No way to make Ponzi fraudster repay B.C. victims

Disappointment as Surrey-based pyramid scheme draws no charges, $21.8 million in penalties likely to go unpaid

No way to make Ponzi fraudster repay B.C. victims

The head of a Ponzi scheme that ensnared investors across B.C. has been ordered by the B.C. Securities Commission to pay penalties totalling $21.8 million for defrauding more than 120 people out of millions of dollars.

But there’s little hope any of those victims will get back the rest of their money, which mostly ended up overseas and beyond the reach of regulators.

Surrey resident Thomas Arthur Williams ran Global Wealth Creation Opportunities Inc. and used a group of finders to recruit investors who ultimately put up $11.7 million between 2007 and 2010.

He promised them returns of at least two per cent interest per month and potential for much more.

Eventually, the pyramid scheme collapsed, investigators moved in and some investors lost their life savings.

Simon Cumming lives across a quiet Cloverdale street from Williams and has been watching with concern since he lost $10,000 in an earlier Williams-led venture and others in the neighbourhood fell into the same trap.

“I was pissed off but it wasn’t going to break me,” Cumming said. “But some people lost everything. I don’t think they’ll see a penny.”

He heard from an older senior in the B.C. Interior earlier this year soon after the securities commission made a finding of fraud in the case.

“He was absolutely beside himself, he didn’t know what to do,” Cumming said. “He actually cashed in a bunch of RRSPs and gave Tom in excess of $200,000 and lost it all. That was his retirement fund. He was sobbing on the phone when I was talking to him.”

No assets to repay victims

The penalties against Williams include a $6.8-million “disgorgement” penalty – equivalent to the amount of investors’ net loss after interest payments that could in theory be paid back to them.

But there are no assets currently frozen that could fund a payout, said Peter Brady, the B.C. Securities Commission’s director of enforcement.

“Most of the money was sent offshore years ago. It simply doesn’t exist,” he said.

While a few new Ponzi schemes surface every year in B.C., the BCSC ruling rates the Williams scam as among the worst, featuring “sham” companies that did no real business.

“The amount of money raised from investors and the extent of the deceit visited on investors was extremely significant,” it said. “Williams was the central figure in a multi-million-dollar Ponzi scheme. In magnitude and scope, his misconduct was at the very upper end of seriousness.”

Williams, who personally collected more than $440,000, is banned for life from trading securities or acting in any capacity in the securities market.

Four of his finders also face administrative penalties and trading bans.

A phone call to Williams’ home was not returned.

RCMP had ‘bigger fish to fry’

Cumming hoped the BCSC finding in January of this year of fraud under the Securities Act would be followed by criminal charges from the RCMP, which had been investigating Williams since 2011.

But Cumming was then told by an RCMP investigator the Mounties had stopped pursuing Williams because they had “bigger fish to fry” and had limited resources.

“I was very disappointed,” Cumming said. “I don’t know how $11.7 million and 123 investors isn’t big enough to pursue. He’s shown a propensity for ripping off people left right and centre.”

He said it’s in sharp contrast to several cases this year in which B.C. residents or accounting professionals have been sentenced to jail time for tax fraud.

“It appears that if you rip the government off they’ll come after you. But if you’re just ripping off little old ladies in the neighbourhood, it’s not big enough.”

Brady referred questions about the potential for criminal fraud charges to the RCMP.

RCMP spokesperson Cpl. Janelle Shoihet said the force doesn’t divulge whether investigations are ongoing unless charges are laid, public information is being sought or a public safety risk has been identified.

Warning signs

Ponzi scheme victims are typically out of luck because the investment money is usually gone by the time investigators are alerted.

“What usually happens with a Ponzi scheme is the perpetrators are careful to tell everybody to keep it quiet,” Brady said. “Usually we don’t hear anything until it’s starting to fall apart and they can’t make the payments any more.”

It’s a red flag for fraud, he added, when an investment dealer cautions clients not to talk to regulators.

“If investors have concerns about an investment and they think there might be some kind of misconduct they need to tell us early,” Brady said. “If they don’t tell us early, there’s very little opportunity for us to freeze bank accounts or put a lien on property.”

 

BC Security Commission ruling

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Construction is expected to start in March of 2021 on 23 new rental homes funded by the provincial government’s Community Housing Fund. (Metro Creative photo)
Province announces rental home project in Chilliwack paid for by Community Housing Fund

Twenty three homes for Indigenous families are planned in partnership with Tzeachten First Nation

Shandhar Hut Indian Cuisine reopened Dec. 1, 2020 in Chilliwack after closing Nov. 19 as a precautionary move to keep everyone safe. (Shandhar Hut/Facebook)
Chilliwack restaurant reopens after closing temporarily as a precautionary step

‘We are so grateful to everyone for their kindness,’ says Shandhar Hut manager

Police say 30-year-old Andrew Baldwin was killed in Surrey on Nov. 11. (Photo: Police handout)
Fourth man charged in 2019 Surrey murder

Andrew Baldwin, 30, was killed on Remembrance Day last year

Canadian Red Cross staff engaged in a Personal Protective Equipment (PPE) and social distancing training exercise. (Luc Alary / Canadian Red Cross)
Red Cross canvassers following PHO guidelines while going door-to-door

Canvassers using safety protocols including masks and distancing to continue organization’s efforts

A tongue-in-cheek message about wearing a face mask to curb the spread of COVID-19 on a sign outside a church near Royal Columbia Hospital, in New Westminster, B.C., on Sunday, Nov. 29, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C.’s COVID-19 infection count climbs back up to 656

20 more people in hospital, active cases still rising

B.C. Premier John Horgan on a conference call with religious leaders from his B.C. legislature office, Nov. 18, 2020. (B.C. government)
B.C. tourism relief coming soon, Premier John Horgan says

Industry leaders to report on their urgent needs next week

An RCMP cruiser looks on as a military search and rescue helicopter winds down near Bridesville, B.C. Tuesday, Dec. 1. Photo courtesy of RCMP Cpl. Jesse O’Donaghey
B.C. Mountie, suspect airlifted by Canadian Armed Forces from ravine after foot chase

Military aircraft were dispatched from Comox, B.C., say RCMP

Photo by Dale Klippenstein
Suspect tries to thwart police in Abbotsford with false 911 call about men with guns

Man twice sped away from officers and then tried to throw them off his trail

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A logo for Netflix on a remote control is seen in Portland, Ore.,Aug. 13, 2020. Experts in taxation and media say a plan announced Monday by the government will ultimately add to the cost of digital services and goods sold by foreign companies. THE CANADIAN PRESS/AP-Jenny Kane
‘Netflix tax’ for digital media likely to raise prices for consumers, experts say

The government says Canadian companies already collect those taxes when they make digital sales

BIG SALMON ranch in Washington State. (Center for Whale Research handout)
Non-profit buys Chinook ranch in hopes of increasing feed for southern resident killer whales

The ranch, which borders both sides of Washington State’s Elwha River, is a hotspot for chinook salmon

Gaming content was big on YouTube in 2020. (Black Press Media files)
What did Canadians watch on Youtube during isolation? Workouts, bird feeders

Whether it was getting fit or ‘speaking moistly,’ Canadians had time to spare this year

Most Read