Working together, B.C.'s Civil Forfeiture Office and the BC Securities Commission have reunited 37 Canadians with the full amount of $190,121 they lost to fraud in 2003.

Two B.C.-based companies targeted the investors, largely through word-of-mouth promotion. The investments offered by Wellspring Capital Group promised investors a return on their investments through various business schemes. Investors paid for their investments through a numbered company that called itself Springpay Systems.

In reality, the only source of funds for Wellspring's income programs was new investors' money. The companies later admitted to operating illegal Ponzi schemes.

Acting on a tip from authorities in the U.S., where similar scams were discovered, the BC Securities Commission located the Canadian investors' funds in B.C. bank accounts. The commission froze the funds, investigated, then referred the matter to the Civil Forfeiture Office, which pursued a successful forfeiture action and then returned funds to investors.

In March 2007, a director of the two companies was convicted in the U.S. and sentenced to 10 years in prison for activities that were substantially the same as, and related to, those carried out by Wellspring and Springpay in Canada.

The amounts reimbursed to the 37 victims ranged from $250 to $50,120. The average claim was just over $5,100.

Quick Facts:

• This is not the first time the Civil Forfeiture Office and the Commission have worked together. In July 2007, B.C. residents who lost an estimated $1.3 million became eligible to claim a share of $500,000 recovered through civil forfeiture.
• B.C.'s five-year-old civil forfeiture program is one of Canada's oldest. Today, seven provinces have established them to target tools and proceeds of unlawful activity.
• B.C.'s program has not lost any of its more than 250 cases concluded to date. Of $17 million in proceeds forfeited so far, the Province has returned almost $700,000 to victims directly linked to forfeited assets.
• Last year, the Civil Forfeiture Office concluded 74 cases and secured 18 properties, six vehicles and 56 sums of cash.
• Since Jan. 1, 2011, police have referred 71 new files for which the office has initiated proceedings. Today, more than 200 cases are ongoing and the net value of assets currently restrained pending resolution of active forfeiture actions is $22.6 million.

Learn More:

See the BCSC settlement agreement: http://www.bcsc.bc.ca/release.aspx?id=7662

Read details of an earlier civil forfeiture case that returned funds to B.C. scam victims: http://www2.news.gov.bc.ca/news_releases_2005-2009/2007PSSG0054-000891.htm

View B.C.'s Civil Forfeiture Act: http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_05029_01

Contacts:

Government Communications and Public Engagement
Ministry of Public Safety and Solicitor General
250 356-6961

Ken Gracey
British Columbia Securities Commission
604 899-6577