08/23/2012 08:40 EDT | Updated 10/23/2012 05:12 EDT

U.S. man wanted on fraud charges arrested in Toronto

An American man wanted in the U.S. for fraud has been arrested in Toronto, after allegedly using charities for disadvantaged children to get money.

Brian Ray Dinning was arrested earlier this week at a home he was renting in the Beach neighbourhood. Police allege Dinning defrauded people in the U.S. and Canada of about $2.5 million.

The 47-year-old tax attorney is wanted in the U.S. on 25 counts of wire-fraud offences dating back to 2005. The FBI suspects he was also operating a Ponzi scheme.

"What they're alleging is Mr. Dinning offered people investments in commercial developments and real estate developments in South Africa when in fact he was constructing a Ponzi scheme where there's really no chance of any return," said Toronto police Det.-Sgt. Cameron Field, who works in the financial crimes unit.

Dinning is in custody awaiting extradition. Police believe Dinning entered Canada in May. The State of Virginia had issued a warrant for Dinning’s arrest on Wednesday, June 6, 2012.

His wife, Sommer Dinning, offered CBC News a brief statement.

"We have a couple of attorneys working with us, great attorneys working with us right now," she said. "And they're handling the matter the best they can. And this is a family matter that we would like everybody's respect, to stay away."

In a blog post, Dinning claims his social venture projects in Africa were hindered by people he was working with including drug-using financial partners.