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Winnipeg Free Press - PRINT EDITION

Manitobans in pyramid scheme: RCMP

By: Gabrielle Giroday

Posted: 01/14/2011 1:00 AM

MOUNTIES say they have busted a pyramid scheme, with seven Manitobans among 13 people charged in an illegal operation in which people recouped their investments by persuading new recruits to enter the plan.

The probe focused on Business In Motion (BIM), a now-defunct corporation based in Mississauga, Ont. Mounties said from 2008 to 2010 the company held promotional meetings in Manitoba to attract new investors -- but the investment advertised was based on fraud.

"Our evidence shows that people were being told to bring others into the program," said Cpl. Chris Lambert, of D Division's commercial crime section.

He said the products like travel discount packages and gemstones were "window dressing" used to distract people from the "core nature of the business," and the fraud depended on enlisting new people into the scheme.

"People have to take a really hard look at exactly how the business makes money," he said.

"Everybody knew what they were getting into, whether they recognized it or not, I'm not too sure, but everybody should have known."

The Mounties announced charges Thursday against seven Manitobans from the Steinbach and Winnipeg areas.

Lambert said BIM began having meetings in Steinbach in spring 2008.

Michael Rozak, 57, Kimberley Heier, 50, Lisa Behrendt, 48, Annie Petkau, 38, Katharine Reimer, 52, Melinda Scheper, 45 and David Kauenhowen, 59, were all charged with illegal lottery scheme under the Criminal Code.

All were to appear in court in Steinbach after summonses were filed late last year.

Lambert said the accused were involved in organizing promotional meetings and asking for money from others to put into the business.

Mounties do not have an amount of money that was bilked in the operation, he said, nor a total number of victims impacted across Canada.

He said, however, the damage caused by pyramid schemes can be extensive to its victims that can be "devastating" due to their wide reach.

He said a lot of the advertising for the scheme came through "word of mouth."

"Not everybody is a professional salesperson," he said.

"A lot of human nature is... we go to the people that we know."

Attention on BIM intensified in February 2009 after a CBC Marketplace investigation sent a producer with a hidden camera into a Mississauga meeting promoting the company.

gabrielle.giroday@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 14, 2011 A9

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