Attorney General Recovers $17 Million for Victims of Ponzi Scheme
Largest Ever Recovery Under Ontario’s Civil Forfeiture Law
Ontario's Attorney General has obtained a court order to recover $17 million for victims of an international investment fraud -- the largest ever recovery under Ontario's civil forfeiture law.
The money was linked to an international Ponzi scheme operated over the past decade by the Stanford group of companies in the United States, South America and the Caribbean. Under the scheme, returns to investors were paid from their own money or the money of other investors, rather than from profit. U.S. authorities filed suit against Stanford and his companies in 2009.
Although the money was held in accounts at a major Canadian bank, the majority of victims are in the U.S. and Latin America. As a result of the court order, the $17 million will be forfeited to Ontario and then transferred to the United States Department of Justice, which will distribute the funds to victims.
- Another $6 million remains under control of the court and is designated to be returned to victims who deposited money in accounts after the fraud was uncovered.
- The Ponzi scheme resulted in $5.9 billion of investor losses worldwide.
- There are an estimated 28,000 victims. The number of Canadian victims is not yet known.
- The Stanford group of companies include the Stanford International Bank, Ltd., Stanford Group Company and Stanford Capital Management LLC.
- The Civil Remedies Act, 2001 allows the Attorney General to ask the civil court for an order to freeze, take possession of, and forfeit to the Crown, property that is determined to be a proceed or an instrument of unlawful activity.
- Ontario has approximately $24.5 million in frozen property, pending completion of civil forfeiture proceedings.
“In 2009, U.S. authorities referred this case to our Civil Remedies for Illicit Activities Office. I am proud that victims of this large-scale, international fraud are going to be compensated thanks to excellent cooperation between Ontario and the United States.”