Ontario, Canada – Doug Grozelle, a former punk rock frontman turned Ponzi scheme mastermind, was arrested Thursday in connection with a complex $24.6 million investment fraud. Grozelle, 49, is accused of orchestrating an international Ponzi scheme that swindled at least 236 investors, including a number of Halton Regional Police officers. He faces two counts of fraud over $5,000.
The arrest follows an extensive investigation by the Ontario Provincial Police (OPP), dubbed Project Pennywhistle, which began in February 2023. Grozelle, who had previously claimed that fraud accusations against him were “blown out of proportion,” was under investigation for his role in defrauding investors through a scheme that allegedly began in 2021.
Despite his bankruptcy in 2018, Grozelle allegedly continued to operate the fraudulent scheme, promising high returns on investments and using new investors’ money to pay earlier ones, a hallmark of a classic Ponzi operation. His victims reportedly lost everything, with some even losing their homes and life savings.
In addition to Grozelle’s arrest, two other individuals, Halton Regional Police sergeant John Williams and lawyer Crystal Masterson, were arrested. Williams, who worked in fraud investigations within the police service, had invested heavily in the scheme and is now the biggest “net loser” at $6.1 million. He faces one count of fraud over $5,000.
Masterson, the founder of a boutique law firm specializing in real estate, was also arrested but has yet to be formally charged, pending further investigation. All three individuals have been released on bail with conditions to avoid contact with any of the investors involved.
Grozelle’s alleged Ponzi scheme used high-profile connections, including police officers, to lend the operation an air of legitimacy. Several investors, who trusted Grozelle due to his connections with law enforcement, have criticized the scheme, which is now under receivership as authorities attempt to recoup funds for the victims.
As the case continues to unfold, more arrests and legal battles are expected, as the authorities attempt to recover lost funds and prosecute those involved in this intricate fraud. Grozelle’s trial is set to proceed, and the case has drawn attention to the vulnerabilities of investors lured by promises of unreasonably high returns.
