The owner of a sailboat company tipped off police about a scam involving money washing. (CBC)

A small business owner in Calgary tipped off police to a money "washing" scam that he describes as "high school chemistry at its finest."

After an undercover operation, police arrested two men from Montreal who are now charged with fraud over $5,000.

The tip came from Gordon Vangust, owner of Glenmore Sailboats, who said he had been courted by two men claiming to be political refugees from Sierra Leone, for a month before he realized they were trying to con him.

"We had some customers come in looking to buy boats to ship over to West Africa," he said Thursday. "It's not uncommon for us to sell boats internationally."

After several meetings, the men explained that they had smuggled their cash out of Africa.

"They then proceeded to show me they coat their bills in something and turn them white, then they are able to smuggle them out of the country. They needed my help to clean these bills and turn them back into Canadian currency," said Vangust. "This is high school chemistry at the finest."

The men asked Vangust for Canadian cash to help them with the "cleaning" process and lost interest in the boat deal, he said.

"That's when the alarm bells really started to go off and that's when I did the research on the internet to find the [black money] scam," he said.

Vangust called police.

Calgary Sgt. Ralph Stotschek said such a scam involves gaining someone's trust, using real bills to perform the "chemical wash" in front of the victim, and then asking for thousands of dollars to help convert more.

"Once the victim's trust is gained, they are left with briefcases full of black cardboard paper or briefcases of white photocopy paper."

Police are hoping more victims, or people approached for the scam, will step forward.