Veteran con artist arrested for ‘large-scale’ investment fraud in Ontario

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

Police in Waterloo, Ontario have arrested 62-year-old David Villanueva after a 14-month investigation. He is facing charges of fraud, making false statements and laundering the proceeds of crime.

Police say they have identified 23 victims from across Ontario who lost a total of more than $1.4 million in what investigators are calling a “large-scale investment fraud.”

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

CBC News also revealed Villanueva’s lengthy criminal history, with six separate convictions for fraud, totaling 17 years in prison.

In the mid-1990s, an Ontario judge compared him to a “vulture” and a “shark” preying on unsuspecting victims. During a prison sentence in the 2010s, a psychologist determined that Villanueva “exhibited the core personality traits of a psychopath.”

Over the past three decades, Villanueva, 62, has claimed to be a boxer, lawyer, marriage counselor and 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 phony law firm. In North Bay, Ontario, he posed as a psychologist. There was a sham bid to buy a minor league baseball team in London, Ontario. And, nearly 20 years ago, another debt-laden factoring company in Halifax.

According to newspaper databases and parole records, Villanueva’s first federal fraud sentence came in 1995 in Sarnia, Ontario, where he worked as an unlicensed paralegal representing injured workers and immigrants in state courts. He pocketed claims that should have been paid to his clients. In sentencing, the presiding judge described Villanueva as a “liar” and a “parasite” and sentenced him to five years in prison.

In 2004, Villanueva was convicted again of fraud in connection with another paralegal firm he and his new wife had set up in Amherst, NS. He avoided prison time and instead received two years of house arrest and an additional three 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 meeting and convincing him to invest $365,000 in a nonexistent factoring company. Later investigations revealed that the money was instead used to set up a call center business — and fund his ostentatious lifestyle.

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

He then resurfaced in Toronto, with a new identity and a new scam. Calling himself David Carter, he claimed to be a Miami attorney. Villanueva set up a law firm in downtown and advertised heavily in the local media. Carter-Herzog, as the firm was called, claimed to specialize in workers’ compensation and immigration cases and took on dozens of clients, charging large retainers. Villanueva, who billed himself as “senior counsel,” hired two real attorneys and several support staff to do the bulk of the work.

The scheme worked for the better part of a year, until clients and creditors began clamoring for the money they were owed and the Law Society of Ontario began investigating the credentials of “David Carter.” Just before Christmas 2007, Carter-Herzog threw a fancy holiday party for his employees, where the boss magnanimously announced that everyone would get 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 next two years, Villanueva was charged, tried and convicted of fraud in North Bay, London, Toronto and Halifax, receiving prison sentences totaling more than 10 years.

He was sent to a federal institution, where he was 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. It is described as a “funny look” at life behind bars and also offers insight into why Villanueva has scammed so many people over the years.

“Contrary to popular belief, it had nothing to do with money or greed,” he wrote. “It was about gaining power … power that I then used to isolate myself from all the ‘normal’ people I saw going about their business every day.”

Waterloo Regional Police say the current investigation is ongoing and are urging other victims to come forward.

You can contact Jonathon Gatehouse by email at [email protected], or through the CBC’s digitally encrypted Securedrop system at https://www.cbc.ca/securedrop/