Salim Damji
Encyclopedia
Salim Damji is a convicted fraud
artist who defrauded millions of dollars in an affinity fraud
. The money came mostly from relatives and members of the close-knit Ismaili
community
. His $75 million scam was among the largest in Canadian history.
Salim Damji claims to have met extortion
ists in Miami, who threatened to kill him and his family if they did not comply with his demands. According to Damji, these individuals forced him to defraud thousands of community members. However, the judge in Damji's case did not believe this story. Had he done so, Damji may have been found not criminally responsible for his actions (see duress
).
Damji later purported to own a company called Strategic Trading Systems (STS), and that he had invented a product called Instant White- a tooth whitening spray. While the product itself was real, it was not actually invented or owned by Damji. Salim Damji went so far as to fly to New York
to discuss buying the company that owned Instant White; but this deal was never materialized.
Damji also claimed to be a dentist
, although he in fact never graduated from university.
Salim Damji collected what is estimated to be over 78 million dollars http://www.afarber.com/corporate/studies.html#white in the scam. Investors were told that they were being given first priority since they were members of the community and/or relatives of Damji. They were promised to receive 20-to-1 returns after the company was sold to Colgate-Palmolive
. Colgate denied any involvement with STS, but this did not stop many investors from continuing to pour money into the scheme— an estimated 45-million dollars were raised after Colgate denied involvement with STS. It is worth noting that Damji returned investors money upon request, which did a great deal to establish trust between him and the community.
Salim Damji continued this fraud over a period of two years, promising the 20-to-1 returns at the end of this time period. Some investors were told to send their money by wire
to "Montanas Magicas", which was eventually discovered to be related to an internet gambling site. A total of $8.5 million was wired directly to Montanas Magicas.
In the mean time, Damji claimed to be getting small payments from Colgate, which he used to support his decadent lifestyle. He purchased an $800,000 condominium
near Toronto
's waterfront, two houses in Markham
, a strip mall
in Toronto, and nine luxury car
s. Damji also pledged 1.5 million dollars to the Aga Khan Foundation
.
By the end of the fraud, Damji claimed to have the money, and that it would be split up among investors. Shortly before this was allegedly going to take place, Damji was arrested, and investors were informed of the scam upon arriving to collect their money.
Salim Damji was arrested on May 25, 2005 at approximately 2:00 p.m. for violating terms of his parole. The National Parole Board (Canada) has not released details on the terms that were violated, but according to the IRG (Investment Recovery Group)http://www.globalenviro.com/IRG/public_html/article.php?story=20050830140950404&mode=print , his term has been extended through November 27, 2007.
community. This is partially because investors were told that they were being given priority over others as a result of being members of his community. He also returned investors' money upon request. His donation of 1.5 million also made waves within the community. Some believe that the fraud has broken a great deal of trust that was once present within the community.
Zahra Damji (formerly Zahra Lavji) divorced Salim Damji shortly after the fraud was exposed, and indicated that she did not believe her former husband did not know where the money was when she told CTV
that "if you're smart enough to do this, I don't think you're dumb enough to lose it all."http://www.gambling911.com/Instant-White-Toothpaste-Scam.html
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
artist who defrauded millions of dollars in an affinity fraud
Affinity fraud
Affinity fraud includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities, language minorities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group...
. The money came mostly from relatives and members of the close-knit Ismaili
Ismaili
' is a branch of Shia Islam. It is the second largest branch of Shia Islam, after the Twelvers...
community
Community
The term community has two distinct meanings:*a group of interacting people, possibly living in close proximity, and often refers to a group that shares some common values, and is attributed with social cohesion within a shared geographical location, generally in social units larger than a household...
. His $75 million scam was among the largest in Canadian history.
Salim Damji claims to have met extortion
Extortion
Extortion is a criminal offence which occurs when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime...
ists in Miami, who threatened to kill him and his family if they did not comply with his demands. According to Damji, these individuals forced him to defraud thousands of community members. However, the judge in Damji's case did not believe this story. Had he done so, Damji may have been found not criminally responsible for his actions (see duress
Duress
In jurisprudence, duress or coercion refers to a situation whereby a person performs an act as a result of violence, threat or other pressure against the person. Black's Law Dictionary defines duress as "any unlawful threat or coercion used... to induce another to act [or not act] in a manner...
).
Damji later purported to own a company called Strategic Trading Systems (STS), and that he had invented a product called Instant White- a tooth whitening spray. While the product itself was real, it was not actually invented or owned by Damji. Salim Damji went so far as to fly to New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
to discuss buying the company that owned Instant White; but this deal was never materialized.
Damji also claimed to be a dentist
Dentist
A dentist, also known as a 'dental surgeon', is a doctor that specializes in the diagnosis, prevention, and treatment of diseases and conditions of the oral cavity. The dentist's supporting team aides in providing oral health services...
, although he in fact never graduated from university.
Salim Damji collected what is estimated to be over 78 million dollars http://www.afarber.com/corporate/studies.html#white in the scam. Investors were told that they were being given first priority since they were members of the community and/or relatives of Damji. They were promised to receive 20-to-1 returns after the company was sold to Colgate-Palmolive
Colgate-Palmolive
Colgate-Palmolive Company is an American diversified multinational corporation focused on the production, distribution and provision of household, health care and personal products, such as soaps, detergents, and oral hygiene products . Under its "Hill's" brand, it is also a manufacturer of...
. Colgate denied any involvement with STS, but this did not stop many investors from continuing to pour money into the scheme— an estimated 45-million dollars were raised after Colgate denied involvement with STS. It is worth noting that Damji returned investors money upon request, which did a great deal to establish trust between him and the community.
Salim Damji continued this fraud over a period of two years, promising the 20-to-1 returns at the end of this time period. Some investors were told to send their money by wire
Wire
A wire is a single, usually cylindrical, flexible strand or rod of metal. Wires are used to bear mechanical loads and to carry electricity and telecommunications signals. Wire is commonly formed by drawing the metal through a hole in a die or draw plate. Standard sizes are determined by various...
to "Montanas Magicas", which was eventually discovered to be related to an internet gambling site. A total of $8.5 million was wired directly to Montanas Magicas.
In the mean time, Damji claimed to be getting small payments from Colgate, which he used to support his decadent lifestyle. He purchased an $800,000 condominium
Condominium
A condominium, or condo, is the form of housing tenure and other real property where a specified part of a piece of real estate is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights...
near Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...
's waterfront, two houses in Markham
Markham, Ontario
Markham is a town in the Regional Municipality of York, located within the Greater Toronto Area of Southern Ontario, Canada. The population was 261,573 at the 2006 Canadian census...
, a strip mall
Strip mall
A strip mall is an open-area shopping center where the stores are arranged in a row, with a sidewalk in front. Strip malls are typically developed as a unit and have large parking lots in front...
in Toronto, and nine luxury car
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
s. Damji also pledged 1.5 million dollars to the Aga Khan Foundation
Aga Khan Foundation
The Aga Khan Foundation is a private, not-for-profit international development agency, which was founded in 1967 by . AKF seeks to provide long-term solutions to problems of poverty, hunger, illiteracy and ill health in the poorest parts of South and Central Asia, Eastern and Western Africa, and...
.
By the end of the fraud, Damji claimed to have the money, and that it would be split up among investors. Shortly before this was allegedly going to take place, Damji was arrested, and investors were informed of the scam upon arriving to collect their money.
Salim Damji was arrested on May 25, 2005 at approximately 2:00 p.m. for violating terms of his parole. The National Parole Board (Canada) has not released details on the terms that were violated, but according to the IRG (Investment Recovery Group)http://www.globalenviro.com/IRG/public_html/article.php?story=20050830140950404&mode=print , his term has been extended through November 27, 2007.
Impact on the Ismaili community and relatives
Salim Damji had a fairly high level of trust in the IsmailiIsmaili
' is a branch of Shia Islam. It is the second largest branch of Shia Islam, after the Twelvers...
community. This is partially because investors were told that they were being given priority over others as a result of being members of his community. He also returned investors' money upon request. His donation of 1.5 million also made waves within the community. Some believe that the fraud has broken a great deal of trust that was once present within the community.
Zahra Damji (formerly Zahra Lavji) divorced Salim Damji shortly after the fraud was exposed, and indicated that she did not believe her former husband did not know where the money was when she told CTV
CTV television network
CTV Television Network is a Canadian English language television network and is owned by Bell Media. It is Canada's largest privately-owned network, and has consistently placed as Canada's top-rated network in total viewers and in key demographics since 2002, after several years trailing the rival...
that "if you're smart enough to do this, I don't think you're dumb enough to lose it all."http://www.gambling911.com/Instant-White-Toothpaste-Scam.html