Money laundering expert calls investment operation ‘large-scale Ponzi scheme’ in affidavit.
An associate of Whitby, Ont., self-described “Crypto King,” Aiden Pleterski, handed over more than $1 million in bank drafts payable to Pleterski last month in response to a civil search warrant.
Colin Murphy, 26, is one of five so-called “originators,” who raised money for the 24-year-old’s investment operation, according to trustee reports from Pleterski’s bankruptcy proceedings.
A CBC Toronto investigation previously detailed how more than 140 creditors were trying to unravel where at least $35 million, provided to Pleterski and his company AP Private Equity Limited for cryptocurrency and foreign exchange investments, ended up.
The bankruptcy proceeding against Pleterski supersedes all other claims against him. While that’s currently the only avenue to recover funds and assets from Pleterski directly, two investors who allege they’re out a combined $270,000 they invested through Murphy have started civil actions against Murphy to try and recoup what they’ve lost.
So far those civil efforts include obtaining freezing orders and Anton Piller orders — civil search warrants — which allowed fraud lawyer Norman Groot to search locations connected to Murphy without warning last month, and seize evidence relevant to recovering his client’s funds. The recovery includes $1 million in bank drafts to Pleterski, data Murphy claims comes from Pleterski’s iCloud account, and Murphy’s two cellphones.
“[Murphy] breached the court order to turn over one of his iPhones to us, and when he did turn it over, the data on that phone had been deleted,” said Groot, founder of the fraud recovery firm Investigation Counsel PC.
“Data relevant to both the issues involving Mr. Murphy and the larger Pleterski issue were likely on this phone and our concern is that there were cryptocurrency wallets or other assets on this phone as well.”
Murphy found in contempt of court
On Jan. 20, an Ontario Superior Court judge found Murphy in contempt of court in Oshawa for refusing to surrender his iPhone and for deleting data on it. In an interview outside the courthouse, Murphy said he deleted data because he keeps “super sensitive stuff” on the phone concerning his girlfriend.
“I’ve been keeping stuff to give to somebody,” said Murphy. “I released all that stuff to [Groot] but apparently I’m still some multi f–king millionaire.”
CBC Toronto reviewed hundreds of pages of court documents filed in pursuit of the civil search warrants against Murphy. Collectively, the records shed more light on the investment operation, that a former RCMP officer with an expertise in money laundering and who has been working on the case characterized as “a large-scale Ponzi scheme.”
“The nature of the Ponzi scheme that Pleterski, Murphy and their associates were involved in was to launder funds from sources that were not declared to the Canada Revenue Agency or were the proceeds of crime,” alleged Chris Mathers, a private investigator and certified fraud examiner, in an affidavit.
“Pleterski, Murphy and/or others are making use of cryptocurrency to launder the proceeds of fraud.”
The motion record in the case against Murphy also claims that Pleterski was not conducting trades of any significance while reporting allegedly false investment returns to investors.
Pleterski, Murphy deny allegations
“Aiden has clearly stated in the past that he denies that the investments he was involved in were anything but legitimate,” Pleterski’s lawyer Micheal Simaan said in an email. “His position on that has not changed.”
In a statement, Murphy’s lawyer, Sukanta Saha, told CBC Toronto his client denies all the allegations put forward by Groot’s client in the lawsuit.
“My client takes the position that he is just as much a victim of Mr. Pleterski’s misdeeds as anyone else and this will be shown in the robust defence that will be put forward by Mr. Murphy in due course,” said Saha.
In the interview outside the courthouse last month, Murphy said he gave Pleterski hundreds of thousands of dollars which he was set to inherit after being introduced to Pleterski through another investor. Then, he explained that friends of friends heard about Murphy’s investments and wanted in as well.
“I helped them give money to make this investment and it didn’t work out,” Murphy said.
“They claimed that they were gonna go after Aiden, but the moment they found out that Aiden filed bankruptcy … they pretty well just decide, ‘oh well, I’m just gonna get it where I can’ and now I’m here.”
But in an affidavit, Groot’s client claims Pleterski told him in June 2022 that Murphy took more than $2 million from investors since 2020, but didn’t transfer all of it to Pleterski. The trustee in Pleterski’s bankruptcy also has bank records showing more than $1 million transferred to Murphy by Pleterski, according to court filings.
Murphy drove Porsche, Lamborghini
Murphy — like Pleterski — also has a taste for luxury vehicles.
According to court records, Murphy has a red Porsche and a black Ford F-250 pickup truck registered in his name. He also drives a Lamborghini Huracan and Mercedes Benz sedan, which are both registered to his grandfather.
Groot told CBC Toronto that Murphy purchased the Lamborghini but it was registered in his grandfather’s name for insurance purposes. In the factum to obtain a civil search warrant, it’s also alleged Murphy has no known sources of legitimate income despite having access to multiple vehicles and social media posts showing him on two trips to the United States in the last few months.
Murphy’s lawyer said it would be inappropriate to comment on specific questions posed by CBC Toronto concerning the investments Murphy allegedly took in and where the funds for the luxury vehicles originated because the matter is before the courts.
It’s also unclear how Murphy obtained the data he surrendered to Groot, which Murphy alleges came from Pleterski’s iCloud account. In an affidavit, Groot’s client said both Murphy and Pleterski told him directly that Murphy had taken Pleterski’s laptop.
Digital forensics specialists are now analyzing the surrendered data and the courts will determine whether the $1 million in bank drafts become part of Pleterski’s estate in the bankruptcy proceeding against him, according to Groot.
Going forward, the court has ordered Murphy to attend an examination under oath and to turn over a slew of financial information dating back to 2020 — including banking records, credit card statements, cryptocurrency accounts, and all funds received and transferred from both investors and Pleterski.
“This case still has a long way to go in order to preserve both the data and the assets we’re after,” said Groot.
This article was originally sourced from www.CBCNews.ca