Pyramid Scheme Raked in $90 Million
CBJ — The Globe & Mail is reporting that Toronto police have charged two men with operating one of the largest pyramid schemes in Canadian history.
According to police the men allegedly raised more than $90 million U.S. from international investors in a global scam focusing mainly on banner advertisements on websites.
Christopher Smith, 45, of Toronto and Rajiv Dixit, 45, of Vancouver have been charged with fraud, possession of the proceeds of crime and laundering the proceeds of crime, all laid under the Criminal Code. They are also charged with operating a pyramid scheme and making false representations under Canada’s Competition Act.
A pyramid scheme, which is 100% illegal, lures participants to recruit new investors by promising to share a portion of the funds raised from new recruits, building a pyramid of people collecting money from those coming in on the ground level. Inevitably, however, someone always ends up at the bottom when the scheme falls apart and is left holding the expensive bag. There is almost always no recourse in terms of returned compensation for money lost, as those participating had engaged in illegally activity in the first place — upon their own risk.