U.S. Secret Service helped bust $10M Ponzi scheme in Red Deer, RCMP says
Owner of Silvertip Energy sold or rented the same light towers to multiple investors, investigators allege
A man in Red Deer, Alta., faces multiple charges in connection with an alleged $10-million Ponzi scheme that RCMP say they cracked with help from the U.S. Secret Service.
The 20-month probe involved allegations of fraud in the sale and rental of mobile light towers by Silvertip Energy Inc., RCMP said in a release Thursday.
It's alleged the company's owner sold or rented light towers with the same serial number to multiple investors, and had also sold or rented units that were never manufactured.
Five individual investors lost about $4 million and at least four companies in Canada and the United States lost $6.2 million, RCMP said.
"This is an example of a Ponzi scheme, where the same light towers were bought and rented numerous times on paper, on behalf of a number of different investors," says Const. William Lewadniuk of the Red Deer RCMP financial crimes unit.
"Ponzi schemes are like pyramid schemes in that they rely on continually bringing in new investors in order to keep the previous ones from discovering the fraud."
RCMP investigators worked with the United States Secret Service and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) on the investigation that began in April 2016.
In addition to its role protecting political leaders, the U.S. Secret Service is tasked with safeguarding the financial and critical infrastructure of the United States. FINTRAC is Canada's financial intelligence unit.
Investigators carried out a search warrant on Tuesday at a residence north of Red Deer and seized documents relating to the investments as well as electronics.
Joshua James Tenhove, 45, of Red Deer was charged with two counts of laundering the proceeds of crime, three counts of fraud over $5,000 and possession of property obtained by crime over $5,000.
Tenhove is set to appear in court on Jan. 15.
"I believe this may be the largest fraud file we've seen in Central Alberta," said Lewadniuk.
"The Red Deer RCMP's cross-border collaboration with the U.S. Secret Service and our ongoing partnership with FINTRAC were vital to its successful conclusion."
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