Near Decade Sentence for Ponzi Scheme

By Ron Fanfair, Toronto Police Service Published: 6 a.m. November 19, 2019
Updated: 10:04 a.m. November 19, 2019

A man found guilty in a Ponzi-style fraud scheme was given the second stiffest penalty ever imposed in a Canadian court for fraud.

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A Superior Court judge last month conveyed after sentencing Steven Nowack to nine years in prison for 12 counts of fraud over $5,000, committed between November 2009 and July 2013. 

The judge also ordered the scam artist to pay his victims nearly $15.7 million within three years of his release from prison.

 “The Crown requested eight to 10 years and the Judge came back with nine,” said D/Const. Valerie Dahan of the Toronto Police Service Organized Crime Enforcement Financial Crimes – Corporate Crime Section. “It’s a realization of how much of an impact fraud has on a victim (s). In the past, it was seen as a White-collar and victimless crime.” 

In the ruling, the Judge Robert Goldstein wrote: “Fraud has a wide impact. It erodes trust, the basic lubricant of a market economy. Fraud parts money from productive uses and directs it towards unproductive uses. Fraud also takes an emotional toll on its victims. I reject the notion that because this was only a pecuniary crime - and some of the victims are wealthy-the impact is not as severe as violent crime. Fraud is a crime of emotional violence. A person like Mr. Nowack cultivates a relationship with the victim in order to build trust. When that trust is breached the victim questions his or her judgment, stability, and intelligence. The victim feels shame and embarrassment. The financial and emotional impact can be devastating and change a victim's life forever.”

Fraud has a wide impact. It erodes trust, the basic lubricant of a market economy. Fraud parts money from productive uses and directs it towards unproductive uses. Fraud also takes an emotional toll on its victims.

The investigation commenced on July 30, 2013 and grew into a Joint Forces Operation.

The investigation revealed that Nowack was perpetrating a Ponzi-style foreign currency investment fraud. Individual investors provided funds ranging from $100,000 to $5,000,000 which were to be invested via a foreign exchange firm with Nowack acting as their trader.

Evidence showed that investment funds provided by the victims were not utilized for their intended purpose as portions of the money went towards paying off other investors or were used to fund Nowack’s lavish lifestyle.

Dahan and former 23 Division Fraud officer Baj Sandhu, who is now with the Ontario Provincial Police, were the officers-in-charge of the six-year case with the support of 23 and 53 Divisions along with the Ontario Securities Commission, the Ministry of Finance, the Royal Canadian Mounted Police and the Federal Bureau of Investigation.

“This was a huge investigation and we all remained committed over the six years,” said Dahan. “The teamwork among the various agencies was tremendous and the Crown was also dedicated to seeing this case through from the onset.”

Dahan said the commitment of all involved throughout the trial process, including witnesses, ensured the conviction.

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