Victims of a British Columbia Ponzi scheme have been reunited with some of their lost cash, thanks to the province's Civil Forfeiture Office.
Each of the 37 Canadian victims has received a cheque after a total of $190,121 was lost in 2003 to two separate B.C. companies.
The BC Securities Commission said that for seven months, Wellspring Capital Group and Springpay offered investment programs to residents in B.C. and elsewhere in Canada that promised returns on people's investments through business transactions.
The programs offered involved financing for new vehicles, payroll deductions and a business expense reduction program. The companies found investors mostly through word-of-mouth promotion.
But while victims believed they were backing legitimate projects, it was revealed that the only new income was coming from new investors being brought in to the scheme.
Blake Prater, a U.S. director for both companies, was given a 10-year jail term in March 2007 for security fraud offences related to those carried out by Wellspring and Springpay in Canada. Both companies later admitted operating a Ponzi scheme.
A tip from U.S. authorities led B.C. watchdogs to several bank accounts here that were then frozen. The case was then passed on to B.C.'s Civil Forfeiture Office.
Reimbursed amounts range from $250 to $50,120, with the average claim just over $5,100.
Solicitor General Shirley Bond said the payouts are a satisfying end to the case that spanned two countries and more than eight years.
"Too often, we read about people who are at or near the end of their working lives, who have lost a significant amount of money in what they thought was a legitimate investment. The happy ending here is that the victims got all of their initial investment back," Bond said in a statement.
"Still, I think it bears repeating that, if an investment opportunity seems too good to be true, it probably is."
In five years of operating its forfeiture program, the province has returned almost $700,000 to victims directly linked to forfeited assets.
