Three men charged in an alleged $60 million Ponzi scheme will be appearing in provincial court in Drumheller on April 16.
The RCMP Calgary Commercial Crime Section have completed an investigation into allegations of investment fraud and money laundering relating to an Alberta registered company HMS Financial Inc. RCMP believe that HMS Financial provided a series of investments that are believed to be part of a Ponzi Scheme running between 2001 to 2004.
A Ponzi Scheme is an illegal business practice in which new investor money is diverted to pay previous investors. The operators of such a scheme pretend to mount a legitimate business operation but little, if any, commercial activity actually takes place. Ponzi schemes require a steady stream of money from new investors in order to pay dividends to existing investors. As the Ponzi grows, so does the exponential need for new investor money. Ultimately the Ponzi collapses under its own weight, as there are no underlying earnings from any economic enterprise.
RCMP Calgary Commercial Crime Section launched this investigation in 2004 and believe approximately one thousand victims throughout North America invested more than $60 Million US into various alleged fraudulent investment programs offered by HMS Financial.
According to an RCMP release, investors allege they were promised a return of 8-12 per cent per month. The investments were purported to be risk free as one of the accused held millions of dollars in bonds that would be liquidated should the investment not pay out.
Investigators have not been able to identify the existence of any bonds, and believe this high yield investment program was a Ponzi scheme.
It is alleged that in order to perpetuate the scheme and entice new investors, HMS Financial paid 10 per cent a month every quarter to those investors who chose to accept a quarterly payout of interest. The payments are believed to have been drawn from funds provided by other HMS clientele.
(Harold) Murray Stark, 73, of Three Hills, Robert Fyn AKA Col Robbie Fyn, 62, of Linden and Garth S. Bailey, 57, of Okotoks are to appear in Drumheller. They have all been charged with Fraud over $5,000, and conspiracy to commit fraud.
The three, as well as Katherine Rodrique Bailey, 53, of Okotoks have been charged with laundering proceeds of crime and conspiracy to launder proceeds of crime.
Jay O'Neill, communications officer for Alberta Justice said the case is scheduled in Drumheller because the company involved in the charges operated out of Linden, and it falls within Drumheller's jurisdiction.
Any victims who have not come forward to the RCMP Commercial Crime Section, or anyone who feels they may have information relating to this matter are asked to call 403-699-2581.