CALGARY — A second man has been arrested more than two weeks after he was charged in an alleged Ponzi scheme that police say bilked investors around the world out of up to $400 million.
RCMP say Gary Sorenson was arrested Tuesday as he stepped off a plane at the Calgary airport. He was charged Sept. 13 with fraud and theft over $5,000, but police said at the time he was “still at large” and believed to be living in Honduras.
Police allege he and Milowe Brost were the masterminds behind what they say “appears to be the largest Ponzi-type scheme in Canada.”
Investigators originally pegged the amount of money lost at least $100 million, but said Tuesday the amount could be closer to $400 million.
Supt. Eric Mattson of the RCMP’s Integrated Market Enforcement Team said Sorenson’s arrest was a milestone in the investigation. The RCMP worked with Alberta Justice’s Special Prosecutions and the Public Prosecution Service of Canada to ensure that Sorenson would return to Canada, he said.
Graham McMillan, who created a website in 2006 warning against companies allegedly run by Sorenson and Brost after his father invested money, said he was thrilled to hear of the arrest.
“Everyone I’ve had any communication with, they were terribly frustrated that he seemed out of reach of the authorities.”
Police allege thousands of investors in Canada, the United States and overseas were taken in between 1999 and December 2008.
RCMP say the alleged scheme involved the creation of Syndicated Gold Depository S.A., which was supposed to lend money to Merendon Mining Corporation Ltd., with the promise of a high rate of return and tax advantages.
These perks, police say, were used to entice investors into investing in offshore shell companies which were run by handpicked nominees and marketed by Capital Alternatives Inc. and The Institute for Financial Learning Group of Companies Inc., two firms owned by Brost.
The shell companies included Asset Trax Inc., Quatro Communications Corp., Rapid Express Corporation, Strategic Metals Corp., and Merendon Mining (Nevada) Inc.
When the charges were first laid, Merendon Mining Corporation’s website listed Gary Sorenson as CEO. The site said the company is no longer based in Canada, but operates in Belize and has its headquarters in Honduras.
A note signed by Sorenson on the website’s main page said the company is not involved in any illegal activity. The note added that the company has never used the Merendon name in the United States and that investors in the U.S. companies may have been victims of fraud, but the Merendon Mining Corporation was not involved.
Police say Sorenson and Brost, who was arrested at the time the charges were laid, face up to 14 years in prison if convicted. Both men are set to appear in court Oct. 19 to enter pleas on the charges.