Thursday, May 01, 2008

Ponzi schemes: Brenda Martin released from Mexican prison

I've been following the Brenda Martin case since I first saw her pleading with the Canadian government to help her after she'd been held for over two years at the Puente Grande women's prison near Guadalajara, Mexico. She was arrested on allegations of money laundering and participating in a criminal conspiracy (a high yield investment plan) that defrauded over 15,000 investors out of approx. $60,000,000. Today, she was back in Canada and has been remanded to the Grand Valley Institution for Women in Kitchener, ON.

At first, when I didn't fully understand what she'd gotten involved in, I was one of the people who said, "Hey, if you do the crime, you do the time." I originally thought, "What could you expect? Serves you right for breaking the law." But I don't think that way now.

Why? Because ANYONE could have invested in Waage's investment club thinking it was a great investment. If someone told you they'd give you a 60% return after 60 days and that you could invest as low as say $100.00, you'd be tempted, wouldn't you? The problem is, these plans DO work. For a short period of time.

According to Martin, she was given a severance pay of about $25,000 for her position as personal chef after her boss, former Edmonton resident Alyn Waage, fired her. Martin then took $10,000 of her severance pay and "invested" it in Waage's company Tri-West Investment Club, saying she didn't know it was a fraudulent company and that she was under the impression it was a good investment. She was quite simply an "investor".

This is a strange case but what seems clear to me now is that Martin's former boss concocted a fraudulent internet investment scheme, the kind that is commonly referred to as a Ponzi scheme, and Martin was duped into believing that it was a legal investment. She is not the first person to be duped. I think it's important for people to keep in mind that she was convicted of investing in a scam, and I bet that most people know someone who has been tempted by Ponzi schemes at least once in their lifetime, and some of us know people who are "investing" in them right now.

Ponzi schemes are everywhere, and they lure unsuspecting people in by promising huge returns, like 60%, on your small investment. Ponzi schemes work because people are lured into a false sense of security. They're told that they don't have to invest much, maybe $100.00 minimum. They're convinced that it's all on the up-and-up by a smooth-talking company representative who not only tells them he's investing in "offshore investments" or some such BS, but also that he genuinely wants to help people so he's allowing them to "piggyback" on his own investments.

As my husband is always quick to point out, "If it sounds too good to be true, it probably is." And it is. Unfortunately, I know people who have fallen for this scam. But if Martin's case sets a precedent, then that would suggest that ANYONE who invests in a Ponzi scheme, knowingly or unknowingly, could then be charged for participating in a criminal conspiracy. THAT scares me!

Why? Because someone close to me has been investing in a Ponzi scheme and even though I have tried to convince this person that their involvement isn't safe (financially, morally or legally), they would rather trust someone else, including the man behind the scheme, rather than me. So in the past month I have been doing my own investigation into the company and others like it.

I'll reveal more about Ponzi schemes in my next post. For now, I just want to say that I think Brenda Martin has done her time and I would hate to see someone who was duped into investing in a Ponzi scheme spend anymore time in prison. There are far worse criminals out there that should be behind bars.

~Cheryl Kaye Tardif is a freelance journalist and bestselling suspense author of Whale Song, The River and Divine Intervention. She currently resides in Edmonton, Alberta, Canada.

2 comments:

Powell lucas said...

The fact that Ms. Martin spent ten years living illegally in Mexico where she worked without paying taxes, is not the sort of thing that leads me to believe that she was some innocent dupe caught up in her boss's ponzzi scam. I don't know of too many cooks who were fired then given $27,000 in severence pay. I also don't know of too many people who get fired and then turn around and invest $10,000 with the person who fired them. Ms. Martin broke the law by residing in Mexico as an illegal alien for ten years, she broke the law by working during that time and defrauding the Mexican government of the taxes on those earnings, and she has been found guilty of criminal activities by the Mexican judicial system. If her soon to be published, ghost-written fantasy novel relating her 'ordeal' does not sell well, I expect we will all hear about Brenda Martin again sooner than we wish.

Cheryl Kaye Tardif... said...

You do have some points here, I'll grant you that.

As for being found guilty by the Mexican "judicial system", everything I've read about that points to it being a farce. Her basic human rights were violated. She never stood trial, was never able to present her defence and has no idea of any evidence presented that proved her guilt. She was just imprisoned in Mexico and then released only when the Canadian government and the world finally took a peek at what was happening.

I'm torn on this one...