Toronto man charged with defrauding 28 investors of $6.6M

A Toronto man has been charged for allegedly defrauding 28 investors of $6.6 million they provided to trade in foreign exchange.

Instead of putting investors’ funds into individual trading accounts, the Ontario Securities Commission (OSC) alleges Seyed Mohammad Ali Nojoumi — who goes by Ali Nojoumi — and two other individuals controlling Smart Prime Group used the money to pay personal expenses and other investors. None of them were registered to sell securities in Ontario. 

Nojoumi, 46, was arrested and charged with fraud over $5,000 and possession of proceeds of crime last week and then released on a $5,000 bail with a surety, according to Ontario Court of Justice records. 

CBC Toronto first reported on him in April 2024 after some of the investors he’s now charged with defrauding sued Nojoumi to try to recover their investments. Mina Amini and her husband were among them. The couple invested $310,000 from their savings and a loan they were unable to repay, which has since forced them into bankruptcy.

“We try to start again, but honestly, it’s so hard,” said Amini.  “The OSC has helped us a lot. Without their help we would have lost our hope.”

Those lawsuits, which are still before the courts, and court records alleged that Nojoumi solicited at least $3.5 million through Smart Prime Group while facing a fraud charge for a prior alleged investment scam.

That charge was laid by Toronto police in February 2019. But nearly three years later, the Crown prosecutor agreed to withdraw it after Nojoumi paid back the alleged victim, according to emails filed in Ontario’s Superior Court of Justice. 

The investor lawsuits allege Nojoumi likely used their money to pay that restitution. Court records show Amini and her husband invested their $230,000 business loan 10 days before Nojoumi made his second restitution payment in December 2021.

After the criminal charge was dropped in early 2022, the lawsuits allege Nojoumi went on to defraud another $6.5 million from investors in the Toronto area’s Persian community.

Nojoumi did not respond to requests for comment for this story. But in his statements of defence for the lawsuits, he denied all of the allegations against him — including that he engaged in a fraudulent scheme. Instead, his statements of defence say the investors’ funds were loans that aren’t yet due to be repaid.

‘He has to pay all of us’

The criminal charges provide “a little bit of relief” for Ency Rahmani, another of the 28 investors whose reporting to the OSC led to the criminal charges.

“I will not be happy until I see that full justice is done,” she said. “He has to pay all of us. It’s not only the amount of money that we have invested, it’s the emotional, the stress that we have gone through … you can’t put a dollar amount on it.”

Rahmani was on maternity leave with her first child in 2022 when she invested $13,500 US with Nojoumi for some extra financial support. By the time she discovered there was a problem in 2023, Rahmani was pregnant with her second child and she and her husband had signed a contract for a pre-construction home. 

“I was counting on this money,” said Rahmani. “Then, right at the time, they said all the accounts were frozen: ‘There is no money. We can’t give anything back to you.’”

As a result, she says they couldn’t afford to close on their house and lost their $90,000 deposit. Rahmani says there need to be changes to how fraud is policed and prosecuted in Canada to make sure fraudsters pay back their victims and to deter others. 

“We didn’t move and leave behind our family and relatives to come here and suffer again,” she said. “Because we trusted. We said, ‘OK, Canada is somewhere that we can receive justice.’”

CBC Toronto has continued to report extensively on fraud since its investigative series The Cost of Fraud revealed in 2023 that only a fraction of fraud cases were making it through Ontario’s justice system. 

New numbers from Statistics Canada recently showed the problem has only gotten worse since then, with most such cases in Ontario ending with charges being stayed or withdrawn since 2020.

For Amini, the recent criminal charges have given her hope that justice can still be served for investors like her.

“I wish this fraud case will be resolved as soon as possible and the victims’ money will be returned, and this case will serve as a clear lesson so no one else has to go through what we have experienced,” she said. 

Nojoumi will be back in court in Newmarket, Ont., late next month.