Red Deer RCMP have charged a 45-year-old Red Deer man with money laundering and fraud against the public after conducting a search warrant at his home on Dec. 19th; the search warrant is the culmination of a 20-month fraud investigation alleged to have cost its investors more than $10 million.
This complex investigation began in April of 2016 after RCMP received reports of suspected fraud involving the purchase, sale and rental of mobile light towers by Silvertip Energy Inc. The RCMP investigation centred around allegations that the owner of Silvertip Energy had sold or rented light towers with the same serial number to multiple investors and had also sold or rented units that were never manufactured. Victims of the fraud included five individual investors with estimated total losses of approximately $4 million, and four or more corporations in Canada and the United States with estimated collective losses of $6.2 million, for total losses of approximately $10.2 million.
“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 Constable William Lewadniuk of the Red Deer RCMP financial crimes unit. “Each level of a Ponzi scheme includes re-selling the same items to new investors, then paying a portion of that money to previous investors as if it were dividends. 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.”
The Red Deer RCMP financial crimes unit worked closely with the United States Secret Service and FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) throughout this investigation. The search warrant was executed by Red Deer RCMP on Dec. 19th at a residence on C&E Trail north of Red Deer. RCMP seized documents relating to the investments and electronics.
A 45-year-old Red Deer man faces the charges of laundering the proceeds of crime, three counts of fraud over $5,000 and possession of property obtained by crime over $5,000.
RCMP continue to investigate.
“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 US Secret Service and our ongoing partnership with FINTRAC were vital to its successful conclusion.”
FINTRAC is Canada’s financial intelligence unit. Its mandate is to facilitate the detection, prevention and deterrence of money laundering and the financing of terrorist activities, while ensuring the protection of personal information under its control. The United States Secret Service is mandated by Congress to carry out a unique dual mission: safeguarding the financial and critical infrastructure of the United States, and protecting the nation’s leaders.