Toronto (September 18, 2019) – The Ponzi scammer Steven Joshua Nowack who posed as a highly successful foreign exchange trader has been convicted to nine years in jail on Tuesday. A jury found him guilty on 12 counts of fraud over $5,000. He defrauded his victims out of a total of $15.6 million and has first been arrested six years ago.
Steven Joshua Nowack from Toronto conducted a multi-million Ponzi scam between November 2009 and July 2013. In this period, he defrauded 12 former clients out of $15.6 million pretending to trade with their investment on foreign currency exchange. In reality ‘[t]he currency trading was a fig leaf for the real business of fraud,’ Judge Robert Goldstein said in the sentencing hearing. The investigation revealed that the 56-year-old used at least $2.7 million of the money for his own purposes. A jury found the Ponzi scammer guilty on 12 counts of fraud over $5,000 on September 17.
Nowack posed as a highly successful currency trader. He convinced his victims to hand over huge amounts of money, in some cases millions, to invest it based on a methodology he claimed to have developed to make enormous profits on foreign currency exchange markets. To win his victims over, he did not flinch from using fake demonstration accounts that showed vast profits or from forging emails.
“Mr. Nowack testified that he has a gift for making money. He certainly does have a gift but that is not it. His gift is the ability to deceive people into parting with their money.”
Justice R. F. Goldstein in the Reasons For Sentence
Most of Nowack’s victims signed a contract with him that allowed him to keep 37.5 percent of the profits, expecting huge amounts. But in reality, over the four years, he lost about $23 million on a U.K. based online trading platform, according to the Star. In the manner of a classic Ponzi, he used part of the money from his investors to pay a return to others. Only a few months before he was arrested in 2013, the currency exchange froze his trading because his account was $850,000 in the red.
In sum, about $25 million of the investor’s money could be identified in the investigation which was transferred to online trading accounts. Of that amount, the 12 victims in this criminal case contributed $15.6 million. One of his victims, David Weenen, complaint to the police in August 2013 after repeatedly asking Nowack to pay his money back or cash out the promised returns. His police report started the fraud investigation by the Toronto Police and the Ontario Securities Commission (OSC).
“Mr. Nowack perpetrated a scam designed to part people from their money.”
Justice R. F. Goldstein in the Reasons For Sentence
Several of the complainants in this criminal trial have already civil judgments against him. However, he has not paid any of his victims back yet. Lawyer Norman Groot of Investigation Counsel PC advised: ‘Our firm represented eight of the victims of Mr. Nowack’s scheme. The civil recovery efforts ended up in contempt of court findings as Mr. Nowack obstructed the civil tracing efforts of some of the victims. The focus is now transitioning to the claim of Dr. Rynties as against Forex Capital Markets Ltd. which was issued back in 2015 but has not been prosecuted pending the evidence given by the witnesses in the criminal proceeding.”
Six years after Nowack has been arrested, the Ponzi scammer has been convicted to nine years in prison and ordered to pay $14.5 million in restitution to his victims. Additionally, he was fined $15.6 million which will be reduced by the amount, he pays his victims in restitution. After his release, he has three years to pay the amount, otherwise, he could be reimprisoned for potential seven more years. Furthermore, Nowack is prohibited for life from having authority over other people’s money.
“Mr. Nowack is a victimizer, not a victim.”
Justice R. F. Goldstein in the Reasons For Sentence
During the trial, he maintained his innocence claiming that his victims were aware of the high-risk that came with his business venture. The National Post reported that Nowack intends to appeal the sentence.
