Suspect held in Red Deer over alleged $10M fraud

Mobile light towers sold and rented multiple times

The prospect of riches from mobile industrial lighting blinded investors who were bilked for more than $10 million in probably the largest fraud scheme ever uncovered in central Alberta, say RCMP.

The Ponzi-like scheme reached from Canada into the U.S., with those cross-border victims bringing in the U.S. Secret Service to help break it up, say Red Deer Mounties.

The scam used existing mobile light towers proffered by a firm called Silvertip Energy Inc., which sold or rented the same equipment multiple times on paper to investors and also offered devices that had never been manufactured.

Initial investors received some of their money back from those coming after them, until interest in the scheme dried up, said RCMP Const. Jody Young.

“It was a fraud consisting of selling more light towers than there were,” she said.

“It’s a pretty large number of individuals who have been impacted … from what I’ve been exposed to as a police officer in 14 years, this is the largest one of these I’m aware of.”

From 2013 to 2016, five individuals lost about $4 million while at least four corporations in the U.S. and Canada were taken for another $6.2 million, say RCMP.

20-MONTH INVESTIGATION

At the end of a 20-month investigation, RCMP seized documents linked to the investments along with electronic evidence.

The mobile lighting towers meant to illuminate oil and gas or construction sites “ended up back in the possession of some of the victims,” said Young.

Even so, despite an existing process for investors to retrieve their lost funds, “there isn’t a guarantee any of those people will get their money back,” she added.

Last Tuesday, RCMP raided a home on C&E Trail north of Red Deer where they arrested Joshua James Tenhove, 45, who is charged with money laundering, three counts of fraud over $5,000 and possession of property obtained by crime over $5,000.

He’s to appear in Red Deer Provincial Court on Jan. 15.

The investigation also included the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the U.S. Secret Service, which not only protects political leaders but guards that country’s financial and critical infrastructure.