Ontario man's fraud charge dropped while he was allegedly running $10M Ponzi scheme: lawsuits

A Thornhill, Ont., man solicited at least $3.5 million for an alleged Ponzi scheme while facing a criminal fraud charge for a prior alleged investment scam, according to lawsuits and records reviewed by CBC Toronto.

Seyed Mohammedali Nojoumi, who goes by Ali Nojoumi, was charged with fraud by Toronto police in February 2019. Nearly three years later, the Crown prosecutor agreed to withdraw the charge if Nojoumi paid back the alleged victim in the case, according to emails filed in Ontario's Superior Court of Justice.

So Nojoumi did.

But investor lawsuits now allege Nojoumi likely used their money to pay that restitution. And after the criminal charge was dropped in early 2022, they allege Nojoumi went on to defraud another $6.5 million from investors in the Greater Toronto Area's Persian community — bringing the total claimed in the lawsuits to $10 million.

"Because no conviction was registered, it gave the opportunity for Nojoumi to perpetrate a whole new round of a similar type of fraud with a whole other group of victims," said Norman Groot, a Toronto fraud-recovery lawyer who represents most of the investors.

Nojoumi declined an interview request for this story through his lawyer, Gary Caplan, whose office is in Vaughan, Ont., because the lawsuits are before the court. But in his statements of defence for the lawsuits, Nojoumi denies all of the allegations made against him — including that he engaged in a fraudulent scheme. Instead, his statements of defence say the funds were loans that aren't yet due to be repaid.

Groot also represented the investor from the earlier case involving Nojoumi's criminal fraud charge. "Both our client and our office raised concerns with the Crown as to the source of funds for this quasi-restitution payment," he said.

Emails between Groot, his previous client and the assistant Crown attorney illustrate their concerns about the legitimacy of the $360,000 US restitution paid through two cheques issued by an unknown man and a company called Smart Prime Group.

In an email response to the alleged victim reviewed by CBC Toronto, the prosecutor wrote, "Defense told me this morning that he spoke to his client and that all money being provided to you for restitution is 'legitimate.'

"I hope that allays your concerns, and that we can move on with this matter. I don't plan to make further inquiries of defense on this issue."

CBC Toronto contacted Ontario's Ministry of the Attorney General for comment on the case and asked what steps Crown lawyers take to verify the source of funds used to pay restitution.

In an email statement, a ministry spokesperson said it would be inappropriate to comment, "as this relates to matters currently before the court."  

Last year, a CBC Toronto investigation examined how Ontario's enforcement systems are handling a skyrocketing number of fraud cases and whether they're helping victims. The four-part series, The Cost of Fraud, discovered an overloaded justice system that is reluctant to prosecute fraud and failing to deter fraudsters.

Numbers from Statistics Canada show the majority of fraud cases in Ontario have ended with a decision to stay or withdraw the charges since 2020.