Second arrest in Ponzi scam

The second suspect in an alleged $400 million Ponzi scheme was arrested Sept. 29 at the Calgary International airport.

  • Oct. 6, 2009 6:00 a.m.

By Jasmine Franklin

The second suspect in an alleged $400 million Ponzi scheme was arrested Sept. 29 at the Calgary International airport.

Gary Sorenson, 66, of Calgary, was arrested after police arranged to have him brought back from Honduras where he was believed to have been staying. He was released on bail for $300,000 or $150,000 cash and in addition had to surrender his Canadian passport and any other travel document.

“This arrest is an important milestone in out investigation,” said Eric Mattson, superintendent with Integrated Market Enforcement Team.

Milow Brost, 55, of Chestermere, was arrested Sept. 13 as the other alleged suspect in what’s being called Canada’s largest alleged Ponzi scheme. Between 1999 and Dec. 31, 2008 the men allegedly bilked up to $400 million from investors in Canada, the United States, and internationally.

Even in Ponoka the scam was felt.

Val Wagner, an educational assitant at Ponoka Composite High School felt the effects of the Ponzi scheme first hand after she invested the $100,000 she received from her late husband Dan, into the scam group.

The two men allegedly created Syndicated Gold Depository S.A, a business that based itself on gold. An agreement was formed to loan money to Merendon Mining Corporation Ltd. for a promise of a high return rate.

High return rate promises and tax advantages led investors into placing their money in offshore shell companies.

RCMP had been investigating the scam for 3½ years.

Both men have been charged with fraud over $5,000 and theft over $5,000. If they are convicted they could face sentences up to 14 years.

A court date is set for Oct. 19.

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