The Sûreté du Québec's operation unfolded on Thursday morning with raids in seven locations including homes, offices and a store. Police were tipped off by disgruntled investors.
"We're talking about more than a hundred people who could have fallen victim [to the scheme]," said SQ spokesman Sgt. Ronald McInnis. "What we know is that the first complaints to the Sûreté du Québec date back many months. After one complaint, two complaints and a third, you start suspecting that something wrong is happening."
The people arrested are suspected of having borrowed more than $14 million from investors and then using that money to repay different businesspeople in order to make them believe they were increasing the capital on their assets.
Sgt. McInnis said Ponzi schemes often come to an end after early investors complain that they are not getting paid. Businesses involved in the fraud tend to lose money because, eventually, the repayments they make are higher than the money they've borrowed.
About a hundred people claim to be victims to the scheme but investigators expect more people will come forward with complaints.Authorities said they would keep investigating the matter with the AMF, Quebec's financial market authority, and that more people could be arrested.