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.