A self-proclaimed “Crypto King” has been arrested and charged with fraud and money laundering, police said Thursday, warning that they believe he tried to solicit new investors as recently as February.
Aiden Pleterski, 25, of Whitby, Ont., was charged with fraud over $5,000 and laundering the proceeds of crime, following an 18-month investigation, Durham Regional Police said.
They said it was the largest fraud investigation ever in the region and that they are concerned there may be more victims.
“It’s alleged that Pleterski solicited funds from investors promising massive profits and also guaranteeing no loss from the original money put out by investors,” Chief Peter Moreira said at a press conference in Whitby. “These investors became concerned when they were unable to access money held by Pleterski, and came forward to police.”
During that time, Mr. Pleterski also used other people to act on his behalf, Chief Moreira said. In this week’s announcement, Colin Murphy, 27, who police described as an associate, was also charged with fraud.
The arrests come after Mr. Pleterski was forced into bankruptcy in 2022, after spending millions of investor dollars that he promised to invest through his company, AP Private Equity Ltd. According to bankruptcy filings, he had collected about $41.5-million from investors, promising to invest in crypto funds. But he invested less than 2 per cent of that amount. The filings also said he spent millions on his personal lifestyle, including luxury vehicles such as McLarens, BMWs and a Lamborghini, private jets and elaborate vacations.
The investigation, dubbed Project Swan, began after police said they received numerous complaints about an investment fraud, starting in July, 2022, that involved a man from around Whitby, a town east of Toronto.
During their investigation, police said they became aware of an associate who also claimed to be making large weekly profits through investments. Victims gave money to the associate, expecting he was investing it on their behalf to generate large profits. These victims, police said, “were ultimately defrauded as well, and unable to recover their funds.”
The investigation, they said, involved countless interviews, analysis of thousands of financial documents and more than 40 court orders to gather evidence. Durham’s financial crimes unit worked with the enforcement branch of the Ontario Securities Commission (OSC) in a joint task force, and collaborated with the Toronto Police Service, York Regional Police and the Financial Reports Analysis Centre of Canada (FinTRAC).
None of these allegations against Mr. Pleterski or Mr. Murphy have been tested in court. Some details of the allegations involving Mr. Pleterski are covered by a publication ban.
Police did not disclose how many investors they found were victims of the alleged fraud, citing the publication ban. The single charge of fraud of over $5,000 is a global charge, which means it encompasses all the investors in one count.
Detective David Jaciuk of Durham Regional Police’s financial crime unit said they spoke with many witnesses and are aware there are more out there. “A lot of lives have been devastated by this,” he said.
Under the Criminal Code, fraud over $5,000 carries a maximum sentence of 14 years in jail, Det. Jaciuk said.
In July of last year, several men were charged with the alleged kidnapping and assault of Mr. Pleterski. That case is still before the courts.
The Globe and Mail reached out to Mr. Pleterski via social media for comment and did not hear back. It reached out to a lawyer who has represented him in the past, who said he is not involved in this matter. The Globe e-mailed two lawyers listed in recent court documents as representing Mr. Murphy and did not hear back.
Norman Groot, a Toronto-based fraud recovery lawyer, said about 150 victims of this scheme had contacted his office back in August, 2022.
“For many people, it was a significant part, if not all, of their life savings,” he said. “A lot of people get ruined through these things. ... And it happens based on trust. Most people are trusting that the person who told them about the investment opportunity, that it was accurate what they were telling them.”
What makes this case unusual, he says, is the young age of the men who were soliciting the investments. Only about $4-million has been recovered of at least $40-million solicited, he added.
The size of the alleged fraud was “massive and spanned across multiple jurisdictions,” Stephen Henkel, the OSC’s senior investigator, told the news conference.
He urged potential investors to always check the registration of any person or business trying to sell an investment or give investment advice; neither of the two arrested were registered with the OSC in any capacity, he said.
As of February, it appeared that he may have been soliciting further investors, Mr. Henkel said.
This week’s press conference was held, Mr. Henkel said, “to look for more witnesses – we know there’s more witnesses out there – but also to advise the public, as an investor warning, just to be more cognizant. Check with Canadian security regulators before you invest and do your due diligence.”
With reports from Stephanie Chambers in Toronto
Tavia Grant