A Three Hills senior citizen is one of three Alberta men charged in an alleged Ponzi Scheme affecting 1,000 victims across North America and more than $60 million US.
Harold Murray Stark, 73, faces charges of fraud over $5,000 and conspiracy to commit fraud. He will appear in Okotoks provincial court April 16 along with three others. He also faces charges of laundering proceeds of crime and conspiracy to launder proceeds of crime.
The RCMP Commercial Crime Section in Calgary announced on Monday that it had concluded a six-year investigation into allegations of investment fraud and money laundering related to an Alberta-registered company, HMS Financial Inc.
RCMP alleged HMS Financial provided a series of investments that were involved in a Ponzi Scheme between 2001 and 2004. A Ponzi Scheme is an illegal business practice in which new investor money is diverted to pay previous investors. The operators of such a scheme pretend to mount a legitimate business operation, but little if any commercial activity actually takes place.
Investors allege HMS Financial was to give them at least an eight to 12 per cent return on their investments each month. Investors were told their investment was risk-free, and they further alleged that HMS Financial lawyer Garth Bailey held bonds valued in the millions of dollars which would be liquidated should the investments fail to pay out, say police.
Investigators haven’t been able to identify the existence of any bonds and believe this high-yield investment program was a Ponzi Scheme.
Police allege HMS Financial paid 10 per cent every month, every quarter, to investors who chose this form of payout. The payments are believed to have come from dollars by other clientele, police say.
The investment program failed in March 2004 when HMS Financial couldn’t meet their payout obligations, say RCMP. HMS Financial collapsed, just as the RCMP investigation began.
Robert Fyn (aka Col Robbie Fyn), 62, of Linden, and Garth Bailey, 57, of Okotoks, will also appear in Okotoks provincial court April 16 on charges of fraud over $5,000 and conspiracy to commit fraud.
Police also charged Fyn, Bailey and Katherine Rodrique Bailey, 53, of Okotoks, with laundering proceeds of crime and conspiracy to launder proceeds of crime.