Southern Alberta man charged in alleged ‘gifting circle’ scheme extending into 3 Western provinces

A southern Alberta man is facing charges in an alleged pyramid-type scheme that police say extends into Saskatchewan and British Columbia and has generated huge losses.

Lethbridge police say so-called gifting circles were introduced in Lethbridge, Calgary and Edmonton between September 2018 and this May.

The circles promise a return of $40,000 in exchange for a gift of $5,000 and the donor must then recruit two more people to kick in funds, but investigators say money is lost when new recruits cannot be found.

Witnesses say there are currently more than 500 members and 80 gifting circles — numbers investigators say would involve losses totalling $2 million.

Get breaking National news

For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.

Sign up for breaking National newsletter Sign Up

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

Steele Cameron Tolman, a 57-year-old Coaldale resident, is charged with fraud over $5,000 and possession of the proceeds of crime over $5,000.

Tolman has been released from custody and is scheduled to appear in court May 17.

Police warn that anyone within a gifting circle receiving monetary gifts or payment may be in possession of property or proceeds of crime, which could result in charges.

They said that anyone promoting the scheme and recruiting members could also face prosecution.