Another major financial fraud has taken place in Quebec, according to a lawyer who filed lawsuits on behalf of two clients earlier this month.

Jacob Rothman is seeking $350,000 on behalf of two alleged victims of a Ponzi scheme involving an offshore company.

The lawsuits are unrelated to the criminal investigation into Earl Jones, the unlicensed Montreal financial adviser alleged to have cost his clients as much as $50 million.

Rothman claims the two investors who launched the lawsuits were promised high returns from a Bahamas-based firm called Progressive Management Ltd., a business that he alleges was nothing more than a "corporate shell."

"It's a Ponzi scheme in the sense that the defendant company did not conduct any business," Rothman told CTV Montreal on Friday.

"It had no tangible assets. It had no staff. It didn't do anything. It just issued certificates," he alleged.

Rothman's clients in the lawsuits claim that up to 100 investors may have lost as much as $10 million in their dealings with the offshore firm.

"My office has been inundated with calls, some from victims," since news of the alleged scandal broke on Friday, Rothman told CTV News Channel. "To the best of my knowledge, the victims are primarily Quebecers but I've received some out-of-province calls."

The lawsuits name several financial advisers, all of whom allegedly solicited money from clients, cognizant that the firm wasn't investing in generally recognized securities.
 
None of the allegations have been proven in court.

One of those named in the lawsuits is Lance Townend from Baie d'Urfe, Que. Townend told CTV Montreal the allegations are untrue and that he's hired a lawyer to clear his name.

"I have nothing to say at this time," Townend said.

Investors were allegedly given elaborate certificates of deposit that look similar to those provided by banks and were promised returns as high as 16 per cent.

The lawsuits claim that Progressive Management Ltd. stopped issuing payments in 2005 and sent out letters the following year stating it would resume payments in February 2008.

The payments allegedly never resumed and the two concerned investors were left unable to contact the company.

Two of the financial planners named in the lawsuits are reportedly registered with Quebec's securities regulator, Autorite des marches financiers.

Rothman has also said he believes Quebec's securities regulator isn't doing its job and is often unresponsive.

"When there is an appearance of fraud, you communicate with them - everyone's in a meeting," Rothman said. "Ninety per cent of the time you're speaking to voice mail. Your messages are never returned."

However, Quebec's securities regulator has confirmed it's involved with the lawsuits.
"What we can confirm is we are in fact investigating this file," spokeswoman Cathy Beausejour said. "It is a complex file as it is an offshore company."

Quebec provincial police haven't said whether a criminal investigation is underway.

With files from The Canadian Press