In the world of investing, the advice “if it’s too good to be true, it probably isn’t,” is a cardinal rule — one that shouldn’t be broken unless there’s reason to do so. Unfortunately, two Ontario residents lost a combined $90,000 after investing with two private investment companies. And they think their money might be gone for good.
Helen Boodoo, a retiree, invested her life savings of $30,000 in a private landscaping company a year and a half ago after her friend recommended the opportunity to her. Boodoo was told she would get her principal back in just two months, plus $3,000 interest.
Now, she’s told the money is gone and won’t be coming back, she relayed to CTV News.
Meanwhile, Nick Hatzimalis gave a private lending company $60,000 after seeing a lucrative real estate opportunity appear. He was promised monthly interest payments for a year and a half and then he would receive his principal in full. Hatzmalis received payments for a year before the company informed him they were having financial setbacks and he hasn’t received a cent since.
“I took that gamble and it bit me, unfortunately,” he told the news outlet.
How private investing scams work
It’s safe to assume Boodoo and Hitzmalis didn’t make a rash decision when they invested their hard-earned cash. And the same goes for other Canadians hurt by fraudulent investments. There were over 3,800 victims of investment fraud in 2023, who lost a combined $310 million, according to the Canadian Anti-Fraud Centre.
So what prompted them to make such risky investments?
Private investing scams are complex, typically offering massive incentives in a short time period, says TD Bank. It could be in a new startup, or the promise of healthy returns from a successful private corporation. Common tactics include using time-bound, high-pressure situations to convince you to invest. “This opportunity is only available now,” they might say.
Private investment scammers can also present themselves as having secretive information or “hot tips” FAIR Canada advises. This incentivizes otherwise cautionary investors to take a leap of faith for large returns that have no basis in reality.
Investment scammers can also position themselves as trustworthy by finding publicly-available data on potential victims to relate with them more and build a trusting relationship. This can make the investment seem genuine, since it feels that you have a real connection with the person running it. However, their motives are wholeheartedly duplicitious.
How to spot private investment fraud
Private investments scams prey on our desire to attain our financial goals almost instantaneously, instead of the tried and true route of making consistently good investing choices over a long period of time.
Here’s how you can spot investment fraud according to FAIR Canada’s guide, so you don’t get pulled in by the allure of massive returns:
- Watch for unrealistic gains: Investment fraud schemes are replete with promises of “guaranteed returns” with no risk. Unless you’re investing in a GIC, you’re likely looking at a scam.
- Pay attention to unanswered questions: If the investment company you’re dealing with isn’t answering your questions or asking you to trust them, they’re likely fraudulent. A real private investment firm would be happy to answer your questions to help you make the right decision with your money.
- Check their registration: If an investment opportunity seems legitimate but you have some concerns you can’t put a finger on, check if their company is registered with the Canadian Securities Administrators’ National Security Register. If they aren’t registered that doesn’t mean they are fraudulent by any means, but registration does prove they have required qualifications.
What you can do if you fall victim
If you’ve been tricked into an investment scam, the best thing to do is act quickly.
If you believe your accounts may be compromised, contact your financial institution immediately about the issue. This can protect your assets if the scammers have direct access.
You should also report the fraudulent individual or company to your local securities regulator so they can keep the public informed. Reporting the event to the Canadian Anti-Fraud Centre is also important, along with the Canadian Regulatory Investment Office.
In terms of getting your funds recovered, taking legal action is one route you can pursue, but it can be costly and time-consuming. Unfortunately, your options are quite limited as private investment scammers can be entirely fake individuals or corporations with little-to-no personal information made public. Whatever you do, do not solicit requests for fund recovery services from non-lawyers — these are also a common source of fraud.
A growing Canadian concern
Investment promises of guaranteed returns with no risk are attractive in a market environment where normal investments such as ETFs and mutual funds swing up and down depending on the latest tariff announcement or other precarious market conditions. But regardless of how their bank accounts are doing, Canadians need to remain vigilant about any investment opportunity that comes their way. Not all investments are created equal, so use your money wisely.
Sources
1. CTV News: Two Ontario residents lose $90,000 to private investing, by Pat Foran (Jul 10, 2025)
2. Canadian Anti-Fraud Centre: Fraud Prevention Month 2025
3. TD Bank: Investment scams—what to watch out for
4. Fair Canada: Beware of Investor Frauds and Scams
5. Fair Canada: A Guide to Protect Yourself Against Investment Fraud
3. Canadian Securities Administrators: Are They Registered
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.