Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Milowe Allen Brost, left, and Gary Allen Sorenson
Milowe Allen Brost, left, and Gary Allen Sorenson

SEC charges 6 in gold investment scheme Add to ...

Six men moved U.S. and Canadian investor money through bank accounts in Asia, Europe, North America and South America for a purportedly successful gold mining operation that in reality was a $300-million (U.S.) Ponzi scheme, U.S. market regulators said on Thursday.

In a civil fraud complaint, the Securities and Exchange Commission alleged four Canadians and two other men living in Florida presented themselves as an independent financial education firm that had discovered profitable investment opportunities with companies involved in gold mining.

More Related to this Story

They held seminars where they promised investors they could earn 18 per cent to 36 per cent annual returns by investing with these companies and they claimed the investments were fully collateralized by gold, the SEC said in the complaint filed in U.S. District Court in the Western District of Washington.

Cat:e528746c-3414-401a-b14b-50247e3bdf01Forum:d0fa4e14-88d2-41f9-8a19-896bdff9544b

It alleged that Milowe Allen Brost and Gary Allen Sorenson of Calgary were the primary architects and beneficiaries from duping 3,000 investors in the United States and Canada.

A Ponzi scheme is one in which early investors are paid with the money of new clients and the fraud collapses when redemption requests overwhelm the money available.

"Brost and Sorenson diverted investor funds for their personal benefit, using millions of dollars to purchase and renovate extravagant homes, ranches, and recreational vehicles," the SEC said in a statement.

Apart from Mr. Brost and Mr. Sorenson, the other charged are Larry Lee Adair of Fort Lauderdale, Fla.; Ward K. Capstick, a Canadian citizen who lives in Snohomish, Wash.; Bradley Dean Regier of Calgary; and Martin M. Werner of Boca Raton, Fla.

Lawyers for the six men could either not be immediately reached or located.

The SEC said investor money circulated through banks in the United States and Canada, the Bahamas, Belize, Bermuda, Ecuador, Honduras, Malaysia, Panama, Peru, Portugal and Venezuela.

The market regulator also charged four companies - Syndicated Gold Depository, Merendon Mining Corp. Ltd., Merendon Mining (Nevada) Inc. and the Institute for Financial Learning Group of Companies Inc.

Reuters

 

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular