A day after financial investigators revealed that a disgraced Victoria businessman had bilked, at minimum, $317 million from investors between 2018 and 2023, a financial crime expert is calling it one of the biggest Ponzi schemes in Canadian history.
“For a Canadian Ponzi scheme, it’s pretty substantial,” said Christian Leuprecht, a financial crime expert and professor with Queen’s University and Royal Military College in Kingston, Ont.
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Greg Martel built a business on promises. To investors he promised huge dividends fast, and even when his alleged Ponzi scheme was coming crashing down, he still was promising.
“You will 100 per cent get your money back,” Greg Martel told CHEK News in May of 2023.
Instead, court documents say Martel fled the country, avoiding court appearances and failing to pay back the $317 million financial investigators PricewaterhouseCoopers says he stole from investors.
Martel not only took millions but also spent millions. Investigators tracked that Martel spent around $8 million on travel, cars, rent, eating out, watches, jewelry, etc., within a five-year span.
A Ponzi scheme uses investor money to pay earlier investors with the false sense that it is offering higher-than-normal returns.
“The scammer then pays early investors with money from new investors. Investors believe their investment is returning high profits, but the scheme will eventually collapse,” according to the Canadian Anti-Fraud Centre.
The fact that Martel was able to allegedly wheel and deal in B.C. for years, Leuprecht says, doesn’t come as a surprise.
“This case, combined with what we know about financial and economic crime in Canada, combined with 1800 pages of the Cullen Report on Money Laundering in British Columbia, all this adds up that the mechanisms, the frameworks, the capacities we have to ensure a properly run financial system in this country are wholly inadequate and just simply too vulnerable to exploitation by bad actors that are running not all that elaborate schemes,” said Leuprecht.
“The institutions that we do have in place in this country have repeatedly been shown themselves to be weak and to be fragmented, and of course, this is part of the challenge that we have securities commissions that span each of the provinces rather than having a single national regulator.”
Other Canadian Ponzi schemes
Other significant Ponzi schemes include the likes of Vancouver Island’s Ian Thow and someone nicknamed “The Pigeon King.”
Thow was jailed in 2010 for defrauding 20 clients around $10 million. The Crown characterized his actions as “a classic Ponzi scheme,” taking money from clients to invest in a Jamaican bank and short-term loans to developers.
He just never invested the money. Instead, he spent it lavishly on waterfront properties, helicopters, jets and yachts.
Then there’s The Pigeon King.
“I am wholly convinced I can save the family farm with pigeons,” said Arlan Galbraith, the man behind Pigeon King International, to CBC in 2008.
Waterloo, Ontario’s Arlan Galbraith perched atop a Ponzi scheme from 2001 to 2008, selling pigeons with promises to buy back the offspring, telling farmers the birds were a new type of elite racing pigeon.
Galbraith never sold a single pigeon for sport. When Pigeon King International collapsed, investors lost $20 million.
The Pigeon King, Ian Thow, and Martel all were operating for years before an investigation began. In all cases, investors are not expected to get their money back.
Kori Sidaway
