Aiden Pleterski and his company allegedly owe $35M to more than 140 investors.
Two McLarens, two BMWs and a Lamborghini make up just a few of the $2 million worth of assets seized from a 23-year-old from Whitby, Ont., as his investors try to recoup millions of dollars they handed over to the self-described “Crypto King.”
But so far, Aiden Pleterski’s assets fall far short of what his investors claim they’re owed.
Creditors are working 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, according to a fraud recovery lawyer and documents filed in two separate actions reviewed by CBC Toronto.
Diane Moore invested $60,000 she had earmarked for her grandchildren’s education after meeting Pleterski through someone she’d known for years. Now she’s out $50,000.
“The whole thing was based on trust,” Moore said. “What Aiden has done, I think, is awful — and I don’t know how he can live with himself.”
The terms of Moore’s investment included a 70-30 split on any capital gains (with 70 per cent for her and 30 per cent for Pleterski), a commitment the initial investment would be paid back in full if it was lost, and target capital gains of 10 to 20 per cent biweekly, according to her investment contract.
“I don’t know if he was ever really trading,” Moore said. “Or was this his plan and it was just the story to get me in along with other people?”
The 65-year-old from Clarington, Ont., is now one of 29 creditors claiming they’re owed nearly $13 million in a bankruptcy proceeding against Pleterski. In a lawsuit, another investor who claims to be out $4.5 million obtained a Mareva injunction, which effectively freezes Pleterski’s assets and bank accounts worldwide.
Roughly 140 investors who handed over a collective $20 million responded to a call-out for information from a fraud recovery law firm investigating Pleterski, some of whom are involved in the bankruptcy process.
“It was a huge surprise, we’ve never had a response like this,” said Norman Groot, founder of Investigation Counsel PC, which only represents alleged victims of fraud.
Rented lakefront mansion for $45K a month
Through a bankruptcy trustee’s report, creditors meeting minutes, court filings, and complaints made to Groot’s firm, a picture emerges of Pleterski’s luxurious life before things fell apart. The young man, dubbed “the Crypto King” in several paid-for promotional articles, owned 11 vehicles, was leasing four other luxury cars, flew on private jets, and was paying $45,000 a month to rent a lakefront mansion in Burlington, Ont.
“This guy had a large lifestyle burn rate, but it doesn’t account for the amount of money that’s missing,” Groot told CBC Toronto.
“What’s difficult with this particular case is that Pleterski was taking in a lot of cash — and how do you trace cash?”
The bankruptcy proceeding against him is the only recovery process for investors right now, because it takes precedence over the civil claims against Pleterski.
Investors questioned Pleterski at length in the first creditors meeting — which ran more than five hours — in late August, according to the meeting’s minutes. When asked why he continued to invest money when he knew he couldn’t repay his current investors, Pleterski told the meeting he “was a 20-something-year-old kid.”
Pleterski didn’t respond to requests for comment for this story.
Financial claims ‘wildly exaggerated’: Pleterski’s lawyer
In an email, Pleterski’s lawyer told CBC Toronto that his client disputes many of the claims against him and believes the financial claims from many people who gave him money “have been wildly exaggerated.” Pleterski started investing in cryptocurrency as a teenager and people gave him money to invest once they saw how much money he was making for himself and people around him — but he never solicited money, according to his lawyer Micheal Simaan.
“Shockingly, it seems that nobody bothered to consider what would happen if the cryptocurrency market plummeted or whether Aiden, as a very young man, was qualified to handle these types of investments,” wrote Simaan.
“Aiden has been co-operating with the bankruptcy process and is hopeful that it will work out in the most equitable fashion for everyone involved.”
In the creditors meeting, the trustee stated that Pleterski claimed he lost most of the money given to him in late 2021 and early 2022 “in a series of margin calls and bad trades.” But as of Aug. 29, the trustee hadn’t received anything to support that — despite requesting evidence of trades and bank statements from Pleterski.
When asked about his record-keeping for investments funds, Pleterski told the meeting he was very unorganized, did not keep track of his finances and didn’t keep a record of his indebtedness or payments.
Never owned a watch worth more than $600K
Investors also asked about a number of potential assets, including luxury cars, watches and gold bars. When asked if he had ever owned a Patek Philippe watch — and if he did, what happened to it — Pleterski told the meeting he’d never owned a Patek Philippe watch and that “he has never owned a watch with a value greater than $600,000.”
CBC Toronto also reviewed the Mareva injunction that was ordered as part of an investor-led lawsuit against Pleterski before the lawsuit was superseded by the bankruptcy proceeding.
In the ruling that granted the injunction, Ontario Superior Court Justice Phillip Sutherland lays out the investor’s claim that he was provided with pictures and video of statements from a foreign exchange/cryptocurrency trading platform showing $311 million in the account of Pleterski’s company. But when the investor checked with the trading platform independently, he was told Pleterski and his company did not have accounts with such funds, according to the court decision.
Like Moore, the investor from the lawsuit claims the terms of the investment involved a 70-30 per cent split on capital gains and if the funds were lost the full initial investment would be repaid to the investor in biweekly installments. The goal for the capital gains would be 10-20 per cent growth biweekly.
‘If it’s too good to be true, it likely is not true’
Groot, a certified fraud examiner for more than 20 years, says most of the funds given to Pleterski were provided when cryptocurrency was on a market rise last year, and there was a “greed factor or an excitement factor” involved.
“If it’s too good to be true, it likely is not true,” he said.
“Five per cent interest [a week] is not available on the open market. A 23-year-old kid is unlikely to be the next Bill Gates — talk to somebody who is conservative and get a second opinion.”
Besides the bankruptcy, Groot says the only other avenue available for investors would be to make reports to the Ontario Securities Commission and the police.
“Those processes are lengthy,” Groot said. “The more time that goes by, the less likely there’s a recovery of evidence — and less likely there’s a recovery of money.”
The lawyer told CBC Toronto that many investors who contacted his firm have reported Pleterski to police across the Greater Toronto Area. For her part, Moore says she — and investors who heard about the opportunity from her — filed a report with Durham Regional Police.
Unlike Moore, some of those investors borrowed their investment funds from a line of credit.
“I feel awful for them,” Moore said. “I just wish I’d never mentioned it.”
This article was originally sourced by www.cbc.ca