When news of an investment scam breaks, it’s sometimes easy to tell ourselves, “That could never happen to me.” Yet each year, many Albertans, both experienced and new to investing, are defrauded in seemingly real investment opportunities.
In August 2025, the Alberta Securities Commission (ASC) issued a ruling against Craig Michael Thompson and his companies, Black Box Management Corp. and Invader Management Ltd., for carrying out one of the largest Ponzi schemes in Alberta’s history. Over three-and-a-half years, Thompson invested more than $150 million CAD, and defrauded over 1,000 investors across Alberta and the U.S. of at least US$47 million.
It can be hard to spot the warning signs of an investment scam
It might be easy to think the victims of Thompson’s fraud were risk-takers willing to make high-risk bets for big rewards. But unlike many investment scams that promise quick riches or unrealistic returns, Thompson’s schemes were disguised as a low-risk, professional operations.
So how did Thompson lure people in and keep them deceived? The answer lies in the psychology of trust and the behavioural biases that scammers use to exploit people.
How Ponzi scheme operators use trust to deceive investors
Investment scams aren’t just built on fake documents or false account statements. They are built on stories; stories that feel personal, believable and trustworthy.
In this case, Thompson claimed to have mastered the markets, telling potential investors that he had not experienced a single losing day since 2014. He also used three classic persuasion tactics to draw in investors:
1. Authority: The “expert” who never loses a trade
Thompson positioned himself as an experienced and successful day trader, claiming he had never faced a negative trading day since 2014. He used technical jargon, like “stop-losses”, and produced fake weekly reports detailing his trading wins to make himself sound credible.
Fraudsters often use complex language not only to reinforce expertise and appear knowledgeable, but also to intimidate. This can make investors less likely to ask questions or challenge claims, allowing repeated statements to feel more convincing.
This is called the illusory truth effect: the tendency to accept information as true simply because we hear it repeatedly. Each time Thompson reinforced his “no losing days” story through conversations or weekly updates, it became more credible.
CheckFirst tip: Confident claims and repeated tales of success don’t tell the full story or replace legitimate qualifications and industry registration. Instead of relying on repetition or reputation, do your own research and look for verified information. Always ensure that the person you are working with is registered to sell investments with a provincial securities commission before you invest.
2. Social proof: Everyone else is “making money”
Many Black Box investors heard about the opportunity through friends, colleagues or family members who, based on reports, believed that their own investments were growing. In reality, Thompson generated fake reports for early investors that showed steady returns, which they shared with others, unknowingly helping spread his scheme.
It is human nature to follow the actions of the group. When others around us seem to be having success, it can feel reassuring and safe to follow their lead. Scammers know this and take advantage of psychological biases like herding behaviour or the fear of missing out (FOMO). They use this to manipulate trust between groups to create the illusion of legitimacy.
CheckFirst tip: If someone you know, even a friend or family member, recommends an investment or a person to work with, take a step back and verify the details for yourself. Again, independent research and registration checks are your best defence against fraud.
3. Illusion of control: “Don’t worry, you can withdraw your money anytime”
Thompson also offered investors a sense of control. They were told they could withdraw money at any time, which many investors did, making the opportunity feel flexible and low risk. Supported by fake weekly reports that showed two to three per cent “profits”, Thompson reinforced that illusion of safety.
But real markets don’t work that way. Returns fluctuate. No-risk and consistent positive returns aren’t just unlikely, they are unreal. If you’re being shown a steady gain every week regardless of what’s happening in the economy, that’s a sign that something isn’t real.
CheckFirst tip: Legitimate investing involves volatility. Be cautious of anyone who promises smooth, guaranteed growth or no down weeks. Start by understanding investment risk.
How the Black Box Ponzi scheme collapsed
Like all Ponzi schemes, Black Box relied on a steady flow of money from new investors to pay earlier ones, until the scheme eventually unravelled.
By the fall of 2023, the scheme collapsed, leaving more than 1,000 investors with significant losses. Of the roughly $150 million raised, Thompson lost at least US$47 million. The rest was used to pay earlier investors, lost through trading, transferred to other entities, or diverted for Thompson’s personal benefit.
When concerns were raised by investors and their financial institutions, the ASC acted quickly to investigate and freeze accounts.
“When we received a call from a financial institution raising concerns about a potential Ponzi scheme in one of their client accounts, we took immediate action to have those accounts frozen and issue interim orders,” said Cynthia Campbell, the ASC’s Director of Enforcement, speaking to the media. “At that point, only about US$300,000 remained. It appears all of the other funds were gone.”
Thompson and his companies admitted to trading securities and defrauding investors. As part of a settlement agreement in August 2025, they were sanctioned and ordered to pay nearly $9 million to the ASC.
How to protect yourself from investment scams
Even the most seasoned investor can be manipulated by a story that feels personal. The best way to protect yourself is to slow down and ask questions before you hand over your hard-earned money:
- Pause before you invest. Fraudsters rely on urgency. Take your time to evaluate.
- Check registration. Use CheckFirst.ca to see if the person and/or company is registered to sell investments.
- Ask questions. If you can’t clearly understand the investment opportunity or identify the risks — it’s time to step back.
- Expect fluctuations. Legitimate investments rise and fall. Guaranteed or always positive returns don’t exist.
- Seek a second opinion. Talk to a registered financial professional or a third party before making big investment decisions.
Doubt alone isn’t the only way to keep you and your money secure. Before you invest, do your own thorough research. Ask questions, and verify information against publicly available and trusted sources. When it comes to your money, the smartest move you can make is to CheckFirst.
