Advertisement

Ontario man returned to Canada to face charges in $56M debit terminal Ponzi scheme

Ontario's Serious Fraud Office says the scheme started in 2012 in Barrie, Ont., and that more than 500 known victims suffered losses of more than $24 million.
Ontario's Serious Fraud Office says the scheme started in 2012 in Barrie, Ont., and that more than 500 known victims suffered losses of more than $24 million. File Photo

A Barrie, Ont., man has been deported to Canada from the Dominican Republic and charged following what’s believed to be a $56-million debit terminal Ponzi scheme that defrauded hundreds of victims.

Ontario’s Serious Fraud Office (SFO), which investigates and prosecutes complex fraud and financial crimes, says the scheme started in 2012 in Barrie and that more than 500 known victims suffered losses of more than $24 million.

Read more: 73-year-old Calgary man charged in multi-million-dollar Ponzi scheme: Alberta RCMP

The SFO started investigating the scam, which involved the sale of point of sale debit terminals, in September 2018.

Victims of the Ponzi scheme believed they were investing in a company called Debit Direct that would distribute debit terminals to businesses across Canada and the U.S.

Story continues below advertisement

A Ponzi scheme is a fake investing scam that promises high returns with little risk to investors. Instead of putting money in the investment that was originally promised, the original “investor” takes it for themselves.

Then, when other investors want to withdraw money, they’re given funds from other newer investors.

The SFO says victims were led to believe they would receive a 15-cent-per-transaction royalty on each purchase made through their point-of-sale debit terminals.

Click to play video '3 men arrested in $364 million ponzi scheme' 3 men arrested in $364 million ponzi scheme
3 men arrested in $364 million ponzi scheme

“Victims were unaware that the point-of-sale terminals never actually existed,” the SFO adds. “Any ‘profits’ they received (were) actually obtained from money invested by new ‘investors.'”

According to the SFO, the victims initially came forward with complaints to nine different police agencies across Canada, including the RCMP, Toronto Police Service, Calgary Police Service and Barrie Police Service.

Story continues below advertisement

As a result of the investigation, Charles Debono, 62, was charged with fraud over $5,000, laundering crime proceeds, bribery of an agent, personation with intent, and using, dealing and acting on a forged document.

When Debono was deported from the Dominican Republic to Canada, he was arrested by Ontario Provincial Police on arrival.

Read more: Second man arrested in alleged Ponzi scheme that took in nearly $1 million: Toronto police

As part of the investigation, the SFO says about $1.5 million is being held in Canada as “proceeds of crime,” while other countries are looking at similar measures.

According to the SFO, restitution is also being sought on behalf of the victims.

Debono was remanded into custody and will appear at the Ontario Court of Justice in Barrie on Monday,

The investigation was initially referred to the OPP’s anti-racket branch in March 2018 before it was transferred to the SFO, which was established just last year.

The SFO is encouraging victims of the debit terminal Ponzi scheme to come forward and provide their information to investigators at sfo.project.debitdirect@ontariosfo.ca.

Click to play video 'TD Bank tied to major Ponzi scheme' TD Bank tied to major Ponzi scheme
TD Bank tied to major Ponzi scheme