RCMP officers have laid charges in a Ponzi scheme that raised over $100 million from Alberta, US and international investors between 1999 and 2008.
Police arrested 55-year-old, Milowe Allen Brost of Chestermere on Sunday and are still looking for a second man, 66-year-old, Gary Allen Sorenson of Calgary.
Investigators believe Sorenson may have left the country.
Both men are charged with fraud over $5,000 and theft over $5,000 under sections of the Criminal Code of Canada.
The arrests are a result of an extensive investigation by the RCMP's Integrated Market Enforcement Team (IMET) over the last 3 and half years.
According to police, Brost and Sorenson founded a company, Syndicated Gold Depository S.A., based on gold commodities. Their company then formed a loan agreement with Merendon Mining Corporation Ltd., with the promise of a high rate of return.
The high rate of return and promises of tax advantages was used to lure investors into putting their money into offshore shell companies such as: Asset Trax Inc., Quatro Communications Corp., Rapid Express Corporation, Strategic Metals Corp., and Merendon Mining(Nevada)Inc.
Brost and Sorenson selected nominees to run the shell corporations which were then marketed by Brost's companies, Capital Alternatives Inc. and The Institute for Financial Learning (IFFL), Group of Companies Inc.
Ponzi schemes are an illegal pyramid type scheme named after Charles Ponzi who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s.
The idea of the scheme is to take money from new investors to pay off earlier investors until the whole scheme collapses.
The fraudsters behind this type of scheme often go to great lengths to make the program look like a legitimate multi-level marketing program.
Police are encouraging anyone who believes they may be a victim in this scheme to call 403-292-8827 with information.
