Canadian investor pleads guilty in Ponzi scheme

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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  • by 2015-01-19 11:45:57 AM

    Sounds the same as fast track capital

  • by 2015-01-19 12:04:45 PM

    Same thing at the falls golf course in bc

  • by Mike Wolf 2015-01-19 12:58:21 PM

    Unfortunately we see this all too often. Unsuspecting 'investors' being taken advantage of by unscrupulous promotors who put their own needs ahead of those that they are supposedly trying to serve.

    One of the things I always teach my students is to take CONTROL of their investments. This involves education, knowing who you are working with, and having title to the properties that you own.

    This is very avoidable. Before you invest READ THE OFFERING MEMORANDUM or prospectus. How much are the promoters taking off the top for miscellaneous fees such as acquisition, disposition and maintenance fees. Usually, the people at the top of the food chain make millions while the people who put up the cash end up losing everything.

    Mike Wolf

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