Veteran con man arrested over 'large scale' Ontario investment fraud

A convicted con man with a decades-long record of fraud is facing new charges in connection with an alleged Ontario Ponzi scheme.

Police in Waterloo, Ont., have arrested David Villanueva, 62, after a 14-month investigation, charging him with fraud, making false statements, and laundering the proceeds of crime.

Police say they identified 23 victims from across Ontario, whose losses totalled more than $1.4 million in what detectives are calling a "large-scale investment fraud."

An October CBC News investigation detailed complaints about Villanueva and his Kitchener-Waterloo based firm, The Factoring Collective. The company  — which claimed to buy up struggling companies' accounts receivables at a discount, then collect on them in full — abruptly shut down in early 2023, leaving behind a trail of angry investors who claimed they were collectively owed millions. 

CBC News also uncovered Villanueva's lengthy criminal past — six separate fraud convictions, with jail sentences totalling 17 years. 

WATCH | The 30-year trail of deceit left by David Villanueva:

In the mid-1990s, an Ontario judge likened him to a "vulture" and "shark" who preyed on unwary victims. During a prison stint in the 2010s, a psychologist determined Villanueva "exhibited the core personality traits of a psychopath."

Over the past three decades, Villanueva, 62, has claimed to be a boxer, lawyer, marriage counsellor and the scion of a wealthy Caribbean oil family. And he has gone by a variety of names, including David Carter, Dr. David Anderson, David Castillo, and David Whitehead.

In Toronto, he was found guilty of running a fake law firm. In North Bay, Ont., he pretended to be a psychologist. There was a sham bid to buy a minor league baseball team in London, Ont. And, almost 20 years ago, another debt-laden factoring business in Halifax.

According to newspaper databases and parole records, Villanueva's first federal fraud sentence was handed down in Sarnia, Ont., in 1995, where he had been operating as an unlicensed paralegal, representing injured workers and immigrants before government tribunals. Claims that should have been paid out to his clients ended up in his pocket instead. At sentencing, the presiding judge described Villanueva as a "liar" and "parasite," and handed him five years in jail.

In 2004, Villanueva was again convicted of fraud in connection with another paralegal firm that he and his new wife had set up in Amherst, N.S. He avoided jail time, and was sentenced instead to two years of house arrest and three more years of parole.

The restrictions had little effect. Within a year, Villanueva was back on the prowl, befriending a retired Halifax plumber at a church social and convincing him to invest $365,000 in a non-existent factoring business. Subsequent investigations determined the money was used instead to establish a call centre company — and underwrite his flashy lifestyle.

Villaneuva fled Nova Scotia in the summer of 2006, leaving behind more than 40 employees owed weeks of wages, as well as a string of angry creditors. 

He then resurfaced in Toronto, with a new identity and a new scam. Calling himself David Carter, and claiming to be a Miami-based lawyer, Villanueva set up a downtown law firm, advertising heavily in the local media. Carter-Herzog, as it was known, purported to be specialists in workers' compensation and immigration matters, and took on dozens of clients, charging large retainers. Villanueva, who billed himself as "senior counsel," hired two actual lawyers, and several support staff, to do the bulk of the work. 

The scheme succeeded for the better part of a year, until clients and creditors started clamouring for the money they were owed and Ontario's Law Society began to look into "David Carter's" credentials. Just before Christmas 2007, Carter-Herzog threw a fancy holiday party for its employees, where the boss magnanimously announced that everyone was getting an extra week of paid vacation between Christmas and New Year's. When they returned in early 2008, the offices were closed, and Villanueva was nowhere to be found.

Over the following two years, Villanueva was charged, tried and convicted for the frauds in North Bay, London, Toronto and Halifax, receiving jail sentences totalling more than 10 years.

Sent to a federal institution, he kept busy writing a book. How Prison Really Works: An Idiot's Guide to Surviving a Prison Sentence was self-published as an e-book in 2016. Billed as a "tongue-in-cheek look" at life behind bars, it also offers some insight into why Villanueva had defrauded so many people over the years.

"Contrary to what many people think, it had nothing to do with money or greed," he wrote. "It was about gaining power … power which I would then use to insulate myself from all the 'normal' people I saw going about their business every day."

Waterloo Regional Police say their current investigation remains open, and are appealing for other victims to come forward. 

Jonathon Gatehouse can be contacted via email at jonathon.gatehouse@cbc.ca, or reached via the CBC's digitally encrypted Securedrop system at https://www.cbc.ca/securedrop/