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

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

Hang gliding video gives stunning view of Harrison and Fraser river confluence

Aerial view shows striking difference between two rivers as they meet

Young Chilliwack singer launches career with French classic

Deanne Ratzlaff performs as featured vocalist in La Vie en Rose in Chilliwack, London and Paris

The most h-i-l-a-r-i-o-u-s spelling bee you’ll ever see in Chilliwack

Secondary Characters Musical Theatre hits the stage with The 25th Annual Putnam County Spelling Bee

Psychics, drones being used to search for missing Chilliwack woman with dementia

Volunteers pulling out all the stop to try to find Grace Baranyk, 86

Serious police incident unfolding at Sts’ailes

Small reserve near Agassiz surrounded by police vehicles, helicopter, ERT

Trudeau says Ottawa open to proposals for B.C. refinery as gas prices soar

Prime minister says he knows B.C. residents are struggling and the federal government is open to ideas

Clock’s ticking to share how you feel about Daylight Saving Time in B.C.

Provincial public survey ends at 4 p.m. on Friday

B.C. man pleads guilty in snake venom death of toddler

Plea comes more than five years after the incident in North Vancouver

Police identify pair found dead along highway in northern B.C.

Woman from the U.S. and man from Australia found dead near Liard Hot Springs

Trudeau announces $79M investment for 118 more public transit buses across B.C.

Contributions from municipal to federal level to fund more buses in a bid to cut commutes

Justin Trudeau’s carbon footprint revealed in ranking of world leaders

Travel company ranks 15 world leaders’ foreign flight CO2 emissions

B.C. First Nation’s group using ads in Texas targeting company for fuel spill

The Heiltsuk Tribal Council has called out Kirby Corporation for the Nathan E. Stewart oil spill

B.C. woman wins record $2.1 million on casino slot machine

‘That night was so surreal … I wasn’t able to sleep or eat for the first two days,’ she said

After B.C. dad’s death, Technical Safety BC wants changes to trampoline park rules

Jay Greenwood, 46, did ‘a series of acrobatic manoeuvres prior to a fall that caused serious injury and cardiac arrest’

Most Read