MONTREAL, Friday, May 9, 2008 – On Thursday, May 8, 2008, the Integrated Bankruptcy Team, which is made up of investigators of the RCMP and the Office of the Superintendent of Bankruptcy, arrested five alleged fraudsters who could face charges of fraud and conspiracy to commit fraud for orchestrating an abuse of credit scheme of nearly $2.5 million at the expense of financial institutions.
The suspects were arrested as part of Operation "Commodus" when approximately sixty police officers conducted searches in three Montreal residences. The police seized a number of items, including CA$88,000 and close to US$79,000 in cash, a software tool used to make magnetic strip cards, 70 blank magnetic strip cards, and various consumer goods valued at several thousand dollars.
The alleged fraudsters, four of them from Montreal and one from Ottawa, are suspected of belonging to the same criminal organization which is believed to have defrauded financial institutions by abetting individuals not to repay debts incurred on credit cards and credit lines obtained from these financial institutions.
In short, the scheme used by the alleged fraudsters was as follows: the alleged fraudsters recruited low-income people and helped them obtain credit cards and credit lines. They then encouraged these people, by giving them a percentage of the amount of the fraud, to borrow up to the authorized limit without repaying the financial institutions. The criminal organization sometimes went as far as telling the people they recruited how to file for bankruptcy.
The investigation launched in June 2007 is ongoing. More arrests could be made and additional charges could be filed against the suspects and against the people who were recruited to take part in some of the fraud schemes.
Consumers should know that piling up debt while knowing that it will be impossible for them to repay can constitute a criminal offence. For consumers who are unable to repay their debts, bankruptcy is a solution ruled by law, but it can constitute a dishonest act when a bankrupt conceals or fraudulently disposes of property before or after initiating the bankruptcy, or fails to comply with the duties and obligations of a bankrupt.
Economic integrity is one of the priorities of the RCMP. It is important for the federal police to investigate abuse of credit and fraudulent bankruptcy schemes which are sometimes used by organized crime as means to finance their activities or to launder money. These fraudulent activities lead to several millions of dollars in losses for legitimate businesses.
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For information:
Communications Office
Montréal: 514-939-8308
