CALGARY – A Calgary jury has found two men guilty in what authorities have called the largest Ponzi scheme in Canadian history.
After a five month long trial and three days of deliberations the jury came back with guilty verdicts Saturday against Gary Sorenson and Milowe Brost in an elaborate scheme where investors were brought in and promised unrealistic returns.
Sorenson, 71, and co-accused Brost, 61, had pleaded not guilty to two charges each of fraud and theft. Brost was also charged with money laundering. The two men were arrested in 2009.
Ponzi schemes involve taking funds from new investors and using them to pay old ones.
Police said investors around the world lost between $100 million and $400 million in the scheme. The Crown says many lost their life savings, retirement plans, even equity in their homes.
The prosecution has indicated it will seek the maximum sentence of 14 years in prison. Both men had remained free on bail but were ordered kept in custody prior to a sentencing hearing expected next week.
During the trial the Crown argued that the money invested was never really safe and new money was used to pay out the earlier investors.
One set of fraud and theft offences took place between 1999 and 2008 and involved companies named Syndicated Gold Depository SA, Base Metals Corporation LLC, Bahama Resource Alliance Ltd. and Merendon Mining Corporation Ltd.
More wrongdoing took place between 2004 and 2005 with a company called Strategic Metals Corp.
Investors were promised a 34 per cent annual return on an investment of $99,000 which was supposed to grow to $1,035,000 within eight years.
They were told that the business involved selling gold for refining and that the deal was “low risk.”
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