Clients invested thousands in this Calgary firm but there's a hitch — it doesn't exist
'Scammers know no borders,' spokesperson for securities commission says
A group of South African investors say they're out hundreds of thousands of dollars after investing in what they believed was a Calgary company — that doesn't seem to exist.
Mzondi Mathebula said he first heard about Reannex Investments from a friend.
"I think initially I invested about $1,000 US. And I went on to invest another $20,000 US," he said.
Initially, everything was going great — small withdrawals worked, prompting Mathebula and others to invest larger sums.
But in November 2019, seven clients tell CBC News, withdrawals stopped working and communications from the company largely ceased.
"All our withdrawals are still pending to date. We are still able to get into the system and see the investment growth … so we became skeptical, wondering what is really happening?" Mathebula said.
He said he invested $28,280 US and the Reannex website states he's made $29,981 US in profit. He's been able to withdraw $6,745 US. But the rest of the money remains in his account.
"Because we are far, we can't go and check in their offices … we don't know what is happening."
Another investor said she was told in a letter from the company that she and her investment group would have to raise their total deposit to $1 million US before they could make any withdrawals. They had already invested more than $400,000 US, and had been told that $315,000 US in profit is sitting in their account.
Another said she was sent a letter stating the company is having withdrawal "challenges" due to a system upgrade, but no date was set for when she would be able to withdraw her funds.
The Reannex Investments website states the company is located on the third floor of the Lancore Building, on 10th Street and 10th Avenue in southwest Calgary.
That building is actually home to Alberta Supports (government-provided community services) and staff there said they have never heard of Reannex and, to their knowledge, it has never been located in the building. A spokesperson confirmed Alberta Supports has been leasing space on the third floor since 1991.
The Reannex website lists a second location on 125 High St. in Boston, Mass. That building's property management company also confirmed Reannex is not a tenant.
The company's phone numbers — with Calgary and Boston area codes — are disconnected and emails sent to some company addresses bounce back. CBC News has reached out to the company multiple times over a number of weeks and did not receive a response in time for publication.
"It looks so real … I found it legit from my side, because it did pay me," another client, Ivan Seroka, said. "I don't have anyone to go walk into the office and check them, because a plane from this side is about $1,000 US … that would be the last resort."
$1,000 in bitcoin
CBC News created an account under a false name in an attempt to make a small investment with the hope of contacting the company or testing its withdrawal system.
The account was created but Reannex would only accept deposits greater than $1,000 US in bitcoin.
When CBC News, posing as this potential investor, emailed the company to request information about how to make a smaller investment on a trial basis, those inquiries went unanswered.
The company's website promises weekly or monthly returns ranging from 10 per cent to 65 per cent on investments.
It's very easy for [scammers] to disguise who they are, disguise where they are.- Alison Trollope, Alberta Securities Commission
The majority of testimonials on the website appear to be fake — with no social media accounts tied to the names or photos.
One testimonial claims to be from a man named Kolowich Milosevic but his photo belongs to motivational speaker Bob Proctor. A spokesperson for Proctor told CBC News that Proctor had not authorized the company to use his photo.
CBC News reached one woman in South Africa whose name and photo match those used in her testimonial on the website.
Nomcebo Dlamini manages a Reannex Investment page on Facebook — she said she initially found the company through a Facebook search looking for new business opportunities. She said she's just an investor with no ties to the company and was using her Facebook page to recruit others, as Reannex said it offered bonuses like homes and cars to those who brought in large investments from new clients.
She said she invested, and convinced others to invest, after an acquaintance in Calgary visited the company's office and told her the office does exist — but she refused to provide that person's name to CBC News.
"I don't have anything that I can help you with because I'm also frustrated," she said in a phone interview.
On her Facebook page, she regularly posted screenshots of withdrawals from her account to demonstrate she was making money from her Reannex investments, as well as photos from Reannex events in Durban, South Africa. She said she now believes she was scammed by the company.
Other investors confirmed they had attended investment events in South Africa, and communicated with an investment manager named Nicholas Paul through WhatsApp who they believed was located in Calgary.
That Calgary number was disconnected — but Paul's WhatsApp account tied to the number is still active. CBC News reached out to him via the messaging app but, while the message has been marked as "seen" and Paul has since been online, he did not respond. Paul's photo shows a man, who appears to be in his 30s, posing in front of pop-up plastic igloos and Christmas lights.
Messages from Paul sent to clients show him seemingly placating them in November about withdrawals not being available.
"Please I understand how you feel and clients reactions … There's number of withdrawal that needs to be done per day so that bitcoin network can confirm it and you can't exceed this number of transaction," one message from Paul reads.
CEO 'Sharlok Homes'
The staff listed on the company website also don't seem to exist. Searches of staff members' names like "chief executive officer Sharlok Homes" turn up no results. Homes' photo is a stock photo.
The biography for the company's managing director Hiamovi Clifford states he was born in Colorado on Nov. 15, 1959, and attended the University of Salford. There are no birth records in Colorado for anyone with that name. The University of Salford said it does not provide information about whether someone attended the school.
Clifford's bio also claims he founded a Reannex Foundation, which "donated $10 millions for flood victims of Houston Texas." CBC News has found no records to prove that charity exists or made that donation.
Managing partner Barrie Christine's biography says she sits on the Woolf Institute development council at the University of Cambridge (the Woolf Institute said it had no person of that name or any variation on its council) and volunteers as a trustee with the Patient Access Network Foundation (which said it does not have trustees).
While Reannex is not registered as a business in Canada or Massachusetts, it does have a business registration number in London, U.K., under director Matthew Davidson. CBC News has not been able to contact Davidson.
Reannex changed its name last year from Nadex Investments, according to letters from company investors provided to CBC News.
Nadex is also registered as a company in the U.K. — but in January it was given notice that unless it files overdue paperwork, it will be dissolved.
In late January, South Africa's Financial Sector Conduct Authority issued a warning about Nadex, stating the company is not authorized to give financial advice or render services. The agency said South African customers should call the FSCA at 0800 110 443 before making an investment to confirm a company is authorized.
CBC News reached out to London police to ask if Reannex is under investigation but officials said they were unable to confirm an investigation without either a date and location of an offence, or a police report number. CBC also reached out to South Africa police and has yet to receive a response.
RCMP said as the company is purportedly located in Calgary, any investigation would fall under local police jurisdiction.
Promises of high rates of return with lower risk … it's the pitch in 99 per cent of all scams.- Alison Trollope, Alberta Securities Commission.
Calgary police said they were not able to comment on whether the company is under investigation — but said they may not get involved in an investigation of a company that is registered in Calgary but isn't actually based in the city, unless there is proven intent the company was registered for the purpose of defrauding customers. There may be non-criminal reasons why a company may list its location in one jurisdiction while operating in another, police said.
"I don't know what to do," Mathebula said. He said now one of his children will not be able to attend university because he can't get his money back from Reannex.
Another client, who asked not to be named as she said she is still hoping to maintain positive ties with the company and recoup her investment, said she took out bank loans to invest that she cannot afford to pay back.
Alison Trollope, director of communications and investor education with the Alberta Securities Commission, said the commission may not have jurisdiction to investigate a company that represents itself as based in Canada but has no actual ties to the country. But it would certainly co-operate with international authorities' investigations if needed, she said.
'Scammers know no borders'
"Enforcement knows no borders anymore because scammers know no borders and, with all the technology that exists today, it's very easy for them to disguise who they are, disguise where they are and try to trick people into handing over their money," she said.
She does have some advice for investors to avoid being ripped off.
"For Canadians and for people internationally where they are investing in places that they're not familiar with, I mean, there's a couple of red flags there. First is that you're sending the money offshore … it's almost impossible for the local authorities to track it down and help you get your money back," she said.
"The other thing people really need to be aware of are some of the other red flags of fraud, like promises of high rates of return with lower risk … it's the pitch in 99 per cent of all scams."
She also said while a company may appear to be from Canada — say by having a Canadian area code — that may not be the case as those details are easy to spoof.
"While it would appear to have an element of being from Canada, that's not necessarily the case. But in terms of protecting yourself in Canada, you can check the registration of anyone offering an investment," Trollope said.
Bitcoin a complicating factor
The rand — South Africa's currency — is one of the world's most volatile, making cryptocurrency or investments that appear to be in Canadian or U.S. dollars significantly more appealing, clients said.
Cryptocurrency also has limited regulation in South Africa, although the country plans to introduce stricter rules this year.
Benjamin Perrin, a Calgary cryptocurrency expert, said the situation these investors find themselves in is especially unfortunate because for some, cryptocurrencies can be an appealing or even safer alternative than their local currency.
He pointed to Venezuela, where bitcoin has become extremely popular as the bolivar contends with devastating hyperinflation.
"The whole point of bitcoin is disintermediation — taking out middlemen," he said. "But as soon as you put that trust back in somebody again," like an uncertain investment, he said, "you're kind of negating the whole purpose of bitcoin in the first place."
Perrin said it's a red flag when a company like Reannex requests transactions in bitcoin despite purportedly keeping its holdings in U.S. dollars — because the money transfers are irreversible and essentially untraceable.
"Criminals capitalize on people's misunderstanding of [technology] in order to make a quick buck," he said. "People are used to being kind of babysat with our current banking infrastructure … I think the only way around this is education.
"In general, if somebody is promising you any sort of [guaranteed] return on any investment, I would be incredibly wary."