In early October 2008, the RCMP Winnipeg Commercial Crime Section began investigating several complaints of fraud relating to investments made through Jack Shapira and his Winnipeg company known as Keywest Leasing.
Investors alleged that Jack Shapira solicited their private capital, as a means to fund leases of medical equipment purportedly leased to reputable medical organizations and government agencies across Canada. The equipment leased would allegedly generate from 20% to 35% returns on their investments with Keywest Leasing and Jack Shapira acting as the lease broker.
RCMP investigation showed that several companies that were named on alleged lease numbers had no business relationship with Keywest Leasing or Jack Shapira. In addition, new investors were used to pay off existing ones since the scheme did not generate any returns. In 2008, problems began to arise when Shapira was not able to find enough investors and/or capital and ran out of money.
The investigation showed that between June 2003 and September 2008, Jack Shapira collected about 2 million dollars from investors and other sources resulting in the investors losing about $270,000 as a whole with the severity of loss varying between investors. Most notably, the largest losses were incurred by most recent individuals who financed the alleged leases.
This flow of money is consistent with how a Ponzi scheme works, where alleged returns are actually paid from new money being invested. Eventually the promised rates of return cannot be met as not enough money can be generated to pay the growing amount of money invested.
On July 5, 2010, 45-year-old Jack Michael Shapira of Winnipeg was charged with 11 counts of Fraud over $5,000. He has been summoned to appear in Winnipeg Court August 5, 2010.
Sgt. Line Karpish
RCMP Winnipeg Commercial Crime Section
(204) 984-1617
