ponzi scheme
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Investors who made money from an alleged Ponzi scheme are now facing efforts to claw back their gains, which would be shared with the larger group of investors that lost money.

In May 2023, the Supreme Court of British Columbia appointed PricewaterhouseCoopers Inc. (PwC) as receiver for a Victoria, B.C.-based mortgage brokerage, My Mortgage Auction Corp. (MMAC), and later that year, named the firm as its trustee in bankruptcy. 

Since then, according to court filings, PwC has determined that MMAC took in $301 million from investors, purportedly to finance bridge loans by the firm. 

Yet, it concluded that MMAC was a Ponzi scheme that never actually made any bridge loans. Instead, the scheme, which allegedly operated from 2018 to early 2023, paid returns to certain investors from other investors’ money, and diverted investors’ funds to other uses. 

Overall, it found that $210 million was paid out to various investors, while $91 million was lost in options trading, funding a failed business and to finance the lifestyle of the scheme’s alleged perpetrator.

Now, after analyzing approximately 65,000 banking transactions, PwC has concluded that 480 investors made profits in the scheme, while 1,229 investors lost money. 

The so-called winners from the scheme gained a combined $68.25 million, while the other investors lost a combined $149 million, it calculated. Another 81 investors received “preference payments” totalling $3.13 million, it said.

PwC said it will try to recover funds from the 561 investors that either made money on the scheme, or received these “preference payments.”

It’s seeking court orders requiring those investors to pay that money into the MMAC bankruptcy estate. A hearing has been scheduled for March 11 and 12 to consider its application.  

In 2023, the B.C. Securities Commission said it was investigating MMAC, but to date it hasn’t brought any enforcement allegations against the firm.

The allegation that the firm was operated as a Ponzi scheme hasn’t been proven in court.