April 12, 2017

MSC and Winkler Police warn: Diamond Deal is No Golden Opportunity.

Winnipeg - The Manitoba Securities Commission (MSC) and the Winkler Police Service are issuing a joint warning to Manitobans about – an Internet-based diamond distribution company purportedly operating from Hong Kong. Evidence indicates the company may be operating a so-called Pyramid scheme, which has cropped up in Manitoba.
In a Pyramid or Ponzi scheme, investors are promised high returns. They operate by paying interest to investors with money brought in by new investors. These new investors are attracted by stories of people claiming to be getting high returns, and in some cases by receiving small amounts of money back in the early stages of the scheme. These schemes inevitably collapse, and investors lose money.
PayDiamond’s model is to raise money from investors which is pooled into a fund to purchase raw diamonds which the company purchases, cuts, polishes and markets. Investor returns are allegedly from the profits of the pool they have invested in.

Investors are called “affiliates” and buy in between $200 and $36,000, for terms up to 50 weeks. Investors are supposed to receive a weekly payment until the end of the term when the diamonds are sold with profits to be split with the affiliates.

“There is a heavy emphasis on recruiting new investors,” says Len Terlinski, MSC investigator, “An ‘affiliate’ is paid based on the amount invested by people he or she recruits. This is a red flag. Additionally, the ‘affiliate memberships’ maybe be considered a trade in a security, and PayDiamond is not registered to sell securities in Manitoba.”

MSC has recently received calls about the legitimacy of PayDiamond, while the Winkler Police Service has received reports of local residents who have been recruited into the scheme.

“We are aware of a Winkler resident who has recruited at least five individuals into the scheme,” says Constable Chris Kalansky of the Winkler Police Service. “This individual has convinced friends and family to invest in PayDiamond, and has profited through recruitment fees. This is a classic Pyramid/Ponzi scheme model.”

Members of the public are advised to contact MSC or their local police if they believe they have been targeted by a fraud attempt. MSC’s anti-fraud line is 1-855-FRAUD-MB.

The public can also visit for more information on common frauds and scams.

The Manitoba Securities Commission is a division of the Manitoba Financial Services Agency, a Special Operating Agency of the Government of Manitoba that protects investors and promotes fair and efficient capital markets throughout the province.
Media Inquiries:                   
Jason Booth, Communications Coordinator, MSC  |  204.945.1660 |
Constable Chris Kalansky, WPS | 204.325.0829 |