Portus founders charged with fraud

By Bryan Borzykowski | September 26, 2007 | Last updated on September 26, 2007
2 min read

After a 27-month investigation, charges have finally been laid against the co-founders of Portus Alternative Asset Management, Boaz Manor and Michael Mendelson.

Each has been charged with 12 counts of fraud over $5,000, money laundering and possession of property obtained by crime. Manor has been charged with one extra count of fraud of $5,000, two further counts of money laundering and one count of obstructing justice.

Manor and Mendelson are accused of allegedly defrauding 26,000 mainly Canadian investors of about $750 million between January 2003 and March 2005. It’s alleged that the duo used the money to operate its business in contrast with its disclosure and without investor knowledge.

The RCMP says some of these funds went to performance, referral, management and trailer fees and salaries.

Manor is also accused of defrauding about 700 foreign investors who gave the Portus about $52 million in American money. The police allege that Manor failed to invest the U.S. funds with the Portus Group of Companies.

Dave Truax, director of the Ontario Provincial Police’s anti-rackets section says a fraud this large could have serious repercussions on the financial world’s reputation.

“Any fraud related to investments and the investment industry has a broad impact,” he says. “It affects public and private investors and creates a negative perception of the investment industry. Equally important is its impact on our communities. It has a detrimental effect on economic integrity and shakes investor confidence, with frauds causing jobs to be lost and businesses to be shut down. Sometimes, it even wipes out entire life savings.”

While Mendelson is scheduled to appear at Old City Hall Court in Toronto on September 26th, Manor is rumoured to be in Israel, where the Israeli government won’t extradite him. It’s still waiting to find out what Manor did with $11 million worth of diamonds he allegedly purchased with Portus funds.

The RCMP has issued a warrant for Manor’s arrest, but the police spokesperson says she can’t comment on where he is, or if Israeli police are authorized to arrest him.

Filed by Bryan Borzykowski, Advisor.ca, bryan.borzykowski@advisor.rogers.com


Bryan Borzykowski