'Some of the toughest cases': Investment fraud running rampant across Canada

Investment scams are nothing new, but over the past few years, they have exploded across Canada.

According to data from the Canadian Anti-Fraud Centre (CAFC), the amount of money reported lost to investment scams has multiplied by nearly 20 times from 2019 to 2023.

"Unfortunately, investment scams have been one of the main factors in the sharp increase in reported money loss to the CAFC in the last few years,” said Jeff Horncastle, a CAFC spokesperson in an email to CTV News.

"The CAFC estimates that over 50 per cent of investment fraud reports and money loss are associated to fraudulent crypto investment platforms."

The CAFC says they received 489 reports of investment fraud from 388 Canadian victims, totalling more than $15.7 million in 2019.

In 2023, the centre received 4,010 reports from 3,631 victims for a total of $309.3 million.

"Typical investment frauds offer get rich quick opportunities and higher than normal returns. These frauds often result in investors losing most, or all, of their money," said Horncastle.

“The majority of the investment scam reports involve Canadians investing in cryptocurrency after seeing a deceptive advertisement online.”

Statistics specifically for Ontario paint a similar picture in terms of the growing issue of investment scams. In 2019 the CAFC received 145 reports from 124 victims totalling a little more than $4.5 million

Four years later, that annual total has swelled to 1,341 reports with nearly $111.3 million in losses.

"Ontarians are giving money away at an alarming rate and its large sums," said Det. Shaun Wahbeh with the Ottawa Police Services (OPS) Organized Fraud Section.

According to OPS, an average of one or two cases of investment fraud are reported in the capital every single day.

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"These are people that are reporting. Frauds tend to go unreported because of embarrassment, shame or people just want to forget about it," said Wahbeh.

"They average from $50,000 to the highest, which is $4 million."

For those who have fallen victim of investment scams, the situation can be devastating.

Victoria Lloyd and her husband Doug were recently robbed of more than $177,000 through a line of credit in a cryptocurrency scam.

"It’s just horrible. You can’t even sleep at night. I’ve been having a hard time sleeping for the last couple of months now," said Victoria Lloyd.

"It’s just not fair that we worked for all of our lives. I worked for almost 40 years in the government and now all of our money is going to pay the interest on this line of credit that somebody else took."

A cryptocurrency scam left Doug Lloyd and his wife Victoria out more than $177,000. (Austin Lee/CTV News Ottawa)The Lloyd’s have filed a police report, but they aren’t overly hopeful that they will recoup that money.

OPS says investment fraud cases, specifically those involving cryptocurrency, are incredibly difficult cases to crack.

"As law enforcement, we’re able to trace it if it’s within a short window because it’s virtual money so it jumps from wallet, to wallet, to wallet," said Wahbeh.

“These are some of the toughest cases because the money rarely stays in our jurisdiction."

Wahbeh adds that the money often ends up overseas. He says countries like Russia and Nigeria are two of the primary landing spots for these types of scams.

"There are certain countries that don’t play well with Canada, and there are certain countries that don’t have any laws at all when it comes to currency or cybercrime, so it falls into the cracks."

The CAFC says common methods of solicitation used by fraudsters include:

• Search engine optimization
• Compromised social media accounts
• Ads on the internet and social media
• Emails or text messages
• Direct phone calls from fraudulent crypto investment companies

The CAFC has provided a list of warning signs and tips on how to protect yourself from investment fraud:

• Be careful when sending cryptocurrency. Once the transaction is completed, it is unlikely to be reversed.
• Be wary of individuals met on dating sites or social media who attempt to educate and convince you to invest in cryptocurrency.
• Canadians need do their research to ensure they are using reputable and compliant services.
• Proceeds of crime and anti-money laundering regimes around the world create regulatory frameworks that treat businesses dealing in cryptocurrencies as money service businesses
• Prior to investing, ask for information on the investment. Research the team behind the offering and analyze the feasibility of the project
• Some fraudsters will use the name of legitimate companies to lend credibility to the fraud and convince victims to send money. Verify email addresses, URL’s, phone numbers and their physical address.
• Verify if the investment companies are registered with your provincial securities regulator or the National Registration Search Tool.
• If you receive a suspicious or odd investment related message from a trusted friend, reach out to them through a different means of communication to confirm that it is them.
• Beware of fraudsters asking you to open and fund new crypto accounts, they will direct you to send it to wallets they control - Don’t!
• Question why someone is reaching out to you about an investment offer: Is this a conversation I would usually have with an unknown person? Does it make sense to invest in an opportunity based on the communication I had? Should I feel pressure or urgency when deciding to invest?