Police warn of Ponzi-type scam in Hamilton and Burlington


Published June 2, 2023 at 8:24 am

ponzi scam hamilton
Photo by Gustavo Fring

Police warn a Ponzi-type scam is happening in the Hamilton and Burlington area.

Investors lured into the Ponzi-type private lending scheme are issued promissory notes, according to a press release from the OPP.

The OPP’s Economic Crime and Corruption Unit of the Ontario Provincial Police (OPP) Anti-Rackets Branch is currently investigating.

Named after Italian businessman Charles Ponzi, the scheme usually leads victims into thinking their investment profits are coming from legitimate business activity. But the funds are coming from new investors, and the people who invest last lose out.

OPP says the following are indicators of a Ponzi scheme:

  • Sounds too good to be true. – e.g., Claims of a never-ending pool of short-term high-interest rate borrowers.
  • Promises of low risk or high rewards – Promoters of Ponzi schemes typically promise implausibly high or quick returns with little risk. Any guarantee that an investment will perform in a certain way is a signal that it might be part of a Ponzi scheme.
  • High-pressure sales tactics – Reputable investment firms and agents do not push potential investors to act immediately, and legitimate investment opportunities are rarely time-sensitive.
  • Pressure to reinvest – Often fraudsters keep Ponzi schemes alive by convincing investors to reinvest their profits rather than take a payout.
  • Lack of transparency or access – Secrecy surrounding the operation of the financial company should be an immediate warning sign. If the schemer can’t or won’t provide verifiable sources of capital, equity or collateral then be wary of investing.

The OPP encourages anyone who feels they may be a victim of an investment scam to contact their local police service to report the crime.

And report it to the Canadian Anti-Fraud Centre at 1-888-495-8501 or online using the Fraud Reporting System (FRS), even if a financial loss did not occur, OPP says.

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