Suarez took millions from investors and left them with nothing
Gold, diamonds and psychic guidance. How an Ontario man took millions from investors and left them with nothing
For business people from the ranks of the rich and powerful, a lawyer or investment adviser is an invaluable resource.
But when Brad Suarez started running a “prophesy investment” operation in suburban Toronto in 2003, he came up with some unconventional ideas about his own role.
Suarez, now 59, is serving 12 years in prison after admitting his scheme, which preyed on unsuspecting investors and left them $55m (£44m) out of pocket, for decades as a master forger of precious metals and jewellery, a forced labourer, and as a blind woman.
Suarez said he indulged in various bizarre schemes “to give some semblance of a normal life” while also maxing out credit cards, earning compensation through a gamut of illegitimate work, and collecting $2.7m in unearned wages, according to an agreed statement of facts.
In his fraud, he was able to attract interested investors by promoting the importance of advanced mystical gifts and practices called “mathematical manoeuvres” that purportedly allowed the transfer of information about future events, such as whether gold or diamonds would rise in value.
He told potential clients to hold his numerous “paramount” gifts of precious metals and metals in such large quantities that he would be unable to buy or sell them – then allegedly let them know if these goods would rise in value.
“By allowing me to pick you and your companions, I would always be able to take your lives,” one client was told by Suarez. “By telling you to trust me, as a [personal medium], I would always be able to provide those ‘reminders’ you would always need, allowing me to have both a personal and an economic right.”
In reality, the fortune teller never received the personal information mentioned by the client. Suarez would allow a few of his victims to have access to some of the goods he claimed to possess, but then return all that they were given.
It worked for a while: investors gave him $50,000 in cash, for example, and he then told them he could increase the value of their gold by 100%.
The average amount he persuaded his clients to invest in each of these schemes was about $200,000.
Authorities acting on complaints from 13 former clients of Suarez, from Ontario and Florida, came to believe he was running a “ponzi” fraud scheme, in which early investors are paid with the proceeds of the next round of payments from other investors who lend him the cash.
They also believe the value of the precious metals, which were recycled many times over the years, was exaggerated and that there was no actual knowledge of future price movements.
The ponzi scheme unraveled after the US Internal Revenue Service issued him a criminal bill for $15.7m for back taxes due on the proceeds of his ponzi scheme.
In October 2013, the bankruptcy court for Ontario first stopped a bankruptcy proceeding that Suarez was planning, and in August 2014, a Florida court froze $8m of his bank accounts. In 2015, he was charged with 58 counts of fraud.
“Suarez abused his clients’ trust and the trust of the court by coming forward,” Thomas Patton, the federal prosecutor in the case, said in a statement. “I expect his sentence will give him a strong deterrent message.”
The two most common ways that criminals use the ponzi scheme:
1. It provides a mechanism for spreading investment risk widely in order to benefit a large group of investors from a limited pool of legitimate money.
2. It is used as a means of luring more investors into the investment scheme.