Suspect in Canada's largest Ponzi scheme arrested

Gary Sorenson, wanted for his alleged role in a Ponzi-type scheme that bilked investors of $100 million, has been arrested at Calgary International Airport.

Sorenson, 66, was taken into custody as he stepped off a private plane Tuesday, said the RCMP.

RCMP Supt. Eric Mattson said Sorensen returned to Canada voluntarily after negotiations that had been going on for "a while" amonghis lawyer, Alberta Justice Special Prosecutions and the Public Prosecution Service of Canada.

Police did not disclose where Sorenson travelled from, other than to say it was from outside Canada. The suspect's last known address was in Honduras, where his company, Merendon Mining Corp., was based.

After being charged with fraud over $5,000 and theft over $5,000, Sorenson was released on bail of either a$300,000 surety or $150,000 in cash.

A justice of the peace ordered Sorenson to:

• Surrender his Canadian passport and other travel documents.
• Report weekly to the RCMP.
• Remain in Alberta.
• Live at an address approved by the authorities.
• And refrain from communicating with people on a list provided by the RCMP.

"This arrest is an important milestone in our investigation," Mattson said Tuesday about what "appears to be the largest Ponzi-type scheme" in Canadian history.

Sorenson is the second Alberta man arrested in the alleged pyramid sales scam in which the original investors are paid off by new investors.

Milowe Brost, 55, was arrested Sept. 13 on the same two criminal charges as Sorenson, which carry a prison sentence of up to 14 years each. He has also been released on bail.

Involved thousands of investors

The pair is accused of bilking 3,000 people in Canada, the U.S. and overseas out of $100 million and possibly up to $400 million between 1999 and 2008.

Police said the two men created a business, Syndicated Gold Depository S.A., then formed an agreement to lend money to Merendon Mining with a promise of a high rate of return.

Lured by the promise of high returns, investors were then enticed into offshore shell companies marketed by Brost's firms, Capital Alternatives Inc. and Institute for Financial Learning Group of Companies Inc., said the RCMP.

The shell companies included:

• Asset Trax Inc.
• Quatro Communications Corp.
• Rapid Express Corp.
• Strategic Metals Corp.
• Merendon Mining (Nevada) Inc.

Alberta RCMP are asking anyone who may have been a victim of the alleged scheme to come forward with information.