B.C. Securities Commission uncovers Ponzi scheme
Last Updated: Thursday, March 12, 2009 | 4:44 PM ET
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The B.C. Securities Commission says it's uncovered a made-in-Canada Ponzi scheme that's fleeced $570,000 from almost 200 investors.
The commission says Wellspring Capital Group Ltd. and Springpay Systems admitted to the fraud and agreed $440,000 frozen by the commission was the proceeds of unlawful activity.
Wellspring representatives told investors the program would generate high returns through sophisticated investments, when in fact the company was using new investment money to pay previous investors.
The two companies also admitted to trading and distributing securities without being registered.
Both have been ordered to cease trading in securities and have been banned from purchasing any securities in B.C.
The Ponzi scam is named after Charles Ponzi, who orchestrated one of the first such schemes in Boston in 1919.
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