The Royal Canadian Mounted Police (RCMP) today charged Boaz Manor and Michael Mendelson, co-founders of Portus Alternative Asset Management Inc., with 12 counts of fraud, money laundering and possession of property obtained by crime, following a two-year, international investigation.

Manor, currently living in Israel, has also been charged with an additional count of fraud over $5,000, two further counts of money laundering and one count of obstructing justice.

From 2003 until it collapsed in 2005, Portus collected about $750 million from 26,000 investors, most of whom were Canadian.

It also managed about 700 foreign investors, most of whom lived in Canada, Hong Kong, Taiwan and Bermuda, who had invested about US$52.8 million.

“Allegations are that funds from domestic investors were fraudulently used to operate the business in contrast to its disclosure and without investor’s knowledge,” the RCMP said in a release.

“Police further allege that Boaz Manor defrauded the
‘foreign’ investors by not investing the USD funds deposited with the Portus Group of Companies.”

For example, part of these funds were used to pay management fees, performance fees, referral fees, trailer fees and salaries, the RCMP said.

The 27 month criminal investigation was a joint effort between the RCMP Greater Toronto Area Commercial Crime Section and the Ontario Provincial Police Anti-Rackets Section.

The RCMP worked with international authorities in Switzerland, Austria, the Bailiwick of Jersey, Hong Kong, Turks & Caicos, England, Israel, the United States, Bermuda, Italy, Panama and Cyprus during the investigation.

“Any fraud related to investments and the investment industry has a broad impact,” said Superintendent Dave Truax, director of the OPP Anti-Rackets Section.

“It has a detrimental effect on economic integrity and shakes investor confidence, with frauds causing jobs to be lost and businesses to be shut down. Sometimes, it even wipes out entire life savings.”

Mendelson is scheduled for a first appearance at Old City Hall Court in Toronto on September 26, while an arrest warrant has been issued for Manor.