They did their due diligence and looked into the business opportunity before investing. He in Nigeria and she in Waterloo, Ont.
Both found nothing — no red flags, no bad history, no indication of what actually lay ahead.
In the end, the two investors lost thousands of dollars in what they later learned was one of Ontario’s largest frauds of the day.
In all, approximately 500 people lost millions of dollars, some their whole life savings. From 2012 to 2017, police believe the Barrie fraud artist took in $56 million, with the investors losing about $29 million combined.
Charles DeBono, a diminutive 63-year-old who parked a pile of the stolen cash in the Dominican Republic, out of reach of Canadian officials, before his arrest, is on his way to a penitentiary after being handed a seven-year sentence on Tuesday.
His term was reduced to four years, three months and 19 days after he received credit for pre-trial custody and once he’s done, he’ll have to somehow repay $26.9 million to the victims within five years under threat of serving another seven-year term if he does not.
DeBono's guilty plea to fraud over $5,000 and laundering money saved the court enormous resources and much-valued time by not having to run the two-month trial, the lawyers and judge acknowledged in the handful of court appearances culminating in Tuesday’s sentencing.
And the order to pay back the money was cemented by a fine tied to the restitution that will lead to another seven-year sentence if he defaults.
“The fine gives it teeth,” his lawyer David Goodman told BarrieToday. “He’ll have to do everything he can to work on it.”
During his sentencing hearing in April, DeBono told the court he was very remorseful and “sorry for what I’ve put the victims through.”
DeBono, who takes insulin twice daily for diabetes, is bipolar and a prostate cancer survivor, also said he’d try to pay back the money.
DeBono created KIS Media Ventures in 2012, which served as an umbrella organization for illicit companies, including Debit Direct, a point-of-sale terminal ownership program. An elaborate program was established and marketed at franchise shows through sales agents, allowing investors to earn profits every time one of their debit machines was used.
And it all looked legit. There were contracts, a website and sales agents who peddled the deal at franchise shows across the country. There were even monthly reports as well as monthly payments.
THE CANADIAN INVESTOR
It was around 2015 when a Waterloo teacher decided to invest. Her mom in Orillia had purchased point-of-sale terminals the previous year which were to pay her 15 cents per transaction, resulting in monthly cheques.
“She even called the OPP before she invested to find out if there were any cause for concern, any reports that had been made,” the teacher recalled. “She went to the Better Business Bureau. They basically said, ‘No, we haven’t heard anything about this. You should be fine'.”
The teacher dropped $21,357 in a series of machines. She was promised $900 to $1,200 in monthly returns. But the first payment was late. The payments that did come never reached close to the minimum so she complained. Continually.
“I was never getting what I was promised and I’m not one to just lay down and take it,” she said. “So every single month I have email exchanges with him that I shared with the police.”
That first payment was $460. And even though she had to fight for them, the teacher did enjoy the payments. So in the summer of 2017, she considered investing another $30,000.
The teacher put in a call to the sales agent DeBono had hired, but she didn’t get a call or email back. And then in September the payments stopped and all signs of Debit Direct had evaporated.
“My mom was absolutely frantic. She said, ‘They’re gone. They’re gone'.”
The teacher did manage to finally reach the sales agent who told her it all turned out to be one big scam. And he, too, was one of the victims.
At the end of the day, the teacher’s net loss was only $3,962. She figures that’s because she bought in early and she pushed when she didn’t get paid.
Her mother had invested $95,000 and her net loss was under $10,000.
When everything unravelled late in the summer of 2017 and early that fall, investors realized they had been duped. Debit Direct’s website was down, the phone line dead.
Debit Direct, it turned out, was one really big Ponzi scheme. Money from new investors went toward paying older investors, who often then reinvested their money in the scheme.
Nine police agencies across the country, including those in Barrie, Toronto and Calgary, soon fielded complaints, with the Barrie Police Service taking the lead on the investigation. But the scope of the fraud was overwhelming.
Meanwhile, a new provincewide police unit focusing on financial crime had just been established and it took over the investigation into Debit Direct and its principal — DeBono.
Led by the OPP serious fraud office, the unit included officers from various forces, including Barrie police. It took on Project Debit Direct as its first case.
Investigators tapped into records filed with the Financial Transactions and Reports Analysis Centre of Canada. Transactions of $10,000 or more in Canada are reported to the financial intelligence agency.
Through RCMP officers based in the Dominican Republic, the Ontario financial crime unit connected with the Dominican National Police, its money laundering investigative division and the country’s special prosecutions office as well as Interpol.
A forensic accountant was then hired to track the various money trails to determine exactly how much money was involved and who was owed what.
When DeBono was arrested in September 2020, he had fake identification for the Dominican Republic and Guatemala.
In raids across the Dominican Republic, their national police seized $78,000 (Cdn.), property titles, firearms, and four high-end vehicles. DeBono’s wife and another man were also arrested by Dominican officials around that time.
Canada has no treaty allowing for formal seizure of assets in the Dominican Republic and many of DeBono's properties have mingled ownerships. So police here can’t use those assets to compensate DeBono’s victims.
But Ontario Superior Court Justice Michelle Fuerst suggested during sentencing Tuesday that DeBono might be able to access those assets when he sets his sights on paying back the victims the money he swindled from them.
THE NIGERIAN INVESTOR
An investor from Nigeria figures he lost $80,000 (US) — money he had earned investing in the petroleum sector. But he considers himself lucky. He really wanted to double his investment, but says his bankers discouraged him from putting any more money into Debit Direct. They believed it wasn’t a sustainable investment.
“I checked everything. In fact, it took me one year before deciding,” he told BarrieToday at the Barrie courthouse, after having decided to witness justice unfold here. “I was asking people, checking.”
Even the online reviews, he recalled, were very good.
“For me, I didn’t expect this type of thing to happen in Canada. It’s a developed country.”
Other colleagues in Nigeria had also invested. He figures there were about 10 investors from that country.
The Nigerian man believes that some of the early investors recovered their money in full — which would explain the positive online reviews that, at the time, encouraged others to throw their money DeBono’s way.
“For me, any investments that is looking vague, everybody should stay away from it,” he said. “It’s now that I realize it was a Ponzi scheme. I’ve never seen the POS (point-of-sale machines). Go and actually see what you’re actually going to invest in.”
The impact on the victims, says Patrick Travers, one of two Crown counsels on the case attached to the serious fraud office, were significant. Court heard through victim impact statements that there was marital strife, devastated families, lost life savings, and a lot of guilt for those who introduced the scheme to friends and family.
Police managed to recover about $2.1 million in assets in Canada, reducing the $29 million in losses to the $26.9 million that DeBono was ordered to pay back.
Meanwhile, there’s negotiations underway with officials in the Dominican Republic in hopes that some of the assets, primarily real estate, can be accessed to further compensate the victims.
“The difficulty is a lot of that property is in the names of other people or corporations and we’re dealing with a foreign country. So there’s efforts underway, but it’s really hard to say how much of that can be seized and returned to Canada,” Travers told BarrieToday. “And also, Mr. DeBono had associates that were charged down there as well.
“We’ve learned that the Dominican authorities have used their own laws to freeze quite a lot of that, in terms of the apartments and condominiums and the homes. So the question is, what happens next?”