'Crypto King' narrowly avoids arrest by handing over cellphones to bankruptcy proceeding

Whitby, Ont.'s self-described "Crypto King" was nearly arrested twice in the last two months for failing to comply with the bankruptcy proceeding against him and his company from 119 creditors who claim they're owed more than $25 million.

The bankruptcy trustee investigating what happened to millions that creditors gave Aiden Pleterski to invest took the "extraordinary remedy" of requesting arrest warrants for the 23-year-old after he failed to hand over his cellphones and other devices as ordered, according to newly released reports from trustee Grant Thornton Ltd.

It was only on the eve of those warrants being issued in September and earlier this month that Pleterski provided what was required at the "last minute."

The reports also show how the scope of the bankruptcy investigation has expanded to recovering assets from Pleterski's family and others including a Porsche, a Bentley and other luxury vehicles which the trustee discovered were paid for by Pleterski using investor funds.

Pleterski also appears to have been pursuing ownership of the Burlington, Ont., mansion he was renting for $45,000 a month, according to the trustee's reports.

More creditors are still coming forward.

"Some of the stories of the impact that the losses caused by Pleterski's alleged actions have on creditors are heartbreaking," Rob Stelzer, a senior vice-presidentwith Grant Thornton, writes in the report.

Creditors gave Pleterski money to invest in cryptocurrency and foreign exchange. The terms of investments often involved a 70-30 split on any capital gains between the investor and Pleterski, a commitment the initial investment would be paid back in full if it was lost, and target capital gains of 10 to 20 per cent biweekly, according to court documents and investor contracts.

Pleterski's lawyer Micheal Simaan previously told CBC Toronto his clientdisputes many of the claims against him and Pleterskibelieves the financial claims from many people who gave him money "have been wildly exaggerated." CBC Toronto contacted Simaan aboutthe latest developments by email on Tuesday, but hedeclined to comment.

In an August creditors meeting, the trustee stated that Pleterskihad claimed he lost most of the money given to him in late 2021 and early 2022 "in a series of margin calls and bad trades." When asked about his record-keeping for investments funds, Pleterski told the meeting he was very unorganized, did not keep track of his finances and didn't keep a record of his indebtedness or payments.

Last month, a CBC Toronto investigation revealed how the young man, dubbed "the Crypto King" in several paid-for promotional articles, was living a luxurious lifestyle before investors came looking for their money earlier this year. At the time, records showed how Pleterski owned 11 vehicles, was leasing four other luxury cars, flew on private jets, and was paying $45,000 a month to rent a lakefront mansion in Burlington, Ont.

"This guy had a large lifestyle burn rate, but it doesn't account for the amount of money that's missing," fraud recovery lawyer Norman Groot previously told CBC Toronto.

Two McLarens, two BMWs and a Lamborghini made up just a few of the $2 million worth of assets previously seized by the trustee.

Pleterski's family driving luxury vehicles

The new reports detail more undisclosed assets uncovered by the trustee, including jewelry and five luxury vehicles connected to Pleterski's family. The cars include a Porsche Boxster and Audi e-tron driven by Pleterski's mother, an Audi S5 driven by Pleterski's brother and a BMW M8 and a Bentley Bentayga driven by Pleterski's father.

Investigators are also looking into the ownership of the lakefront mansion where Pleterski lived. According to a report, the trustee confirmed Pleterski entered into an agreement of purchase and sale and lease to own with a numbered company owned by Sunray Group of Hotels for the Burlington, Ont., property.

The trustee discovered that Pleterski transferred a McLaren Senna with a potential market value of $1.5 million to Sunray Group of Hotels as collateral for the lease to own agreement for the lakefront mansion.

Since CBC Toronto's investigation was published last month, the number of investors in the bankruptcy proceeding has ballooned from 29 claiming $13 million to nearly 120 creditors who say they're owed more than $25 million.

Bankruptcy unlikely to recover all investments

Going forward, the trustee is seeking court orders to combine the bankruptcies of Pleterski and his company, to direct several banks to provide further information about Pleterski's bank transactions and compel car dealers to provide financial documents about vehicles driven by Pleterski's family. Those matters will be before the court later this week.

Pleterski's investors are also facing a Nov. 22 deadline to prove how much they're owed in the bankruptcy proceeding. However, the trustee said in a letter to creditors that nothing is expected to be paid out until at least next year and there will be losses.

"Creditors should be cautioned that any dividend paid will be far less than the amounts they are owed."