Timeline for an (alleged) Ponzi scheme

 

What follows is an approximate timeline — gleaned from a variety of news reports — of main events in the rise and fall of a suspected Ponzi scheme known as the Institute for Financial Learning (IFFL) . What is perhaps amazing is how many run-ins the key players, Brost and Sorensen, had with regulatorsbefore they were shut down (not all the run-ins are mentioned in the timeline). Also amazing is that Brost himself apparently was scammed out of millions of dollars by a Nigerian-like fraud.
1999Milowe Brost, previously an insurance and mutual-fund representative in Calgary, launches Capital Alternatives Inc. as an information club to help people learn financial strategies.
2000The Alberta Securities Commission (ASC) sanctions Gary Sorenson, a resident of Honduras who had been in the junior mining business in Calgary for over 20 years and founded Merendon Mining Corp. Ltd. in 1996.
2002Mr. Brost is sanctioned by Saskatchewan regulators, according to the Globe and Mail
2003Brost creates the Institute for Financial Learning (IFFL) to offer hot investing strategies to members for a fee (members are given finders fees for bringing in new members). Most of the strategies involve investing in “offshore” companies associated with Sorenson.
2004An IFFL thread begins on scam.com.
Brost is issued with a cease-trade order in 2004 by the Alberta Securities Commission.
2005Graham McMillan learns that his father in Manitoba has invested $50,000 with IFFL.
McMillangets his fathers money back plus interest. He reports Brost to various authorities.
2006McMillan logs hundreds of hours investigating IFFL and works with a leading U.S. geologist, who determines a gold mine being promoted by Brost and his company was an empty prospect, with little chance of producing.
McMillan launches a website warning against the IFFL. “My role as I saw it was to do what I could to head them off at the pass and slow down any fundraising until they could actually get busted,” he later told the media. The website can be found at www.webmechanic.com.au/IFFL/Investments.htm and now serves as a repository for updates from persons who have lost money.
The RCMP later say McMillans Internet campaign was instrumental to their investigation because it shone a spotlight on the investment scheme, encouraging other people to come forward with information.
The ASC calls in the RCMP.
2007Participants in the Canadian Business Online discussion forumidentify IFFL as a scam.
McMillan’s work helps an ASC investigation and Brost is handed a life-time trading ban and record-setting fine of $650,000 (still unpaid) for a fraud involving a company called Strategic Metals Corp.
2008U.S. Justice Department in February 2008 files lawsuits against two U.S. accountants who pitched investments tied to IFFL. Investigations are also said to be in progress at the FBI, IRS and Securities and Exchange Commission, and various provincial regulators in Canada.
2009IFFLceases to operate.
RCMP charge Sorensen and Brost with fraud over $5,000 and theft over $5,000 in September. RCMP allege as much as $400 million was taken from 3,000 to 4,000 victims (by comparison, Montreal-based Earl Jones was accused of running a $50-million Ponzi arrangement).
RCMP documents show a Calgary accountant in the Brost organization claims Brost was himself a victim of a Nigerian money scam by as much as $10 million.
Further reading: How to break-up a Ponzi scheme.

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