Skip to content

COVID scare delays sentencing hearing in multi-million-dollar 'Ponzi scheme'

'To the average person, it looked very interesting, a very nice presentation,' says one victim who lost money

A Barrie man who admitted to fraudulently taking millions of dollars from Canadians and living in luxury in the Caribbean  shipping in high-end cars, building a hotel and buying up apartments  was escorted into a local courtroom for his sentencing hearing Monday only to learn his lawyer couldn't get into the building.

“He came to the courthouse today… because of those symptoms he did not pass the (COVID-19) screening test,” Superior Court Justice Michelle Fuerst told Charles DeBono, who was seated before her still wearing his coat. “That’s just the way things are these days.”

The Crown prosecutor then went outside to meet with the defence lawyer to come up with a new date that worked with the judge. They settled on April 25.

DeBono was to have a two-day, in-person sentencing hearing in connection with an investment scheme in which an estimated 515 people lost a total of somewhere between $23 million and $41 million. The 63-year-old man had earlier pleaded guilty to fraud over $5,000 dating back to 2012 and laundering money.

The probe

The fraud probe, dubbed Project Debit Direct after DeBono’s company, was the first for the province’s integrated financial crime services unit, formed in late 2018 and modelled after serious fraud offices across the world.

The arms-length unit is made up of officers from several police agencies, including Barrie, RCMP, York and Peel regions, with OPP Det.-Supt. Dominic Chong heading up the investigative side. There is also a prosecution branch located on the same floor in their Toronto office which becomes involved early on in the investigation.

“With fraud and financial crimes investigations, they are so complex, detailed and convoluted, if we don’t have that working relationship with the Crowns, it is almost impossible to prosecute,” Chong said. “Fraud investigation is by far more complicated, more complex than any organized crime investigation I’ve ever done.”

Investigations are typically document-based with investigators having to sort through and analyze hundreds of thousands of documents, he said.

The fraud

Court earlier heard DeBono created KIS Media Ventures in 2012, which served as an umbrella organization for illicit companies, including Debit Direct, a point-of-sale terminal ownership program. Crown prosecutor Ted Ofiara said there was no evidence that any machines were ever placed in businesses and he called it nothing but a Ponzi scheme.

A salesman was hired and it was peddled as a handsome investment at franchise shows across the country and on websites. The point-of-sale terminals were to be placed in high-volume businesses across Canada. The investors were to receive 15 cents per transaction in monthly payouts and some did initially receive payments.

DeBono’s business used virtual office space at First Canadian Place in Toronto, but its base was actually an office at a Barrie auto repair shop which DeBono owned and was managed by a mechanic. Any mail sent to Toronto was forwarded to a post office box in Barrie.

A woman employed as an administrative assistant essentially handled the bulk of the daily business of Debit Direct at DeBono’s direction, according to the admitted statement of facts read into the court following his guilty plea in February. During the investigation, she provided police with a drive copying the details of the business activity.

The salesman hired to sell the terminals in 2014, believed the business to be legitimate and he himself bought in and encouraged family members to become involved.

A woman was hired to mine data on small businesses which were then assigned to debit machine identification numbers, although none of the businesses were actually involved with the company. The lists were then sent to investors to suggest that the terminals were generating income.

In total, 515 people, mostly in Canada but also in Nigeria, bought in to the tune of $56 million between 2012 and 2017 and many received dividends at the beginning.

The challenge

Several police agencies across the country began to receive complaints from victims who had  been defrauded, but Chong said none were able to tackle the full scope of the investigation. The financial crime services unit, then in its infancy, took it on.

“We take a multi-disciplinary approach to investigating and prosecuting fraud,” explained Chong. “It’s very limited resources that we have, so we’re pretty selective in the cases we take on.”

One of the complications of the investigation was that DeBono was living in the Dominican Republic, which then required the involvement of its national police. The Canadian investigators were able to make that contact through the RCMP office in the Dominican Republic.

To track down the money trail, they were able to get the judicial authority to tap into the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), where transactions of $10,000 or more must be reported.

Their work culminated in DeBono’s arrest in the Dominican Republic during the height of the pandemic in September 2020. He has been in custody awaiting his day in court since.

Although DeBono was the only person charged by Canadian authorities, Dominican authorities conducted their own proceeds-of-crime investigation resulting in his wife and two others being charged.

The plea

The DeBono case was considered a perfect fit for the unit.

“To enter guilty pleas (in just over a year after his arrest) is almost unheard of in cases like this,” said Chong. “The reason for that is that when he came back and we arrested him we actually provided him with full disclosure before his first court appearance.

“That’s the approach we take, we don’t arrest until we’re ready. With fraud, unless the crime is ongoing, we have the luxury of time.”

The unit currently has about a dozen cases on the go.

A victim who went to the Barrie courthouse on Monday spoke to BarrieToday on the condition of anonymity. 

“To the average person, it looked very interesting, a very nice presentation,” the man said of the pitch he saw at one of the franchise shows in Toronto. “They had sales people there and good websites.”

It all appeared professional, with no hint that it there was no foundation to the business.

The message is simply to be aware that investments come with risk, he said, because even those with the best presentations can be fraudulent.

He and other victims are hoping that they might be able to somehow recoup some of their money.