Police arrest two in alleged $50m net fraud

The FBI has arrested two men in connection with an alleged $50 million internet scam of a magnitude comparable to that of the infamous New England fraudster Charles Ponzi.

Alyn Richard Waage and James Michael Webb, of Canada and California respectively, were arrested last week by the FBI, which was investigating an alleged scam run from the Tri-West Investment Club website. A third man is apparently still on the run.

Working on the 'rob-Peter-to-pay-Paul' principle, the scammers offered 'no risk' investment schemes guaranteeing returns of 120 per cent a year along with bonus referrer fees for introducing other investors.

A statement from the US Department of Justice, said that as much as $50 million may have been tricked out of investors and used to buy property in Mexico and Costa Rica and yachts and helicopters.

Waage, allegedly the ringleader already has four fraud convictions to his name and is actively wanted in Canada for 44 counts of real estate fraud.

If convicted, the culprits face between five and ten years in prison and a fine of up to $1 million.