Even investors who never knew it was a fraud are on the hook
Investors who pocketed more than they put into a British Columbia Ponzi scheme must return their gains, the province's Supreme Court has ruled.
The Supreme Court of British Columbia on July 3, 2026 granted a trustee's request to void payments made to so-called net winners, investors who withdrew more than their original stake before the scheme collapsed.
The ruling grows out of a fraud that ran from 2008 to 2020. The court found that the scheme's operator solicited money on the promise of pooling funds to buy and resell real estate in and around Edmonton, backing the deals with promissory notes offering interest as high as 18 percent. No such investments existed. Money from new investors went to pay earlier ones and to cover his living costs.
Over roughly 12 years, he issued about 2,508 promissory notes across 518 transactions, moving just over $174 million through 11 financial institutions. When the scheme collapsed, 84 investors had lost more than $8.3 million in principal. Many told the trustee the money was their life savings or retirement.
The operator was declared bankrupt on June 1, 2020, and Campbell Saunders Ltd. was appointed trustee. Investors filed claims totalling almost $26 million, but the trustee recovered only about $528,000 from a boat, a motorcycle and his share of a Kelowna home.
Edmonton police had charged the operator and his common-law partner with fraud and laundering proceeds of crime. The trial was set for 2025, but he drowned in the Okanagan River in June 2024, and the charges were stayed.
Unable to recover much from the estate, the trustee turned to the investors who came out ahead. It asked the court to declare the excess payments, the amounts received above each person's principal, void as fraudulent conveyances, unjust enrichment, and money had and received. Justice Fitzpatrick agreed, finding those payments void and repayable to the estate.
None of the net winners disputed that a Ponzi scheme had operated, and the court noted there was no suggestion they knew about the fraud or took part in it. That did not shield their profits. The judge ordered a summary clawback process to settle the amounts owed, rather than separate lawsuits that could drain the estate.
The trustee has already settled with 28 net winners for about $1.44 million. Twelve remain, with roughly $2.5 million still sought. Claims against them range from about $42,000 to more than $789,000.
For advisors, the case is a reminder that returns which look too steady to be real can carry a hidden liability. Investors who take money out of a fraud, even in good faith, can be ordered to give it back long after the operator is gone.
