Ex-OPP detective’s ‘Miami Group’ Ponzi scheme targeted exclusive club of police officers, search warrants claim

Larry Renton did business with a handshake and styled himself the boss of the Miami Group," a cutting-edge automatic trading organization with an enticing promise: Give me your money and I will pay you 25 per cent interest from stock market trades.

Everyone will come out quite comfy in the long run," Renton vowed in emails, boasting of his Robotrader" system. Big and affable, he often brought his good buddy investors onto his yacht in Lake Erie to drink beer and talk business.

Cops and civilians in southwestern Ontario mortgaged their homes and bit into their life savings to pony up investments - by cheque, Paypal and even bags of cash. Millions of dollars are unaccounted for. Some victims are too embarrassed to come forward.

In reality, there was no sophisticated market trading scheme, according to police allegations made public by a judge following a Toronto Star court challenge. No Robotrader" as promised. The former OPP sergeant was running a Ponzi scheme" out of his home targeting an exclusive club of police officers, according to police allegations contained in search warrant applications to obtain banking and computer information.

As to the name Miami Group," police have only discovered that Renton liked to visit Florida on vacation.

The OPP, his former employer, is investigating Renton for fraud, the documents say, but no charges have been laid and none of these allegations have been tested in court.

Renton has told the Star he is under counsel direction" not to comment.

Here's the inside story, according to police documents.

The allegations detectives began pursuing last May contain two elements - affinity fraud" and Ponzi scheme." Detectives explain:

Affinity fraud is a type of investment fraud in which a con artist targets members of an identifiable group ... the fraudster either is or pretends to be, a member of the group. Often the fraudster promotes a Ponzi or pyramid scheme."

In this case, the affinity" allegation came because Renton was a police officer for decades, and a popular one who ran the street crime unit and talked about how he would make it big in investing one day. People trusted him.

The phrase Ponzi scheme" hearkens back to Carlo Ponzi and a century-old fraud in Boston. As the Renton warrants explain, a Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors ... (which) generates returns for early investors by acquiring new investors."

Ponzi schemes unravel" when new investors dry up, the police warrants say, since there is, in fact, no legitimate investment scheme. New investors' money is used to make payments to earlier investors.

That's the case the OPP was presented with on May 22, 2020, when a civilian investor walked into its London, Ont., detachment. The civilian was in a sticky situation - he had made money off the scheme, and never told the Canada Revenue Agency. Still, none of the police victims ensnared in the scheme had complained, and he wanted to blow the whistle. Like all victims in the police documents, his name is blacked out under order of Justice Wendy Harris Bentley, who ordered the release of most of the police documents.

The civilian complainant told the desk officer he had given Renton $200,000 in loans" over two years - Renton insisted it always be described as a loan - and he had been getting chunky monthly payments until the pandemic hit. The complainant knew of lots of other investors" - many of them cops ranked sergeant or above. The desk officer called OPP headquarters in Orillia, and the anti-rackets branch was handed the case because of its high-profile nature.

Renton had retired in 2016 with the rank of detective sergeant. In southwestern Ontario, the name Renton is big in policing. Many members of the Renton family, including Larry's two brothers and his son, are or were cops. Brother Anthony retired in early 2020 as the head of the OPP's biker enforcement unit. Brother Bill was a top OPP detective who became chief of the Woodstock city police department and was also now retired. Bill was major case manager in the Victoria (Tori) Stafford murder investigation in 2009, which ended with two first-degree murder convictions. Sources have told the Star that both Anthony and Bill were investors. Sources say Bill lost hundreds of thousands of dollars in the scheme. Neither responded to interview requests.

At Renton's Simcoe, Ont., home on the May evening when the first complaint was made, his wife was panicking, according to witness statements contained in the search warrant documents. She was a hairdresser who ran her business out of the Renton home. Her salon was in the basement; Larry's office was on the main floor.

Larry was nowhere to be found. He had sent a video message that day - I am financially ruined" he said to the camera - to a select group of friends and investors. He said he was going to end his life. Police were alerted and began a search.

There was a mystery back at his home. In his war room on the main floor, he had what he called his robot trading system" - 11 computer monitors displaying market reports and business television news. Renton had explained to investors that he had devised a way to monitor market fluctuations," to make hefty profits on stocks. His system, he explained, was always running. His wife checked and all of the computers were turned off. Renton never did that," his wife told friends and family gathering at the home.

Somebody - the name is blacked out - turned on Renton's computers and had a look at some of the files. He told Renton's wife Renton had lost control." That person took all of Renton's computers to his own residence to have a deeper look.

Meanwhile, the OPP was able to track Renton's phone to a hotel in Brantford. He was taken to a hospital for psychiatric observation that Friday night and later released.

More angry investors showed up at the Renton home over the weekend. Renton's wife told one person she would work four jobs" to pay off her husband's debts. Nearly in tears, according to the warrant papers, Renton's wife wondered, how would they manage."

Another investor showed up and suggested Renton's wife see if she could sign over Renton's 40-foot yacht to make amends." He went back a day later. Renton's wife answered the door and appeared emotionally distraught," the man later told investigators. He took pity on her" when she explained that Renton always had complete control" over their finances.

Somebody else - another blacked-out name - showed up at the Renton home. Hearing that all of Renton's computer hard drives had been taken away by the new visitor to the home, the new arrival became concerned that evidence may now be getting compromised." Still a third person said that he had a close look at Renton's computers and determined the former cop was running a Ponzi scheme."

At some point, at least one of the people with knowledge of the computers offered to co-operate with police. The computer hard drives were returned to the Renton home and two weeks later on June 4, police obtained a search warrant and seized the devices.

(During the court hearing over the then-sealed documents, a Star reporter argued that to properly scrutinize the police investigation, the identities of police officers, including those who were related to Renton, should be revealed. The court has maintained secrecy over all victims' names, along with any description that would identify them. The Star will argue to have these names unsealed in a future hearing.)

OPP detectives assigned to the Renton investigation have interviewed at least 17 victims. Detectives have stated they believe more are out there, including police officers, but some may be reluctant to come forward due to embarrassment.

According to the search warrant documents, Renton's scheme appeared more and more mystifying as detectives dug into it. Police have hired an expert in financial markets to help them understand what he was telling investors.

For example, he told investors that he was able to build an algorithm that works very well on the 15 minute chart where certain parameters are applied." Sources say financial analysts have told police what Renton was saying makes no sense."

He also provided his investors with a schedule defining their expected returns depending on the size of their investment. Kick in $30,000, you earn 16 per cent; $100,000 you earn 21 per cent; $200,000 or above you earn 25 per cent. Find a new investor, Renton said, and you get a five per cent bonus."

Here's how it worked with one investor, according to his complaint. The man gave Renton $100,000 in 2018. Renton told the man he would receive 21 per cent interest, plus a one per cent bonus" for a total of 22 per cent. Renton wrote to the man that he will pay him $1,833 each month. It appears Renton did, according to the documents, until the global pandemic caused new investors to be skittish.

And the way to keep it legal," according to Renton's emails, was for all investors to describe the arrangement as a loan" and not an investment." He pointed out that he was not a licensed trader.

By 2019, Renton was telling his group that he was paying hundreds of thousands of dollars to build a Robotrader" that would do all of the trading for him. Renton did hire a Toronto man to help build a system; that man's connections with Renton are also being investigated by police. Renton told investors his new system would be safer for them. In the meantime, around Christmas 2019 he offered a seasonal basket of stocks" for just $20,000 per investor. He told them his personal profits would pay for his Christmas cruise."

When the pandemic hit in early 2020, Renton did two things, according to the warrant material. First, he asked people to defer their payments from him for a couple of months. He also encouraged new investments, telling them the Coronavirus would be an excellent opportunity for him to exploit market fluctuations."

An investigator with the Ontario Securities Commission was nosing around by this time. Renton wrote to his investors advising them to say he was not trading for them.

This will all blow over in my humble opinion when (the OSC investigator) finds no one is saying that I trade for him," Renton wrote to investors. He also told investors there was no need" to declare any of their income to the CRA.

One of the victims detectives interviewed, a retired OPP officer, appears to have a soft spot for Renton. Trusted him implicitly," the man said, because he had worked with him for years. Renton did not seem to have an extravagant lifestyle, he owned three boats but his house always seemed in need of repair. He drank a bit but did not take drugs. He said he believes Renton's scheme started off legitimately but became too difficult to maintain and evolved into a Ponzi scheme."

Another victim invested $310,000 several years back and by the time the scheme collapsed, he had received $294,000 in monthly payouts. He told investigators he feels guilt" for bringing others in.

The search warrants provide an accounting of the investors. As of last October, detectives had learned of more than $5 million invested, but detectives state they believe there are more victims. The total losses have not been calculated. Some examples are listed in the warrants. One man invested $215,000 recently, and only received $28,000 in payments before the scheme collapsed. Another gave $270,000 and received $170,000 back. Another $86,000 and received nothing back. One man - none of the investment dates are revealed in the documents - gave $270,00 and then confronted Renton, accusing him of running a Ponzi scheme. That man received $234,500 back.

One man invested $1 million, but the warrants do not say how much he was paid back. Another invested $500,000 - no details are provided on that individual either.

The documents state that Renton had in 2019 brought in a local lawyer, not identified, who was at first an investor, but through his connections would help the Miami Group" grow.

(He) is well entrenched in the community of prosperous people," Renton told one investor.

As police continue to investigate, they are hampered by the lack of documentation. Not long before the deal collapsed, Renton emailed investors:

This was a handshake deal between trusted friends and there is not any documentation on it," he writes, adding there will never be a reason to ever lose any sleep."

Kevin Donovan can be reached at 416-312-3503 or kdonovan@thestar.ca