A Calgary trial is nearing conclusion on criminal charges against Gary Allen Sorenson (“Sorenson”) and Milowe Brost (“Brost”) relating to an alleged $300 million Ponzi scheme that operated between 1999 to 2008 with money from thousands of investors across the United States and Canada. The alleged scheme was orchestrated utilizing the sale of promissory notes issued by Syndicated Gold Depository, Inc. (“SGD”), an entity formed in 1999 by Sorenson and Brost. The two men were arrested in 2009 for what police called “the largest Ponzi-type scheme” in Canadian history.
Michael Nowina’s litigation practice focuses on a broad range of commercial disputes including advising on the recovery from fraudulent investment schemes, mortgage fraud and credit fraud. Michael’s fraud-related and investigations experience includes representing victims of a Canada-wide investment fraud and ultimately securing recovery of a majority of the proceeds from the fraud, advising numerous creditors in proceedings commenced to recover fraudulent conveyances and preferential payments in multi-jurisdictional litigation, and representing financial institutions in identity fraud cases and in proceedings to recover funds from fraudulent borrowers. Michael also frequently advises clients on insolvency matters involving fraud.
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?
The RCMP’s Greater Toronto Area Financial Crime team has arrested and charged six people in an alleged fraudulent investment scheme. The RCMP has reported that the alleged fraud worked by enticing investors to purchase business tax losses valued far in excess of their investments. The companies used by the accused included: Integrated Business Concepts (IBC), Synergy Group 2000, Cason Global Wealth Association (CGWA) and IBCA 2009.…
Continue Reading RCMP arrest six in alleged investment fraud
In Hryniak v. Mauldin, released January 23, 2014, the Supreme Court of Canada upheld the finding of fraud against Toronto businessman Robert Hyrniak on a summary judgment motion. The unanimous SCC found that a shift in culture is needed to embrace summary judgment motions as an alternative model of adjudicating disputes. The SCC ruled that findings of fraud can be made when the judge is able to reach a fair and just determination on the merits on a summary judgment motion. This will be the case when the motion:
- allows the judge to make the necessary findings of fact;
- allows the judge to apply the law to the facts; and
- is a proportionate, more expeditious and less expensive means to achieve a just result.
In a call to action to improve access to justice, the SCC also called upon lower court judges to take a more active role in case-managing disputes by seizing themselves of cases where they have dismissed a motion for summary judgment. This is a significant departure from current practice. …
Continue Reading Summary judgment for investment fraud upheld by Supreme Court of Canada
Our litigation team recently secured a $10.3 million judgment in fraud. On the strength of accounts receivable and appraised assets, HSBC extended loans exceeding $10 million dollars to a trucking company called Turbo Logistics Canada Inc., operated by defendants, George Perlin and Alex Ber. The trial judge, Justice Mesbur, found that unbeknownst to HSBC, there were two other companies using similar names and reporting the same accounts receivables and appraised assets to TD Canada Trust for loans from that bank. These two companies were operated by family members of George Perlin and Alex Ber. Our team secured judgments in fraud against George Perlin and Alex Ber for $10.3 million, as well as judgments for conversion and conspiracy against the two companies and one of the individuals running it.…
Continue Reading Commercial List fraud trial ends with $10.3 million win for HSBC
Vancouver resident Rashida Samji, 60, was arrested after an investigation by RCMP Federal Serious and Organized Crime Unit and Vancouver Police uncovered a scheme potentially stretching back to 2003. She earned the nickname “magic lady”…
Continue Reading ‘Magic Lady’ in British Columbia faces criminal charges related to alleged ponzi scheme
The Globe and Mail reported on the sentencing of investment manager Terrence Bedford who received a sentence of two years in prison after he was found guilty of running a fraudulent trading scheme that cost…
Continue Reading Investment manager gets two-year prison term for fraud
SA Capital Growth Corp. v. Mander Estate dealt with the thorny issue of whether a court-appointed officer, in this case a Receiver appointed to sell the assets of an insolvent entity, had a legal obligation to disclose information that it had obtained to an individual who was facing serious allegations under Ontario’s Securities Act. Justice Pattillo of the Ontario Superior Court decided that a receiver is generally not required to produce the details of its investigations or the documents in its possession to parties that are inside or outside of the receivership. However, since the accused has the right under s. 7 of the Charter of Rights and Freedoms, to make full answer and defence to a criminal allegation, this right entitled him solely to information that is “likely relevant” to the criminal charges against him.
The Ontario Court of Appeal found that it was inappropriate for the Superior Court to make what amounted to an interim procedural order in relation to a proceeding pending before the Ontario Securities Commission (OSC). As a result, it was left for the OSC to decide whether third party production was appropriate.…
Continue Reading Documents uncovered during fraud investigations
Each year, the World Bank releases a list of firms and individuals deemed ineligible to be awarded a World Bank-financed contract due to the companies having been sanctioned under the Bank’s anti-fraud and corruption policy. …
Continue Reading The World Bank “Blacklist” – Canada tops the charts in 2013