Do I drop this dime?
March 30, 2009 3:58 PM Subscribe
I worked for a man running a Ponzi scheme. The catch (well there are several) is that the scam seems to still be going on! I left when I realized that things were hinky but I now KNOW that it was a Ponzi scheme, I have reported this anonymously to the relevant Canadian authorities (Ontario Securities Commission). Have I done my part? What do I do now?
At the end of 2008 I worked/was the finance department of a small group of companies for 10 weeks. I was hired to perform payroll and AR duties but when I began it was clear that I was to be performing ALL financial accounting activities. Previously there had been several people keeping the books who had all left at around the same time. This in itself is a major warning sign but I thought it was because the company was doing poorly financially.
Anyways my first week was spent collecting all the Quickbook files, documents and setting up my office in the brand new building. At first I see that all the companies that I had files for were running at a $200,000 + annual loss for the last 3 years. This sent me to see the companies’ accountant (a reputable agency) where I voiced my concerns that people seem to be investing in companies that make no money and therefore their "interest" payments were technically paid from new investment capital. The accountant told me not to worry, that it was okay because there was a "genuine expectation of future profit [from the investments and companies]".
I hired some temp workers (skilled bookkeepers) to help me put together the files which were the worst that I had ever seen. Throughout this I am juggling phone calls from “investors” who are looking for their payments. I have no records of these investments (see state of records above) so I assumed that this was due to disorganization. As the files became organized it became clear that the boss had taken upwards of 13 million dollars from investors to buy hotels, invest in the companies etc… but the money was ALL spent on operating costs, new start up companies, the owners lavish lifestyle (mansion, limos, fancy company offices, etc…) there WAS only one investment ever made (a small bed and breakfast). At this point the new money was drying up so more and more interest payments were missed, staff was not paid and I completed the layoff forms for the unpaid staff (so they could collect unemployment) and left.
Now for the question(s): Am I free and clear of this mess? Do I have a responsibility (morally, ethically or otherwise) to go to the police? Could I be liable for any investor’s losses? (I met some of them in person but NEVER lied to anyone).
Please send any questions to ponziproblem@gmail.com
One more thing: Despite being a sleazy criminal the owner loves to sue people that he thinks have done him harm and I am not in a position (being unemployed and all) to pay the associated legal fees, so I am reluctant come forward publicly.
At the end of 2008 I worked/was the finance department of a small group of companies for 10 weeks. I was hired to perform payroll and AR duties but when I began it was clear that I was to be performing ALL financial accounting activities. Previously there had been several people keeping the books who had all left at around the same time. This in itself is a major warning sign but I thought it was because the company was doing poorly financially.
Anyways my first week was spent collecting all the Quickbook files, documents and setting up my office in the brand new building. At first I see that all the companies that I had files for were running at a $200,000 + annual loss for the last 3 years. This sent me to see the companies’ accountant (a reputable agency) where I voiced my concerns that people seem to be investing in companies that make no money and therefore their "interest" payments were technically paid from new investment capital. The accountant told me not to worry, that it was okay because there was a "genuine expectation of future profit [from the investments and companies]".
I hired some temp workers (skilled bookkeepers) to help me put together the files which were the worst that I had ever seen. Throughout this I am juggling phone calls from “investors” who are looking for their payments. I have no records of these investments (see state of records above) so I assumed that this was due to disorganization. As the files became organized it became clear that the boss had taken upwards of 13 million dollars from investors to buy hotels, invest in the companies etc… but the money was ALL spent on operating costs, new start up companies, the owners lavish lifestyle (mansion, limos, fancy company offices, etc…) there WAS only one investment ever made (a small bed and breakfast). At this point the new money was drying up so more and more interest payments were missed, staff was not paid and I completed the layoff forms for the unpaid staff (so they could collect unemployment) and left.
Now for the question(s): Am I free and clear of this mess? Do I have a responsibility (morally, ethically or otherwise) to go to the police? Could I be liable for any investor’s losses? (I met some of them in person but NEVER lied to anyone).
Please send any questions to ponziproblem@gmail.com
One more thing: Despite being a sleazy criminal the owner loves to sue people that he thinks have done him harm and I am not in a position (being unemployed and all) to pay the associated legal fees, so I am reluctant come forward publicly.
This post was deleted for the following reason: poster's request -- jessamyn
Probably too much identifying detail here.
No you have no responsibility except to work with the watchdog, who will tell you any furher requirements they have of you. Otherwise you muck up their case! You also have a responsibility to lawyer the fuck up.
posted by By The Grace of God at 4:06 PM on March 30, 2009
No you have no responsibility except to work with the watchdog, who will tell you any furher requirements they have of you. Otherwise you muck up their case! You also have a responsibility to lawyer the fuck up.
posted by By The Grace of God at 4:06 PM on March 30, 2009
Oops. Forgot the link to the lawyer referral service: http://www.lsuc.on.ca/public/a/faqs---lawyer-referral-service/
posted by winston at 4:06 PM on March 30, 2009
posted by winston at 4:06 PM on March 30, 2009
I'm sure that there are some lawyers that would love to take you on as a client in return for the amazing publicity they could get from being your spokesperson.
posted by Pants! at 4:16 PM on March 30, 2009 [1 favorite]
posted by Pants! at 4:16 PM on March 30, 2009 [1 favorite]
Winston is correct: you need to talk to a lawyer ASAP. Tell the lawyer everything you've written here, and all other details. Do not delay. Talk to a lawyer.
posted by ornate insect at 5:30 PM on March 30, 2009
posted by ornate insect at 5:30 PM on March 30, 2009
Nth the lawyer; print this thread out and show it to him/her, too. If you've put enough info in here that the person could be easily identified based on it ... well, I'd just talk to a lawyer is all.
posted by brina at 6:10 PM on March 30, 2009
posted by brina at 6:10 PM on March 30, 2009
....and I'd ask MF to delete this question. Not sure of their policy, but if you ask nicely......
posted by jimmyjimjim at 6:15 PM on March 30, 2009
posted by jimmyjimjim at 6:15 PM on March 30, 2009
Having worked for a firm related (but not directly responsible) to the largest ponzi scheme in American history, get a lawyer!! I am not a lawyer, but I would guess if no one is listening, use the media to get your point across and save others from this fate!
posted by getmetoSF at 6:28 PM on March 30, 2009
posted by getmetoSF at 6:28 PM on March 30, 2009
People have rightly pointed out that the answer to your first question, "am I free and clear of this mess," depends on legal advice and you should get yourself some.
You also asked if you have a moral responsibility to go to the police. This is a good question, and not one that a lawyer will (or even should) answer for you. So, be sure you have an answer in your own mind before you go in, and consider it carefully along with his/her advice. While it may be trite to say, I think that as a good citizen, you do have a responsibility here: you are aware of (potentially) criminal activity that is still in progress, and you have the ability to prevent future harm to your fellow citizens. In addition, the OSC may not as vigorously pursue an anonymous complaint as one made on the record.
Of course it is not that simple, and you do put forward some potentially legitimate self-interested grounds for keeping silent. So here is a self-interested reason to go to the authorities now, and not anonymously: the owner of these companies seems like a skilled con artist, and if the weight ever does come down on him, he will surely try to shift the blame. At that point you, "the finance department," could be made to seem complicit, and your only defense - if you weren't part of it yet you didn't report it - would be a rather hollow claim of ignorance (and this askme thread as meagre evidence of your attempt to do the right thing).
Lawyer up, and then Mountie up.
posted by Urban Hermit at 6:38 PM on March 30, 2009
You also asked if you have a moral responsibility to go to the police. This is a good question, and not one that a lawyer will (or even should) answer for you. So, be sure you have an answer in your own mind before you go in, and consider it carefully along with his/her advice. While it may be trite to say, I think that as a good citizen, you do have a responsibility here: you are aware of (potentially) criminal activity that is still in progress, and you have the ability to prevent future harm to your fellow citizens. In addition, the OSC may not as vigorously pursue an anonymous complaint as one made on the record.
Of course it is not that simple, and you do put forward some potentially legitimate self-interested grounds for keeping silent. So here is a self-interested reason to go to the authorities now, and not anonymously: the owner of these companies seems like a skilled con artist, and if the weight ever does come down on him, he will surely try to shift the blame. At that point you, "the finance department," could be made to seem complicit, and your only defense - if you weren't part of it yet you didn't report it - would be a rather hollow claim of ignorance (and this askme thread as meagre evidence of your attempt to do the right thing).
Lawyer up, and then Mountie up.
posted by Urban Hermit at 6:38 PM on March 30, 2009
It sounds like you have already tried to report this without exposing yourself, but feel like things have not progressed along that path. Maybe WikiLeaks would be a path of next resort? But be careful about what you post/share there, as posting things only you were privy too would rather defeat the entire purpose.
Else, certainly find a lawyer. Maybe even spend the 30 free minutes talking about whistle-blower protection in your area.
posted by paisley henosis at 9:37 PM on March 30, 2009
Else, certainly find a lawyer. Maybe even spend the 30 free minutes talking about whistle-blower protection in your area.
posted by paisley henosis at 9:37 PM on March 30, 2009
Canada tends to have fairly decent whistleblower protection, paisley.
And yes, jesus, LAWYER NOW. The LSUC is very helpful, helped me a year or so ago with something (civil, not criminal, me as litigant, for those suddenly thinking I have a darker life than I actually do ;) that ultimately went nowhere. But they were very good at matching me with a lawyer who specialised in what I needed at a price I could afford.
posted by dirtynumbangelboy at 10:04 PM on March 30, 2009
And yes, jesus, LAWYER NOW. The LSUC is very helpful, helped me a year or so ago with something (civil, not criminal, me as litigant, for those suddenly thinking I have a darker life than I actually do ;) that ultimately went nowhere. But they were very good at matching me with a lawyer who specialised in what I needed at a price I could afford.
posted by dirtynumbangelboy at 10:04 PM on March 30, 2009
This thread is closed to new comments.
The Law Society of Upper Canada recommends that lawyers give a free half-hour initial consultation and almost all lawyers in Ontario do.
If you can't find a lawyer via personal recommendations, the Law Society has a referral hotline, it's a $6 call to a 900-number and they will refer you to someone who will give you a free consultation.
posted by winston at 4:05 PM on March 30, 2009