June 25, 2024

According to lawsuits and records scrutinised by CBC Toronto, a Thornhill, Ont., man, while defending himself against a criminal fraud charge linked to a supposed former investment scam, allegedly lured no less than $3.5 million for a purported Ponzi scheme.

Seyed Mohammedali Nojoumi, known as Ali Nojoumi, was accused of fraud by the Toronto police in February 2019. Almost three years after, the Crown prosecutor consented to the termination of the charge if Nojoumi compensated the alleged victim in the case. The agreement to withdraw the charge was confirmed in emails submitted to Ontario’s Superior Court of Justice.

Consequently, Nojoumi reimbursed the sum.

Investor lawsuits, however, insinuate that Nojoumi might have applied their monies to cover for the settlement. They also allege that following the annulment of the criminal charge early this year, Nojoumi proceeded to swindle an additional $6.5 million from the Greater Toronto Area’s Persian community, further escalating the total claims in the lawsuits to $10 million.

Norman Groot, a Toronto-based fraud-recovery attorney representing most investors, lamented, “Nojoumi’s exoneration facilitated his involvement in newer similar scams, victimising a fresh set of people.”

Rejecting an interview request forwarded by his legal representative, Gary Caplan, Nojoumi pointed to the ongoing legal proceedings. However, his defensive statements against the lawsuits categorically refute all allegations, including his engagement in a fraudulent operation. His defensive statements affirm the investments were loans yet to be paid back.

Seyed Mohammedali Nojoumi, otherwise known as Ali Nojoumi, is defending six lawsuits from investors who accuse him of defrauding them of roughly $10 million combined. He rejects all their allegations. (ali.nojoumi/Instagram)

Groot, who also represented the investor from the previous case, involving Nojoumi’s fraud charge, mentioned, “Both our client and our office brought up queries regarding the legitimacy of the quasi-restitution sum.”

Emails exchanged between Groot, his past client, and the Crown attorney’s assistant highlight their scepticism about the genuineness of the $360,000 US restitution payout in two cheque forms issued by an unidentified man and the firm, Smart Prime Group.

In his emailed response to the alleged victim that CBC Toronto reviewed, the prosecutor stated, “The defence informed me about verifying with his client that the restitution sum is ‘legitimate.'”

“I believe this should dissipate your concerns, and we can continue handling this situation. I don’t plan to probe the defence further concerning this subject.”

A man stands in front of a wall with the name of his law firm written on it.Norman Groot, a legal expert in fraud recovery, states that his client from Nojoumi’s earlier fraud charge, expressed misgivings about the source of Nojoumi’s restitution monies. (Paul Borkwood/CBC)

Ontario’s Ministry of the Attorney General was questioned by CBC Toronto about the case, and also asked to shed light on the steps Crown lawyers adopt to verify the origin of restitution amounts.

A ministry spokesperson, however, mentioned in an email that commenting would be inappropriate given the lawsuits are still in court.

Fraud Cases with Dropped Charges Pile Up

CBC Toronto ran an investigation in 2021 to evaluate how Ontario’s enforcement structures are responding to the mushrooming fraud cases and whether they’re aiding victims. The four-part series, christened ‘The Cost of Fraud’, unravelled a justice system burdened with cases, hesitant to prosecute fraud, and unable to deter fraudsters.

Statistics Canada data reveals that since 2020, most of Ontario’s fraud cases have culminated with a decision to keep or drop the charges.

All the investors CBC interviewed are members of the GTA’s Persian community — just like Nojoumi — and they were convinced their investments would be professionally handled by Nojoumi via his apparent investment organisation, Smart Prime Group (which made one of the restitution payments in the criminal case).

They claim that their investment decisions were fuelled by belief and trust in Nojoumi, the returns they were already receiving, and a seemingly intricate foreign exchange investment operation’s allure in Canada.

Maryam Alavinasab, currently suing for her $1.1 million investment, stated, “I want to hinder him from deceiving others. He confidently frequents the Persian community, and I’m confident he continues assuring people to invest with him.”

A presentation at Smart Prime’s Toronto office alleged, in Alavinasab’s lawsuit, that the company was 12 years old, licensed to trade securities, had over 80 investors, and managed assets exceeding $50 million US.

“They persuaded us newcomers that it was safe to invest,” she shared with CBC Toronto. “We didn’t think that a large office with an active workforce could be fraudulent. Nobody at the time demanded their money back.”

Alavinasab’s lawsuit, the other five filed, all claim that Nojoumi assured a ‘guaranteed,’ return on investments paid to investors monthly, at a rate of two per cent. Also, they were provided with a login to Smart Prime’s website, which allowed them to monitor their investment status.

Outside of courthouse.CBC Toronto questioned the Ministry of the Attorney General about the measures Crown lawyers take to verify the restitution payments source, a spokesperson via email said, unfortunately, it would be unfitting to comment as this matter is presently in court. (Christopher Katsarov/The Canadian Press)

“Investors believed their funds were channeled into licensed foreign exchange operations,” according to Groot.

“Such an impression was misleading… the data they were being handed were all fabricated.”

Nojoumi Asserts Loans Yet to Mature

Nojoumi’s defence generally claims that anyone who “decided to utilise the software platform developed by Smart Prime Group Ltd. understood or should have comprehended that they were investing in international security trading.”

His statement of defence read, “Each of them, fundamentally advanced investors understood all the financial and legal risks linked with trading as they embarked.”

However, while the court files affirm that plaintiff investments in these lawsuits were basically loans offered to aid Smart Prime Group in financing software applications, they were yet to mature for repayment until sometime later this year. The defence statements didn’t deal with the monthly return payments.

Woman standing in a kitchen.Maryam Alavinasab is bringing legal action against Nojoumi for the $1.1 million she invested through him. She says that without the investment money, she now has to sell her house. (Jon Castell/CBC)

Once investors ceased to receive their

As the monthly installments dwindled, predicaments emerged in line with their pending lawsuits.

Alavinasab and other plaintiffs detected about Nojoumi’s now abandoned fraud allegation and the fact that he and Smart Prime were not officially authorized with security regulators. The Smart Prime website ceased functioning in Spring 2023, as per the court submissions.

“I shattered my husband’s faith,” admitted Alavinasab. “This money rightfully belongs to my children. I labor arduously to save for them.”

Faced with the loss of the investment, Alavinasab has to resort to selling her home to fund her daughter’s future college educational expenses.

Borrowing for Investment

Certain investors such as Nargass Razi and Mina Amini lacked the necessary savings to invest with Nojoumi. However, they were persuaded to take loans in order to reap from the guaranteed two percent monthly yields.

“I was running with a single income and found it challenging to meet my mortgage payments and cover the monthly expenses. I thought this investment would help”, said Razi, who took a $175,000 second mortgage to invest.

A sign for Smart Prime Group.Alavinasab’s lawsuit alleges that she was informed that Smart Prime Group was a 12-year-old company, approved to trade in securities, had amassed more than 80 investors and supervised over $50 million US in assets. (ali.nojoumi/Instagram)

However, now she finds herself working from “dawn to dusk”.

“I have to foot double mortgage interest,” lamented Razi. Nojoumi is “lively enjoying his life…while I can hardly manage to spend quality time with my son.”

Mina Amini and her husband lost $310,000 in their investment, with a major portion of it being a loan. They transferred a $230,000 loan just 10 days prior to Nojoumi’s second payment towards his fraud case in December 2021, as stated in court documents.

“I practically begged Ali Nojoumi everyday for the money, but they couldn’t care less,” complained Amini.

Woman standing in living room.Nargass Razi opted for a second mortgage on her property to invest $175,000 with Nojoumi. Currently, she has to work extended hours to service the increment in interest payments. (Jon Castell/CBC)

Besides the legal suits, Alavinasab, Razi, Amini and other plaintiffs reported Nojoumi’s actions to the Ontario Securities Commission (OSC). The OSC issued a public caution in December 2023 stating that Smart Prime was not legally registered to trade in securities in Ontario.

A representative from CBC Toronto approached the OSC, which refrained from commenting or validating the existence of the complaints or probing to uphold the integrity of their investigations.

While waiting for progress, the investors aim to shield their community from any potential harm through their testimonies and persuade the judicial system to take appropriate measures.

“Even if the money cannot be recovered, if I see him dealing with justice, it will give me the solace to sleep in peace,” concluded Alavinasab.