A Barrie man has pleaded guilty to using a local mechanic’s shop as a base to defraud investors of millions of dollars which he then used to buy luxury cars and property in Canada and the Dominican Republic.
Forensic accountants figured Canadians and investors from elsewhere lost somewhere between $23 million to $41 million, likely closer to the higher end.
When Charles DeBono, 62, was arrested in the Dominican Republic during the height of the pandemic in September 2020, he had fake identification for the Dominican Republic and Guatemala, had real estate and luxury cars and had built a resort in the Dominican Republic, a Barrie court heard on Thursday.
During a virtual hearing from Central North Correctional Centre in Penetanguishene, DeBono pleaded guilty to fraud over $5,000 dating back to 2012 and laundering money.
Court heard the Barrie man had regular middle-class jobs, including in the local used car industry, before creating Kis Media Ventures in 2012, which served as an umbrella organization for illicit companies, including Debit Direct, a point-of-sale terminal ownership program.
Reading from the agreed statement of facts, Crown prosecutor Ted Ofiara said there was no evidence that any machines were ever placed in businesses and hundreds of investors from across the country and elsewhere lost their money.
“It was nothing but a Ponzi scheme,” he said, referring to a scam in which perpetrators use money from new investors to pay off earlier ones. “No point-of-sale terminals ever existed.”
The scheme was peddled at trade and franchise shows across the country and websites to attract investors for the point-of-sale terminals to be placed in high-volume businesses across Canada. The investors were to receive 15 cents per transaction in monthly payouts.
In total, 515 people, mostly in Canada but also in Nigeria, bought in to the tune of $40 million to $48 million between 2012 and 2017.
There are Facebook and web pages dedicated to complaints from investors and Ontario Provincial Police posted a six-minute video about its work on the case and the subsequent arrest.
Ofiara told the court the business used virtual office space at First Canadian Place in Toronto, but that its base was actually an office at a Barrie car repair shop which DeBono owned and was managed by his neighbour, a mechanic. Any mail sent to Toronto was forwarded to a post office box in Barrie.
A woman employed as an administrative assistant essentially handled the bulk of the daily business of Debit Direct at DeBono’s direction. During the investigation, she provided police with a drive copying the details of the business activity.
In 2014, a salesman was hired to sell the terminals. Court heard that he believed the business to be legitimate and he himself bought in and encouraged family members to be involved.
A woman was hired to mine data on small businesses which were then assigned to debit machine identification numbers. The lists were then sent to investors to suggest that the terminals were generating income.
Beginning in 2014, the mechanic noticed DeBono’s obvious display of wealth even though the car business, which DeBono supported, was not profitable, court heard. The following year, the mechanic spotted more than $1 million in one of DeBono’s accounts.
DeBono also had several unsuccessful businesses in the Barrie area, including a car care company and a whisky bar.
Court heard that DeBono had also taken on a friend’s identity and used his name when meeting people and in communication with investors.
Ofiara pointed to a Thornhill couple duped into buying in after going to a Toronto franchise show as an example. They made three separate investments totalling $128,250. That investment returned $41,368 in revenue, which then stopped in July 2017.
Their total loss was $86,886.
Over time, the banks DeBono used became suspicious and eventually shut down his accounts.
In September 2017, payments to investors stopped. That same year in August, DeBono fled to the Dominican Republic with his wife of three years, who hailed from the Caribbean country.
At that time, he told investors via email that Debit Direct was being purchased by a Brazilian company, but when later approached by investors, said they had no relationship with Debit Direct.
Ofiara said bank drafts and money wires totalling $3 million (US) were transferred to the Dominican Republic from November 2016 to February 2017. From 2014 to 2018, DeBono dispersed $12.2 million to the Dominican Republic, Ofiara added.
The money was placed in various accounts there and used to buy homes in cities in the Dominican Republic as well as more than a dozen condominium apartments largely held in the names of others. He also put $200,000 deposits on each of two townhomes in Richmond Hill.
Assets restrained by officials included $1.8 million (Cdn.) and $300,000 (US) located in bank accounts, the townhomes deposits, bank drafts as well as assets from a real estate sale.
DeBono, who has served 521 days of pre-trial custody, is expected to return to court for a sentencing hearing at the end of March.
