The Ontario Securities Commission (OSC) is seeking a ban against a convicted fraudster who admitted to duping investors out of millions in an apparent Ponzi scheme.
The regulator filed an enforcement action against Charles DeBono, seeking to permanently ban him from the securities industry on the basis of his conviction on a charge of fraud over $5,000 and money laundering in the Ontario Superior Court of Justice.
According to the OSC’s allegations, in 2022 DeBono pleaded guilty to the charges and was sentenced to 51 months and 19 days in prison. He was also ordered to pay $26.9 million in restitution and fined $26.9 million in lieu of forfeiture.
The charges stemmed from a scheme that involved raising more than $40 million from investors to invest in point-of-sale debit terminals, with the promise that investors would receive a return of 15¢ per transaction that was processed through the machines.
However, the venture turned out to be a Ponzi scheme, the regulator said.
At least $10.1 million of investors’ money was diverted for DeBono’s personal use, and between $5.9 million and $16.9 million was estimated to have been paid out to other investors. A forensic accountant estimated that investors’ losses were between $23.9 million and $41.9 million.
The OSC said the scheme involved investment contracts. As a result, it’s now also seeking an enforcement order banning DeBono from the markets.
The allegations have not been proven.