$46 Million Ponzi Scheme

Dennis Morice, Milowe Brost, and Gary Sorenson are three men from Calgary who had “perpetrated a deliberately complex, co-ordinated, far-reaching and massive – almost $46-million – fraudulent investment scheme.” Their companies, The Institute for Financial Learning Group of Cos. Inc. and Merendon Mining Corp. Ltd. have been charged with orchestrating a massive financial fraud and the trio has been charged with 54 million dollars in sanctions.

While the details of their operations are unclear, it is evident by investigation that Brost and Sorenson also face charges of fraud, theft, possession of stolen property, and money-laundering in connection to their Ponzi investment scheme.

How a ponzi scheme works is that the company will ask you to invest for them, promising you a higher return and usually a marginal dividend. Having taken inflation in account, the return rate is relatively high and appealing to investors of all caliber. Once new investors put their money into the company, they use this money to pay the old investors, living up to their end of the bargain. And once the old customers have received what they’ve gotten, they will put even more money into the scheme in order to maximize their profits. This is creates a chain of victimized investors until the company would finally receive a large sum of investments and declare bankruptcy.

Investigation shows that over 4000 investors have been scammed of at least $100 million as part of this scandal.

The ASC, which is the regulatory agency responsible for administering the province’s securities laws, has imposed sanctions totaling nearly $54 million against the trio, along with Merendon Mining Corporation Ltd. for “perpetrating a fraud on Alberta investors in the Arbour Energy case.” The ASC contends Arbour Energy raised $46 million it funnelled to Merendon without proper disclosure.