Toronto police say they have broken up an alleged Ponzi scheme that has cost investors a total of $2.3 million.
The Toronto Police Service Financial Crimes Unit announced Monday that they arrested a man as part of a fraud investigation into an alleged Ponzi scheme. Andre Lewis, 47, of Mississauga, has been charged with 12 counts of fraud over $5,000. He is scheduled to appear in court on November 1.
The allegations have not been proven. Police allege that a company known as LexxCo Corp. lured investors using advertisements in local newspapers offering a 10-12% return on principle that was to be invested in real estate and small businesses. Instead, it says the scheme used money that was to be invested to pay “interest cheques” to prior investors.
Police have 12 victims identified so far, and there is a reported loss of $2.3 million. They say they believe there may be more victims.
In July, the Financial Services Commisison of Ontario issued an order freezing the assets of Lexxco Investment Services Corp., and suspended its license as a mortgage administrator. FSCO issued an amended order in September requiring TD Bank to provide it with information about the frozen accounts. The Financial Services Tribunal has a hearing scheduled for February 2012 concerning that order.