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Accused Ponzi scheme mastermind may have fallen for overseas scam

CALGARY — One of the Alberta men accused of masterminding Canada’s largest Ponzi scheme may himself have been the victim of a different type of swindle: the infamous Nigerian money scam.

Milowe Brost, 55, has been charged with theft and fraud in relation to a purported investment hoax that police claim lured thousands of investors with promises of big returns.

But a former senior member of Brost’s Calgary staff told investigators this year that his old boss was “sucked” out of millions of dollars by chasing bogus overseas investments.

A few years ago, “Milowe starts spending money on this Nigerian bull—-,” Bradley D. Regier told Mounties in January, according to transcripts of the RCMP interview obtained by the Calgary Herald.

“I’m sorry but there’s no other word to describe it.

“They have sucked so much money from this man.”

It’s unclear from Regier’s interview, however, whose money would have funded the pursuit of the Nigerian scheme. The Nigerian connection never became a major part of the RCMP probe and the force did not confirm it. Still, investigators believed it to be true, according to a police source.

They also believed it was investors’ money that was used to chase the Nigerian prospects.

“At the end of the day, that was their only source of income, so it couldn’t have been derived from anything else,” said the source.

The revelations come as Brost’s legal battle against theft and fraud charges begins Monday in a Calgary court. His co-accused, Gary Sorenson, faces similar charges.

However, it’s unlikely either man will attend court Monday as their legal teams are expected to deal with early administrative matters.

“I would expect that neither of the accused persons would be present,” said Don MacLeod, Sorenson’s lawyer. “It’s a very routine matter.”

Authorities contend the two men orchestrated the largest Ponzi-type scheme in Canadian history, raising up to $400 million from North American investors.

The suggestion Brost might have been scammed himself came up in the course of the Mounties’ probe into the alleged investment hoax.

Though Regier’s interview doesn’t outline the deals offered to Brost, it’s believed variations on the Nigerian “black money” scheme were used.

Generally, such scams try to convince the victim to send cash overseas to help secure part of a greater fortune.

In some cases, the target is a fictional treasure of foreign currency dyed black to avoid detection by authorities.

The victim is first asked for money to help get the parcel from customs officials or someone else. Further reasons then emerge as to why additional funds are required to secure the elusive bundle.

The victim may even be asked to buy pricey cleaning materials to wash the black dye from the cash. Ultimately, however, there is no fortune.

Variations on the scam entice victims with gems, gold or other precious metals.

During Regier’s examination, the RCMP investigators call it a “good scam.”

Yet, Brost seemed to still be hoping for a windfall earlier this year.

“I’m led to believe right now that people are still giving money on some sort of a personal loan basis, and he . . . still thinks he’s going to land this package tomorrow,” Regier told police.

Contacted by the Calgary Herald, Regier declined to comment.

Regier, who joined Brost’s Institute for Financial Learning in 2003 to do the day-to-day accounting, estimated that his former boss sank as much as $10 million into Nigerian schemes.

At one meeting, Sorenson looks at Brost and “cuts him a new (one), he chews him out,” recalled Regier, apparently taking Brost to task over the “Nigerian stuff” and demanding that he stop.

Calgary Herald with files from Kelly Cryderman

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October 19, 2009 - Posted by | Uncategorized

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