Edmonton man charged in $5.5 million Ponzi scheme

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July 24, 2018 (Courtesy of CBC.ca) – Edmonton police say they have uncovered a multi-million dollar Ponzi scheme involving hundreds of fraudulent mortgage loans.

Police allege Timothy Carruthers facilitated 257 fraudulent bridge mortgage loans worth a total of $5.5 million between January 2009 and June 2017.

Timothy Carruthers used the company name Wakina Consulting Inc. to carry out an alleged ponzi scheme valued at $5.5 million.

The fraud investigations unit charged the 59-year-old with 22 counts of fraud over $5,000 following a two-year investigation.

None of the allegations have been proven in court.

According to police, Carruthers posed as a lender, using the company Wakina Consulting Inc., and was able to convince the investors the loans were legitimate by using publicly available land title documents.

“Typically, people who are capable of committing frauds at this level understand the business, so it makes them very believable,” said Det. Linda Herczeg of the fraud investigations unit.

Investors were promised monthly interest payments and administration fees on loans that the real homeowners had never actually taken out with Wakina Consulting. The homeowners, meanwhile, had no idea their information was being used, according to police.

The website for Wakina Consulting Inc., preserved in internet archives but no longer searchable, claims to have offered financial planning services for more than 30 years. The website lists an address located in the Morin Industrial area, in west Edmonton.

The archived entries go back to 2003 and list several associates with the company, including a Tim Carruthers.

There are no entries for nearly five years but they reappear in January 2010, a year after alleged frauds began.

Those entries don’t list any associates, with one exception. An archived entry from June 20, 2010, includes a biography for a Tim Carruthers.

“Tim has provided personal finance and tax advice since 1984 and he established an advice-only financial planning practice in 1997,” the website reads.

“He assists clients in a wide variety of financial circumstances and has extensive experience with senior executives, families, trusts and estates,” it continues.

A Ponzi scheme is when a person lures investors into financing their project, in this case a bridge mortgage loan, and pays profits to earlier investors using money they received from later investors.

The particular scheme allegedly started to unravel when an investor did not receive the money they were promised. The investor then started looking into the contact and uncovered fraudulent documentation, police allege, which they brought to the attention of the authorities.

Bernie Budney, president of Best Rate Mortgage Corporation, said professional investors would usually ask for more than just publicly available documents before financing a bridge loan.

“They really had to place their trust in this individual to just go with what he was saying,” Budney said, after reviewing the media release.

Police said the investors don’t fit one profile and include businesses, couples and individuals.

The police believe Carruthers may have defrauded others and are asking anyone with additional complaints to come forward.