
    Continue Reading Imprisonment for Ponzi Schemes: How long is long enough?