The Royal Canadian Mounted Police (RCMP) and the Ontario Securities Commission (OSC) have accused a Toronto man of fraud over an alleged $15 million Ponzi scheme.

The GTA Financial Crime Unit of the RCMP announced that, following a joint investigation with the OSC, Kevin Zietsoff, 41, of Toronto, has been charged with one count of fraud over $5,000. Police allege that from January 1, 2006, to December 31, 2012, Zietsoff operated a Ponzi scheme where he raised over $15 million selling securities, and defrauding more than 50 people in the process. The allegations have not been proven.

The RCMP says that victims of the scheme were led to believe that Zietsoff was a successful investor and were guaranteed a high rate of return on their investments. However, it says that “almost all of his victims’ funds were lost in highly speculative futures/commodities trading.”

Along with the criminal charge, the OSC filed its own allegations in the case too, alleging securities fraud, trading without registration, and illegally distributing securities. Those allegations have not been proven either.

The OSC says that Zietsoff sold promissory notes through a network of acquaintances, family members and referrals on the basis of false representations, including that he was a successful trader with a proven system, that the notes were low risk or risk free, and that the investors would earn interest on their funds.

“In fact, Zietsoff had a record of consistent and near total trading losses both before and during the material time; he regularly made risky investments and the funds paid to investors as ‘interest’ or as repayment of principal were derived from monies deposited by other investors,” the commission says in its allegations.

It reports that, of the $15 million raised, about $10 million was erased through trading losses, $2 million was used to make ‘interest payments’ to investors; and $3 million was used to repay principal to investors. It is seeking permanent bans against Zietsoff, monetary penalties and disgorgement.

Police note that Zietsoff, who was registered in Canada or elsewhere, has been cooperative with the authorities throughout the investigation. He is scheduled to appear at Old City Hall Court house in Toronto on August 23. His first appearance before the OSC is scheduled for Sept. 5.

“The RCMP and our partner agencies are committed to maintaining investor confidence in the integrity of the public markets” stated RCMP superintendent, Dave Bellamy, the officer in charge of the RCMP’s financial crime units inToronto. “The economic stability of Canada continues to be one of our main priorities and our partnership with the OSC significantly contributes to this priority.”

The RCMP also acknowledged the assistance of the Arizona Corporation Commission in this investigation, noting that while most of the scheme’s victims were Ontario residents, 13 were American residents primarily in Arizona.