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Fraudster ordered to pay back $26.9M upon release from prison

'The victims have been devastated by their economic losses. To date, Mr. DeBono has provided no restitution to his victims,' judge says during sentencing
An image of Charles DeBono that appeared in an OPP video.

A Barrie man who bilked hundreds of investors out of millions of dollars will have to pay back $26.9 million after he's released from the penitentiary.

Charles DeBono, 63, was handed a seven-year sentence Tuesday  reduced to four years, three months and 19 days after receiving credit for pre-trial custody. He had earlier pleaded guilty in February to fraud over $5,000 and laundering money. 

He was also ordered to pay $26 million in restitution within five years of being released from prison. He will serve another seven-year sentence if he defaults on paying up.

DeBono sold fake investments in a point-of-sale terminal ownership program in what police said was nothing more than a Ponzi scheme. When banks started shutting him down in 2017, he fled to the Dominican Republic with millions of dollars as well as hundreds of thousands of dollars worth of cars and other assets. 

“The terminals, in fact, did not exist,” Ontario Superior Court Justice Michelle Fuerst said during sentencing.

Approximately 515 people, mostly in Canada but also in Nigeria, lost a combined $29 million, leading some to lose their life savings and retirement incomes between 2012 and 2017.

The Barrie man had no criminal record and held regular middle-class jobs, including in the local used car industry, before creating KIS Media Ventures in 2012, which served as an umbrella organization for illicit companies, including Debit Direct and Business Partners Ventures Inc.

Using fake brochures and elaborate sales messages, DeBono used sales agents and sold his scheme on websites and at trade and franchise shows across the country, according to an agreed-upon statement of facts filed with the court. Those recruited to sell believed they were selling a legitimate business opportunity. 

The point-of-sale terminals were to be placed in high-volume businesses across Canada and the investors were to receive 15 cents per transaction in monthly payouts.

Once he secured clients who thought they were investing in the machines, he sent them monthly financial statements and even dividend cheques in the early days. However, the returns on the terminals were actually being funded by new investor deposits. 

Crown prosecutor Ted Ofiara earlier told the court there was no evidence that any machines were ever placed in businesses and likely the only scanning machines linked to DeBono were the ones he displayed to sell that became a Ponzi scheme.

The business used virtual office space at First Canadian Place in Toronto, but its base was actually an office at a Barrie car repair shop which DeBono owned and was managed by his neighbour, a mechanic. Any mail sent to Toronto was forwarded to a post office box in Barrie.

A woman employed as an administrative assistant essentially handled the bulk of the daily business of Debit Direct at DeBono’s direction out of the office in the garage. During the investigation, she provided police with a USB flash drive containing contracts, invoices, spread sheets, investor names, investor amounts, and text messages. 

In 2014, a salesman was hired to sell the terminals. He believed the business to be legitimate and he himself bought in and encouraged family members to be involved.

A woman was hired to mine data on small businesses, which were then assigned to debit-machine identification numbers. The lists were then sent to investors to suggest that the terminals were generating income.

Fuerst said DeBono incorporated the hallmarks of genuine operations into his scam. He had a website, appeared at shows, hired commissioned salespeople, used contracts, and had a prestigious Toronto address.

Investors received lists of businesses where he said the machines were located, monthly reports as well as regular payments.

“The victims have been devastated by their economic losses,” the judge said Tuesday. “To date, Mr. DeBono has provided no restitution to his victims.”

DeBono also adopted the name of a friend as an alias that he used in some of his correspondence related to the fake business and sometimes in meetings with investors.

In 2014, DeBono met and subsequently married a woman from the Dominican Republic, where he increasingly spent more time and to where he transferred money and assets.

Beginning in 2014, the mechanic noticed DeBono’s obvious display of wealth even though the car business, which DeBono supported, was not profitable, court heard. The following year, the mechanic spotted more than $1 million in one of DeBono’s accounts.

Banks began closing accounts in DeBono’s name and, in the summer of 2017, his scheme began to collapse.

On Aug. 22, 2017, when all the banks closed in on him, he fled to the Dominican Republic with the rest of his money. 

That same month he sent an e-mail using his friend’s name to all of the Debit Direct investors telling them that a payment processing company in Latin America was purchasing Debit Direct. When their payments stopped the next month, they discovered the company had no knowledge of Debit Direct. By then, the Debit Direct website was down and its phone number was no longer in service. 

One of the investors was able to source the e-mail to a mobile phone using a cellular tower in the Dominican Republic.

Nine police agencies fielded complaints from across the country. The Barrie Police Service was the initial investigating agency, but as the scale of the case ballooned, the newly formed OPP Serious Fraud Office eventually took carriage of the entire investigation as its first case.

DeBono had managed to transfer $12.2 million to the Dominican Republic in bank drafts and cables. The money was then moved to his accounts there as well as those of associates.

In the Dominican, he invested in a hotel, homes and dozens of condos, court heard.

He also used the money toward the purchase of two million-dollar townhouses in Richmond Hill.

DeBono was arrested in the Dominican Republic during the height of the pandemic in September 2020 and was found to be carrying fake identification for the Dominican Republic and Guatemala.

Police seized nearly $1 million, and another $300,000 (US). They were also able to restrain a syndicated mortgage investment in Milton totalling $875,000.

At his sentencing hearing in April, court heard that investors lost their life and retirement savings. Their quality of life has been impacted. There have been strained relationships and breakups. 

In victim impact statements some told how their health has been affected and others told about the emotional toll their loss and DeBono’s gain had on them.

The twice-married DeBono has an adult son, a history of prostate cancer, has diabetes and is bipolar.

Fuerst pointed out that he apologized to the court and said he would do his best to make victims of his fraud whole again. He is now compelled by the court to pay back $26 million within five years within his release or go back to jail.

The judge pointed out that he still has assets in the Dominican Republic that Canadian police were unable to access.