Alleged Ponzi scam worth $20 million, authorities report

Two Calgarians have been charged with fraud in connection with an alleged Ponzi scheme that netted more than $20 million from investors.

Following a decision by the Alberta Securities Commission, police claim Arnold Breitkreutz, 70, and Susan Way, 67, defrauded hundreds of Albertan investors by using their funds “contrary to what investors were told.”

Police say the pair took in more than $27 million in 2014 and 2015 and used the funds to pay off other investors instead of being used for mortgage lending.

“This has been an extremely complex investigation involving substantial resources, interviews and time,” Sgt. Doug Johnston with the RCMP serious and organized crime unit said in a release. “We are pleased to be able to conclude this investigation with charges.”

The ASC decision in March found Breitkreutz and Way ran a Ponzi scheme through Breitkreutz’s company, Base Finance. The RCMP began looking into Breitkreutz, Way and Base Finance in 2015 after the ASC brought a Ponzi scheme to law enforcement.

The commission said Breitkreutz and Way used Base Finance to deceive investors into thinking they were putting their money into mortgages held by the company, rather than in a loan to an undisclosed entrepreneur involved in U.S. oil and gas developments, according to the regulator panel’s decision.

Between 2004 and 2015, the operators of Base Finance raised more than $137 million from upwards of 250 investors.

Breitkreutz and Way have both been charged with fraud over $5,000 and theft over $5,000.

“Conditions of their release include not to contact certain investors, to report to the RCMP regularly, to surrender their passports and remain in Canada, and not to deal with land or money or securities of others,” police said in a release. The two will appear in court May 28 in Calgary.