Charges in Ponzi Scheme Dropped
Attorney-General to conduct investigation into the reason that charges in large Ponzi scheme were dropped.
Ontario's Attorney-General has announced that an investigation will be launched into why charges were dropped against a Toronto man accused of being behind a $27-million Ponzi scheme, The National Post reported on Tuesday.
The story was first reported by The National Post last December. The alleged fraud was based in a small print shop in the Richmond Hill area. Shop owner Tzvi Erez, a well-known member of the Toronto Jewish community, claimed he was brokering print jobs for large companies while producing documents with the supposed orders. Erez allegedly received large cash advances from investors while promising high returns. In fact, there were no large orders and the invoices had been forged.
A receiver appointed after the print company had gone bankrupt found that $38.9 million went through eight bank accounts belonging to Erez, who had been convicted in 2006 of writing bad cheques to several casinos. CIBC came across several suspicious deposits totalling $9,900 in his bank account and initiated an investigation by the fraud unit. The receiver found that the money invested by members of the Jewish community went to casinos within Canada as well as on the internet.
Erez was charged with fraud, but the charges have since been dropped because the Crown said it lacked the resources to prosecute the crime. However, Attorney General Chris Bentley informed the legislature on Tuesday that he has asked the province's chief prosecutor to investigate why the charges were dropped. Bentley was quoted by The National Post as saying: “We take allegations of fraud very seriously. We prosecute the allegations. We do not walk away from cases. We have resources for the cases that need them, and where more are required, we find them.”