The Royal Canadian Mounted Police have charged five former executives of Seaquest Corporation and its related companies with Criminal Code and Bankruptcy and Insolvency offences.
The RCMP alleges that Seaquest initiated bankruptcy proceedings in order to obtain creditor protection from their investors in November 2011. It adds Seaquest claimed they were unable to pay their creditors after amassing a debt of $75 million owed to approximately 70 creditors.
The RCMP also alleges SEAQUEST collected $92 million dollars from investors with the promise rates of returns up to 36%. However, it is also alleged the money was not invested but instead put into a Ponzi scheme.
As a result of the RCMP’s investigation, five former executives have been charged under the Criminal Code with Fraud Over $5,000, Money Laundering, and Commission of offence for Criminal Organization.
Two of those have also been charged with three Bankruptcy and Insolvency Act charges.
“It’s important for the public to know before investing in any financial venture, they should do their due diligence,” says Inspector Gairy of the RCMP GTA Financial Crime Section.
The RCMP, the Office of the Superintendent of Bankruptcy Canada and, in particular, the OSB’s Special Investigation Units will continue to combine their efforts to investigate allegations of criminal wrongdoing related to bankruptcy and insolvency matters in order to protect the integrity of the insolvency system in Canada.