The British Columbia Securities Commission has levied a $6.3-million fine against two men and their associated companies for running what it determined was a Ponzi Scheme
Ponzi Scheme
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
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The panel's order has named Richmond resident Todd Norman John Bezzasso as the mastermind behind the scam, having raised roughly $5 million from 85 investors between February 2015 and March 2016. Bezzasso solicited investments for two companies he controlled: Bezzaz Holdings Group Ltd. and Nexus Global Trading Ltd.
In a news release, BCSC said Bezzasso engaged fellow Richmond resident Wei Kai Liao, also known as Kevin, worked with him to raise the funds for the Ponzi scheme.
While it was actually running a Ponzi scheme, the defendants claimed that these funds would participate in various business interests including the sale of health supplements and e-cigarettes. Promotional materials for investors promised returns of between five and 30 percent, payable through postdated cheques.
The BCSC concluded that Bezzasso and his two companies had committed fraud against all 85 investors. As a result of his misconduct, he was ordered to pay an administrative penalty of $4.5 million. In addition, the regulator handed down another decision to hit Bezzasso, Bezzaz and Nexus with a joint penalty of $1.6 million.
The commission panel also determined that Liao committed fraud against one investor by failing to tell him about repayment problems that other investors in the scheme had been facing. His actions in raising money for investors also amounted to trading in securities, something Liao was not licensed to do, the BCSC said.
Instead of using the investors’ funds for business purposes, the fraudsters misappropriated all of the pool participants’ funds, which were largely spent on personal expenses. As also charged, they used some new investors’ funds to pay back other investors in a Ponzi-like fashion, so that they would invest or refer additional money, thereby allowing the scheme to continue for a longer period of time.
In its sanctions decision, the panel noted that although both defendants were never licensed to trade securities, the commission permanently banned Bezzasso and prohibited Liao for 15 years from Canada’s capital markets, act as director or advisors of a registered company.
The British Columbia Securities Commission has levied a $6.3-million fine against two men and their associated companies for running what it determined was a Ponzi Scheme
Ponzi Scheme
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities.
Read this Term.
The panel's order has named Richmond resident Todd Norman John Bezzasso as the mastermind behind the scam, having raised roughly $5 million from 85 investors between February 2015 and March 2016. Bezzasso solicited investments for two companies he controlled: Bezzaz Holdings Group Ltd. and Nexus Global Trading Ltd.
In a news release, BCSC said Bezzasso engaged fellow Richmond resident Wei Kai Liao, also known as Kevin, worked with him to raise the funds for the Ponzi scheme.
While it was actually running a Ponzi scheme, the defendants claimed that these funds would participate in various business interests including the sale of health supplements and e-cigarettes. Promotional materials for investors promised returns of between five and 30 percent, payable through postdated cheques.
The BCSC concluded that Bezzasso and his two companies had committed fraud against all 85 investors. As a result of his misconduct, he was ordered to pay an administrative penalty of $4.5 million. In addition, the regulator handed down another decision to hit Bezzasso, Bezzaz and Nexus with a joint penalty of $1.6 million.
The commission panel also determined that Liao committed fraud against one investor by failing to tell him about repayment problems that other investors in the scheme had been facing. His actions in raising money for investors also amounted to trading in securities, something Liao was not licensed to do, the BCSC said.
Instead of using the investors’ funds for business purposes, the fraudsters misappropriated all of the pool participants’ funds, which were largely spent on personal expenses. As also charged, they used some new investors’ funds to pay back other investors in a Ponzi-like fashion, so that they would invest or refer additional money, thereby allowing the scheme to continue for a longer period of time.
In its sanctions decision, the panel noted that although both defendants were never licensed to trade securities, the commission permanently banned Bezzasso and prohibited Liao for 15 years from Canada’s capital markets, act as director or advisors of a registered company.
