Alleged Ponzi schemer asks for protection

"There's always a balance we have to run that somebody isn't claiming falsely that there are security issues and try to take advantage of it, but on the other side, if it looks to be any realistic issue on security we take it very seriously … and this one sounds like there's a whole whack of really mad people at this guy," Justice Campbell said.

National Post
January 5, 2010

Alleged Ponzi schemer asks for protection
'Weird' case; Judge decides to limit information for safety
Karen Mazurkewich

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Shots were fired at the home of Tzvi Erez's stepsister on March 25, 2009. Erez faces charges that he ran a Ponzi scheme. Tyler Anderson, National Post

The family of a man allegedly involved in a $27-million Ponzi scheme that involved investors in Toronto's Jewish community received death threats that prompted a commercial court judge to censor documents for security reasons.

Violent threats are rare in such commercial proceedings, according to Justice Colin Campbell of the Ontario Superior Court of Justice, but this case, he told the National Post, is "a weird one."

Justice Campbell agreed to a request from lawyers representing family members to redact, or censor, portions of a receiver's report that contained information about Tzvi Erez's family after receiving information from two different incidents — shots fired on a home in March and threats made to two students in a school in September.

"There's always a balance we have to run that somebody isn't claiming falsely that there are security issues and try to take advantage of it, but on the other side, if it looks to be any realistic issue on security we take it very seriously … and this one sounds like there's a whole whack of really mad people at this guy," Justice Campbell said.

Mr. Erez, the 42-year-old man who is at the centre of a forensic investigation led by a court-appointed receiver, ran a tiny print shop in Richmond Hill. Mr. Erez claimed in court documents that he was brokering large print jobs for blue-chip clients, and approached investors through intermediaries and brokers for cash advances on large printing orders, according to the receiver's report. In return, he is alleged to have promised the investors to return their original investment plus interest fees of 30% per annum, according to several of the alleged victims who do not wish to be identified.

After a nine-month investigation, Jerry Henechowicz, the receiver, determined that there were no large orders, and concluded that it was clear from his investigations that "Tzvi operated a Ponzi scheme." There are 76 high-profile claimants recognized by the receiver. On June 18, Mr. Erez was charged and arrested by Toronto Police on seven counts of uttering a forged document and one count of fraud over $5,000. None of the allegations have been proven in court.

The unravelling of the alleged Ponzi scheme may have been the trigger for the two violent incidents against Mr. Erez's family that were brought to Justice Campbell. The first incident occurred on March 25, when two shots were fired into the home of Mr. Erez's step-sister Hila Meisels. None of the 10 people reportedly in the house were injured during the incident, but sources say Mr. Erez's two children were staying in the residence at the time. The home on St. Germaine Avenue in Toronto has since been sold. The family has not responded to requests for comment.

In September, the school administration of the Posluns branch of Associated Hebrew School (AHS), received a threatening communication related to a family under criminal investigation, according to reports in the Jewish Tribune. The school announced that it had beefed up security, and sent an email to parents assuring them that all necessary measures had been taken, including instructing the family under investigation not to send their children to school.

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http://www.nationalpost.com/related/topics/story.html?id=2405667


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