Court rules in favour of labour-sponsored venture fund against fund manager

The operator of an alleged Ponzi scheme in British Columbia has been sentenced to 27 months in jail, the B.C. Securities Commission (BCSC) announced on Thursday.

Roberto Castano of Surrey, B.C., was also ordered to pay approximately $1.5 million in restitution to seven investors by the B.C. Supreme Court, the BCSC says in a statement.

On Feb. 18, Catastano pled guilty to one count of fraud over $5,000

The BCSC launched an investigation into Castano in September 2009, following a tip from a financial institution. That investigation found that Castano was operating a Ponzi scheme.

“He issued promissory notes, told investors their money would be used to trade in the stock market, and promised returns of 5% per month,” the BCSC says in a statment.

However, its investigation found that, “Castano did not use all of the investors’ money for its intended purpose; instead, he used some funds to pay interest and principal repayments to investors and used other funds for personal expenses.”

In the wake of the BCSC’s investigation, the Crown brought charges against Castano in 2012.

Photo copyright: belchonock/123RF