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B.C. Ponzi scammer facing new charges

03/09/2012 01:50 EST | Updated 05/09/2012 05:12 EDT

A man fined for running a US$16 million Ponzi scheme appeared in Vancouver Provincial Court Thursday, faced with a new set of allegations.

The B.C. Securities Commission banned Hal Allan McLeod from trading in 2009 for his role in Manna, a fraud that targeted 800 mainly elderly investors, many who lived in B.C. McLeod was also fined $8 million and ordered to pay back investors.

The BCSC says the fines were never paid, and victims say they were told McLeod vanished. But he was arrested this week on a set of nine new charges sworn under the Securities Act.

McLeod, also known as Michael Carter Smith and Claude C. West, is accused of unlawful trading, acting unlawfully as an advisor and engaging in conduct relating to securities that he should have known was a fraud.

The charges are alleged to have occurred in 2010 and 2011 and are not related to the Manna Trading Ponzi Scheme.

Victim lost $10,000

Jerry Schaab invested a total of $20,000 in Manna. He says he lost $10,000 and never expected to see McLeod again.

"A guy like that has ruined so many lives. There were people that I know put $100,000 in there and never got nothing back. I mean people put their savings in there to get their investment and then he took it and they never got it back."

According to the 2009 BCSC order, Manna promised returns of up to seven per cent a month on their money.

Investors were told their funds would be places with experienced traders who had a long history of producing double-digit monthly returns through foreign currency trading.

Manna also told investors that some of the returns would be used to fund humanitarian causes - a big draw for many investors.

"All of these statements were misrepresentations," the order reads. "The reality is that Manna was a Ponzi scheme."

"Manna fraudulently used the investments of later investors to fund the promised returns to earlier investors, to pay commissions to affiliates and consultants, to invest in an online gaming business, and to buy real estate in Costa Rica."

Schaab says the BCSC organized a meeting for investors more than a year ago, but at that time there seemed like little hope of getting back any money. He says he was thrilled to hear McLeod is behind bars.

"Finally," Schaab said. "We've been trying to get him behind bars for years. And hopefully, they get him and throw the key away."

The B.C. Securities Commission would not comment on the new charges.

McLeod also faces a criminal charge sworn in Surrey last December for using a forged Alberta drivers license. A bail hearing is set for next Tuesday.

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