On April 23rd arrests were made by the Ontario Securities Commission in the Ponzi scheme involving Banknote Capital Inc. of Chatham: https://www.osc.ca/en/news-events/news/osc-charges-ryan-rumble-michael-dziedzic-and-justin-foss-fraud .
One of the concerns raised by victims is just how long it takes for criminal charges to be laid. The Crown will say that an accused’s Charter right to a timely trial as discussed in R. v. Jordan results in charges only being laid after the police investigation is completed. A police investigation into a Ponzi scheme may take considerable time. During the lag time from complaint to criminal charges, stolen assets may be dissipated.
The Banknote Capital Inc. Ponzi scheme referenced above is a case study of a timeline of the civil, bankruptcy and criminal process. We have knowledge of this story as our firm was involved in the Class Action civil process and the bankruptcy assignment. Some of our clients advised us when they made complaints to police and the OSC. The media release of the OSC yesterday was news to all those who had an interest that the Crown has decided to prosecute this case.
What follows is a chronological comparison of the unfolding of the civil class proceedings, the bankruptcy process and the criminal process. At the end of this ask yourself which is most effective for increasing the chances of recovery.
The Class Action Civil Proceedings
Most fraud recovery civil proceedings are private or group actions. Very few are class proceedings. There are various reasons for this, such as difficulties in certifying a class. The Banknote case was the second Ponzi scheme where we utilized a class proceeding for tracing and preserving stolen assets.
May 11, 2023, was the date the civil courts issued a Mareva injunction in an action filed as Hime v. Banknote Capital Inc. (CV-23-0001124-00CP). The civil courts issued an order restraining Banknote Capital Inc. and its directors from dissipating any assets. Given that Banknote Capital Inc. was also a creditor in the Pleterski bankruptcy (a related scam), the court ordered that Pleterski’s trustee also hold any dividend payments in that bankruptcy subject to the Banknote Mareva injunction. The Court further ordered the directors of Banknote to provide sworn declarations of their knowledge of where Banknote assets were being held.
May 30, 2023, was the first return date for the Banknote Mareva injunction. The Court ordered the three directors of Banknote examined on their asset declarations, as well as some known recipients of funds from Banknote. The Court further issued a “Stand and Deliver” order requiring the director Ryan Rumble to transfer his data devices to a data forensics expert so that all data relevant to the operations of Banknote could be preserved.
June 12, 2023, was the second return date for the Banknote Mareva injunction. The Court ordered the director Ryan Rumble (“Rumble”) to attend for a second examination given the significant number of unanswered questions from his first examination. The Court further ordered the other two directors to account for a specific transaction of funds from Banknote.
September 22, 2023, was the next significant return date on the Banknote Mareva injunction. The Court expanded the Mareva injunction and issued a Mareva injunction against its director Rumble personally. This was because tracing efforts determined that significant Banknote client funds were paid to Rumble personally or were transferred by Banknote to Rumble and not accounted for. Rumble was also required to provide monthly income and expense logs to our office, and to report his source of funds for any expenditures. The Court ordered a further examination of Rumble.
November 2, 2023, was the date of an application to assign Banknote into bankruptcy. By this time what could be traced and preserved of Banknote assets was completed. The civil class action process was much more efficient and timely than the bankruptcy process could have been – for reasons beyond the scope of this blog. It was when Rumble’s lawyers suggested that they should be paid from preserved Banknote assets that the plaintiff determined the cost-benefit of the bankruptcy process over the civil process warranted a bankruptcy assignment of Banknote.
Rumble was not assigned into bankruptcy, and the civil process continued against him. This was because the bankruptcy process never managed to deal with Pleterski very well – allowing him to run around the world with his passport without basic restrictions such as income, expense and source of funds reporting.
November 14, 2023, was the next significant date in the Rumble Mareva injunction. The Court ordered that Rumble produce income and expense reports, including evidence of a trip he took to Dubai while the civil proceedings were ongoing. The Court further ordered Rumble to surrender his passport and attend for further examinations. Rumble did not surrender his passport. November 20, 2023, was the date that Banknote was assigned into bankruptcy.
On December 14, 2023, the civil courts in the class action proceedings against Rumble issued an arrest warrant for Rumble. We learned that Rumble had fled to Dubai. The Court ordered the civil arrest warrant posted on CPIC and with Canadian Border Services with an Ontario wide range. Rumble remains a fugitive to this day. The process of tracing assets in Rumble’s name continued.
June 30, 2024, was the date the Mareva injunction was against extended against Rumble. The Court ordered the Mareva injunction extended against companies we learned that Rumble had an interest in. The Court further ordered various financial institutions including a crypto exchange to produce record and preserve assets. Similar orders followed as the tracing process continued.
On January 23, 2025, the Court in the civil class proceeding issued a $250,000 cost order against Rumble personally. This order will be paid from assets preserved through the Mareva injunction process against Rumble. At this point the representative class plaintiff decided not to proceed to a certification motion but rather discontinue the class proceeding with leave to start a group action of select investors as against the directors of Banknote personally.
On February 20, 2025, the Court in the civil proceedings ordered a discontinuance of the class proceedings within 60 days, granting the opportunity to issue the Mareva injunction against Rumble in the new group action. On April 2, 2025, the Mareva injunction was ordered against Rumble in the group action. The new civil action will now commence its winding road through the pleadings phase, discovery and to a judgment subject to what occurs in the criminal process.
As mentioned above, at the point where the class proceeding evolved into a regular action, Rumble was a fugitive wanted on warrants issued by the civil justice system – not the criminal or bankruptcy systems.
The Criminal Process commences after the Class Proceeding had Concluded
On April 23, 2025, as mentioned above, criminal charges were laid against Rumble and the two other directors of Banknote. The criminal investigation of the Banknote directors is wholly independent of the civil and bankruptcy process described above. The criminal process does not allow for collaboration with the civil process.
The point to this story is that the unravelling of this Banknote Ponzi scheme chronologically depicts why it is necessary to attempt recovery through the civil process. Had the victims of this Ponzi scheme waited for the criminal process to unfold, any hope of recovery would be diminished.
Another issue that victims should be aware of is that the criminal process does not share their investigation and case with them – even after charges are laid and arrests are made. Often victims of a Ponzi scheme will advise us that they do not know what to do because they are given no access to whatever tracing the police may be involved in. We advise such victims that if they want to learn what happened to their funds before a criminal trial, their only option is to bring their own tracing application in the civil system or, as a slower route, attempt the regular civil process, or attempt a bankruptcy application.
Our firm often reminds fraud victims that they cannot reasonably rely on Canada’s criminal system for recovery or justice in fraud matters. Criminal prosecutions are guided by what the Crown determines is in the public interest. Many fraud complaints are not prosecuted in the criminal justice system as the Crown decides that a dispute between individuals over money is not a matter of public interest. Often Ponzi schemes are eventually prosecuted in the criminal system because there is a public interest in prosecuting persons who cause losses to a large number of investors.
The Renton Ponzi Scheme
Our firm commenced a class proceeding in another Ponzi scheme perpetrated by a police officer – Larry Renton: https://lfpress.com/news/local-news/ex-opp-officer-investigated-in-alleged-3m-ponzi-scheme-dies . A similar timeline of class proceedings unfolded while the police investigated from a criminal perspective. Similar to the Banknote story above, the class proceeding was discontinued after the Mareva injunction process ran its course and before criminal charges were laid. As indicated in the article linked above, Renton died before the police had concluded their investigation.
FINTRAC’s Contribution Recognized
We in the civil process acknowledge that the criminal process is often significantly better funded and has access to government agencies that are not available to victims in the civil process. On April 24, 2025 FINTRAC issued the following statement:
FINTRAC’s financial intelligence was recognized by the Ontario Securities Commission in an investigation where three individuals have been charged with fraud. The accused allegedly raised more than $11 million from investors between November 2020 and August 2023 which were used to repay existing investors and diverted to the benefit of one of the accused.
Our commentary: effective fraud recovery is a combination of awareness of the relevant case law, being educated of the rules and processes of the court, and experience in handling such cases. There is no ‘one strategy fits all’ solution for fraud victims.
Even if class proceedings are utilized in a recovery effort involving a Ponzi scheme, there is no guarantee of any significant recovery. What we can say is that civil proceedings, from a tracing and asset preservation perspective, are far more efficient and effective than the criminal or bankruptcy process. This is something for Ponzi scheme victims to keep in mind.
Inquiries: At Investigation Counsel, we only act for victims. We are Canada’s only boutique victim focused fraud recovery firm. We investigate and litigate fraud recovery cases each and every day.
If you discover you are a victim of fraud, contact us to have your case assessed and a strategy for recovery mapped out before contacting police or alerting the fraudster. The Courts grant tracing and freezing orders much quicker through the civil process than the criminal process, and even if a criminal complaint is made, the police most often do not disclose their findings with victims.
We also promote victim advocacy and academic discussion through various private and public professional associations and organizations. If you have an interest in the topics discussed herein, we welcome your inquiries.