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.
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.
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.
“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.
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.
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.