The RCMP have charged four people from Alberta with fraud and money laundering in connection with a $60 million Ponzi scheme in which about 1,000 investors from Canada and the U.S. were allegedly defrauded.
Garth Bailey, Murray Stark and Robert Fly were charged with conspiracy to commit fraud and money laundering. A fourth person, Katherine Bailey, was charged with money laundering. According to the RCMP, investors were told that their investments were risk-free and were secured by bonds that could be liquidated if the investments failed. The investments were allegedly managed by HMS Financial Inc. from 2001 to 2004.
Garth Bailey is a lawyer who is currently suspended from practicing law in Alberta. RCMP investigated HMS Financial for 6 years before laying these charges – the delay was partly attributed to the fact that some investors were reluctant to come forward.