CALGARY, Alberta (Reuters) - Canadian police arrested the second of two men accused of masterminding a Ponzi scheme that bilked investors out as much as C$400 million ($367 million) as he stepped off a plane on Tuesday after weeks outside the country.
Gary Sorenson, whose whereabouts had been unknown since police busted the alleged swindle two weeks ago, was charged with fraud and theft in a Calgary court, the Royal Canadian Mounted Police said.
He was released on bail and forced to hand over his passport. Sorenson faces up to 14 years in prison if convicted
on all counts.
“This arrest is an important milestone in our investigation,” RCMP Superintendent Eric Mattson said in a statement. “We worked closely with Alberta Justice’s Special Prosecutions and the Public Prosecution Services of Canada in ensuring Sorenson’s return to Canada.”
Sorenson, 66, has residences and businesses in Canada and in Honduras, where police said he may have gone when the Ponzi scheme came to light.
Milowe Brost, who was arrested earlier this month, is believed to be Sorenson’s partner in the alleged scam. He faces the same charges.
Investigators say the men took investors’ money by operating several companies, including Syndicated Gold Depository SA, Merendon Mining Corp Ltd, and the Institute for Financial Learning, and promising high returns.
Officials in at least two Canadian provinces and the United States have investigated the two men for several years and they have been subject to a variety of civil disciplinary actions, according to government documents.
In a Ponzi scheme, money from new investors is used to pay off old ones, with the operators taking much of the cash. The old con game gained new notoriety following last year’s arrest of U.S. financier Bernard Madoff.
Reporting by Jeffrey Jones; editing by Rob Wilson