Red Deer RCMP have charged a man after officers uncovered a Ponzi scheme that allegedly defrauded victims in Canada and the U.S. of $10.2 million in what officers say may be the “largest fraud file in central Alberta.”
The United States Secret Service was involved in the investigation, along with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the Red Deer RCMP financial crimes unit.
Mounties allege the owner of Silvertip Energy Inc. sold and rented light towers with the same rental number to multiple investors. It’s alleged he also sold and rented units that had never been 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 Cst. William Lewadniuk, with the Red Deer RCMP financial crimes unit.
“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.”
Police said at least four corporations in Canada and the U.S. fell victim to the scheme, with losses tallying $6.2 million.
Five people also reported losses of about $4 million.
Police laid charges after a 20-month investigation which led officers to a home on C&E Trail, north of Red Deer, on Dec. 19.
Joshua James Tenhove, of Red Deer, faces a string of charges including three counts of fraud over $5,000 and one count each of possession of property obtained by crime over $5,000 and laundering the proceeds of crime.
He is scheduled to appear in court on Jan. 15, 2018.