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

Just Posted

A tenant walks in front of her home on Boundary Road on Friday, June 18, 2021 after it was destroyed by fire the night before in Chilliwack. (Jenna Hauck/ Chilliwack Progress)
Chilliwack family homeless after fire rips through house on Abbotsford border

Turtle rescued, no one seriously hurt following Boundary Road fire in Chilliwack

Wild rabbits are all over Chilliwack, but people often think they’re someone’s lost pet and try to ‘save’ them. But the owner of Chilliwack’s Reptile Room says good intentions can have bad consequences for wild animals. (Photo by THE CANADIAN PRESS)
Owner of Chilliwack’s Reptile Room asks people to leave wild animals in the wild

Amber Quiring says people who think they’re helping are actually doing more harm than good

The Agassiz-Harrison Museum celebrates Indigenous Peoples Day on June 21 with special information about The Stó:lō Nation, culture, language and more. (Graphic/Agassiz-Harrison Museum)
Agassiz-Harrison Museum to celebrate Indigenous Peoples Day

June 21 will feature info about local First Nations culture, language and more

Brandon Hobbs (turquoise shirt), brother of missing Abbotsford man Adam Hobbs, gathers with other family and friends to distribute posters in Chilliwack on Thursday, June 17, 2021. (Jenna Hauck/ Chilliwack Progress)
Search efforts expand to Chilliwack and beyond for missing Abbotsford man

Family, friends put up posters in Chilliwack, Agassiz, Hope for missing 22-year-old Adam Hobbs

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

Thousands of protesters make their way through the downtown core during a Black Lives Matter protest in Ottawa, Friday June 5, 2020. THE CANADIAN PRESS/Adrian Wyld
MPs’ study of systemic racism in policing concludes RCMP needs new model

Chair of the House public safety committee says it’s time for a reckoning on ‘quasi-military’ structure

A case filled with packages of boneless chicken breasts is shown in a grocery store Sunday, May 10, 2020, in southeast Denver. THE CANADIAN PRESS/AP-David Zalubowski
One million chickens euthanized during labour dispute at Quebec slaughterhouse

Premier says waste amounts to 13 per cent of the province’s chicken production thrown in the garbage

Premier of Manitoba Brian Pallister speaks at a news conference at the Manitoba Legislative Building in Winnipeg on Wednesday, April 7, 2021. THE CANADIAN PRESS/David Lipnowski
Provincial leaders want more federal money for health care, plan to meet in fall

Premiers ask Ottawa to increase its share of overall health spending to 35 per cent from 22 per cent

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

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 section of the eastern slopes of the Canadian Rockies is seen west of Cochrane, Alta., Thursday, June 17, 2021. A joint federal-provincial review has denied an application for an open-pit coal mine in Alberta’s Rocky Mountains, saying its impacts on the environment and Indigenous rights aren’t worth the economic benefits it would bring. THE CANADIAN PRESS/Jeff McIntosh
Panel says Grassy Mountain coal mine in Alberta Rockies not in public interest

Public hearings on the project in southern Alberta’s Crowsnest Pass region were held last fall

An old growth cedar stands in a cut-block within the Caycuse Valley. More than 100 prominent Canadians, have signed an open letter calling for the immediate protection of all remaining old-growth forests in B.C. (Submitted)
Brian Mulroney and Greta Thunberg among 100 celebrities pushing to save B.C. old growth

List includes Indigenous leaders, scientists, authors, Oscar winners

Most Read