Manitobans lose more than $700K from investment fraud, securities commission finds

More than 60Manitobans were victims of investment fraud recently, as the number of fraudulent investment websitescontinues to grow, the Manitoba Securities Commission (MSC) said.

"Their lives are forever altered," said Jason Roy, a senior investigator with the MSC.

An ongoing cryptocurrency investigation by the MSC, a division of the Manitoba Financial Services Agency (MFSA), found that the victims were scammed by 34 different fraudulent investment websites, all of which promote cryptocurrency or Forex (foreign exchange market) trading, according to an MFSA news release on Wednesday.

About 62 Manitobans lost a total of $710,000, with victims losing anywhere between $320 and $206,000, according to the statement.

"The individuals that are running these scams have become more sophisticated," Roy said in a phone interview. They are"designed in order to trick you."

Roy said the number of online fraudulent investment sites has been dramatically increasing over the last few years.

In 2022, investment fraud caused the highest levels of reported fraud victim losses, especially cryptocurrency fraud, according to the RCMP.

"There is certainly legitimate cryptocurrency opportunities out there, but there arefar more fraudulent cryptocurrency scamsters and websites popping up all the time," Ainsley Cunningham, a spokesperson for MSC, said in a phone interview.

The scammers, who operate offshore but say they have offices in Canada,targeted their victims on social media, usually through fake news articles or fake celebrity endorsements.

They then got victims to invest a small amount of money around $350, Cunningham said and would show themfake profits, enticing them to invest more. Scammersalso ask victims to convert their money to cryptocurrency, making the funds nearly impossible to recover.

"They really like to get people hooked in," Cunningham said. "You'll sort of think, 'Wow, I'm making a lot of money here.'"

If victims try to withdraw their supposed profit, scammers will ignore or block them, or they might tell victims to invest more in order to make withdrawals.

"Once it's gone, it's gone," Roy said.

Anger, embarrassment, frustration

Cunningham said it's heartbreaking to tell people they are victims of fraud.

"It's so hard to hear the stories. They're very emotional conversations," she said.

The victims ranged in age between early-20s to late-60s. Some lost money intended for their children or retirement savings, she said.

"There's anger, there's embarrassment, frustration. Some people, there's a little bit of hope, thinking, 'Well, maybe I still can get my money back.'"

Cunningham said she tells those who invested a small amountto look at it as an "expensive education."

For others, the consequences are more serious and might even include having to return to work.

"It cost them a lot," she said. "It's painful to hear how it's affecting their family life, their relationships."

Cunningham said there's thousands of fraudulent websitesto watch out for.

"While we're aware of these 34, we know that there's many, many more websites out there," she said.

Many sites will scam as many people as possible, shut down once theyget caught, and then will pop up again under another site or company, Cunningham said.

WATCH | MSC's Jason Roy describes some scams

Cryptocurrency scams target Manitobans

3 years ago

Duration 2:24

The Manitoba Securities Commission is warning the public not to be fooled by scam artists who are working abroad in boiler rooms dedicated to frauding Manitobans. The commission says some victims have lost as much as $600,000.

Thereare a few ways tomake sure an investment company is legitimate,Cunningham and Roy said.

People can visit aretheyregistered.ca, search the name of the company or individual in question, and find out whether the person or company is registered to do business in Manitoba or Canada.

Manitobans can also call MSC's anti-fraud line to ask questions about a possible fraud or to report one.

"It's important to recognize it, and it's also important to report it," Roy said.

"If we don't know about it, you know, there's nothing we can do. We can't get the message out."