NEWS

RCMP allege Ponzi scheme afoot at Seaquest Capital

01/30/2015 03:38 EST | Updated 04/01/2015 05:59 EDT
Five former executives of Seaquest Capital Corporation have been arrested and charged by the RCMP's Toronto financial crimes unit.

Seaquest and its related companies are privately owned corporate and commercial lenders for short-term funding for companies that can't access financing from banks. It then collects money from investors promising a return from the lending practices.

In November 2011, Seaquest declared it was unable to pay its creditors after amassing a debt of $75 million owed to approximately 70 creditors. It initiated bankruptcy proceedings.

After a three-year investigation by the RCMP, it is alleged that Seaquest was running a Ponzi scheme, in which there were many investors but few investments.

Seaquest collected $92 million from investors with the promise rates of returns up to 36 per cent. New investor funds were used to pay old investors, and previous investors were then convinced to reinvest those returns, say the RCMP.

Charges of fraud over $5,000, money laundering, and commission of offence for criminal organization were levied against:

- David Holden, 52, of Richmond Hill

- Rose/Rosa Rita Holden, 57, of Richmond Hill

- Anthony Mario Cosentino, 67, of Toronto

- Andrew Gaudet, 43, of Oakville

- Edmond Chin Ho So, 37, of Toronto

Additionally David and Rose Holden, former leaders of the now-defunct company, have been charged with three additional bankruptcy charges.

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