A Canadian investor has pleaded guilty for his role in a Ponzi scheme, which allegedly involved the illegal diversion of nearly $70 million USD from more than 1,000 investors across North America.
Derek Elliott, who is from Carlisle, Ont., has reached a plea agreement with prosecutors. As part of the plea agreement, it is expected that Elliott will provide evidence against James Catledge, described as an “investment guru”, who was also charged in the same scheme.
In 2004, Elliott and his father, Frederick, purchased an abandoned Sheraton hotel on the beachfront in Juan Dolio, about 40 kilometres east of Santo Domingo in the Dominican Republic. The duo intended to turn the Sheraton into a high-end resort.
According to court documents, investors in the vacation resort purchased a product which was essentially a time-share arrangement for the resort property.
The investors were told the product should provide them a guaranteed annual rate of return of seven to 10 per cent, paid quarterly, over a minimum period of five years.
But according to the prosecution, nearly $70 million of investors' money was illegally diverted to commissions and other projects.
Elliott will be sentenced on February 25.
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