January 17, 2017

MSC warns Manitobans to beware of ‘Stripping’ scams.

Winnipeg -
The Manitoba Securities Commission (MSC) is warning the public to think twice before getting involved in RRSP ‘Stripping’ scams—complex schemes often touted as a sound investment strategy through ‘exclusive’ seminars or books. The MSC is aware of an upcoming seminar in Winnipeg which raises a number of associated red flags. Taking place in Winnipeg on Saturday, Jan. 21, this seminar features a Toronto-based presenter who is under cease trade orders in Ontario and Manitoba, and is currently charged with securities offences in Ontario.  

“Stripping” scams involve withdrawing funds from a locked-in RRSP or RRIF at the direction of a promoter. The funds are then used to purchase shares in a company or real estate at the direction of the promoter. The promoter retains a percentage as his or her ‘fee.’ These new shares, (actually worth little or nothing) are deposited back into the RRSP at an inflated price. The remaining portions of the original funds are sometimes directed back to the consumer via a loan, credit card, or offshore account.

While the plan may appear legitimate, Canada Revenue Agency has in the past considered this a form of tax avoidance and has little tolerance for participants. In previous rulings, CRA does not consider this a “qualified investment” under the Income Tax Act, (although the promoter may have a lawyer or accountant ‘certify’ it is), and may tax suspect transactions for their full value at a 100 per cent rate.

“The name of the game changes, but the end result is the same,” says Jason Roy, senior investigator at MSC. “In a stripping scam, the consumer is often left with their retirement savings gone, in addition to a hefty tax bill—and usually penalties—from CRA.”

On Saturday, Jan. 21, at 9 a.m., a Winnipeg seminar on “How to Invest Your Retirement Money in Real Estate,” features guest speaker Sunil Tulsiani.

Tulsiani has been permanently barred from selling securities in Manitoba and Ontario for repeated securities violations, and what the Ontario Securities Commission (OSC) has called “egregious and dishonest” behaviour for his part in a multi-million dollar Ponzi scheme. Tulsiani and his firm have been investigated and charged by OSC’s Joint Serious Offences Team (JSOT) an enforcement partnership between the OSC, the Royal Canadian Mounted Police Financial Crime Section and the Ontario Provincial Police Anti-Rackets Branch.

“We are very concerned about the nature of the seminar taking place this Saturday,” says Roy. “Withdrawing funds from a registered retirement account to fund real estate or securities purchases is one of the hallmarks of an RRSP stripping scam.”

The Manitoba Securities Commission is a division of the Manitoba Financial Services Agency, a Special Operating Agency of the Government of Manitoba that protects investors and promotes fair and efficient capital markets throughout the province.


Media Inquiries:                   

Jason Booth, Communications Coordinator  |  (w) 204.945.1660 | 


CRA Compliance Bulletin – 4, July 2016
“…pursuant to section 148 of the Act, TULSIANI INVESTMENTS and Sunil Tulsiani cease trading in securities permanently.”