The businessman is one of two new names facing charges in the U.S. after four Canadians previously pleaded guilty for a $21M investing swindle
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U.S. authorities allege a Toronto gem broker, whose company claims to be Canada’s largest wholesaler of coloured diamonds, was the silent partner behind a diamond investment fraud that swindled more than $21 million from hundreds of victims.
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Two known founders of Paragon International Wealth Management, Inc., which bilked customers in high-pressure sales calls from 2013 until it was raided by Toronto police in 2018, have already pleaded guilty to fraud in Cleveland, Ohio, along with two Paragon salesmen who spun victims with lies and false promises. All four admitted their roles in a rapacious cross-border fraud last year.
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During the Toronto police investigation, however, another person who went uncharged and publicly unnamed was suspected of supplying the scammers with the diamonds used in their fraud, along with bogus valuation certificates to make the gems seem much more valuable than they were.
An indictment recently unsealed in U.S. federal court in Cleveland now alleges the scammers’ gem supplier was also a secret founding partner in Paragon, providing start-up capital and reaping one-third of the profits.
U.S. authorities alleged he is Ravi Poddar, a 45-year-old Mississauga, Ont., man.
Key to the large investment swindle, the indictment alleges, were three companies Poddar has an ownership stake or influence in: Byrex Gems, Ritchies Auctioneers and Saxon Kruss appraisers.
The indictment spells Poddar’s last name with one letter D, but justice officials in the United States and Canada confirmed the accused is the same man better known with his last name spelled Poddar.
Poddar said the accusations are false.
“Mr. Poddar will vigorously defend his innocence against these false accusations and asks that people not rush to judgment without hearing all of the evidence in this matter,” Toronto lawyer Daniel Brown said on Poddar’s behalf after the businessman was contacted by National Post.
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The great Paragon swindle, and the crime-filled life of Jack Kronis, one of its notorious Toronto fraudsters, was the focus of a long investigative feature by National Post last summer called Jack of Diamonds.
“The object of the conspiracy was for the defendants, co-conspirators, and others associated with Paragon to enrich themselves by persuading customers to invest in colored diamonds or other jewelry by providing customers with false or misleading information,” the new indictment alleges.
“Podar, through a company called Byrex, would supply Paragon with the diamonds that Paragon sold to customers. Podar regularly requested and received money from Paragon, which Paragon obtained from customers during the scheme.”
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The diamond investment scheme, revealed in previous Paragon court cases, used salesmen’s aggressive lies and bogus online auctions to pretend gems they sold victims were being resold for great profit. The new indictment alleges the “largely fabricated” auctions were managed by Ritchies Auctioneers. Poddar was one of two men who announced buying Ritchies, a storied Canadian auction house, out of bankruptcy in 2011.
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“Paragon also sent customers appraisal certificates from a business named Saxon Kruss, which was controlled by Podar and fraudulently inflated the value of the colored diamonds that the customers purportedly owned,” the indictment says. “Podar would arrange for the Saxon Kruss appraisal certificates to have fraudulently inflated values,” it alleges.
Two Toronto-based founders of Paragon have already pleaded guilty in the United States to fraud.
James Gagliardini, who used the alias John Moore when talking to victims, was sentenced to 56 months in a U.S. prison in October. Michael Shumak, who used the alias Michael King, has not yet been sentenced.
The new indictment alleges that a series of text messages between Poddar and Gagliardini reveal their relationship, and seem to show Gagliardini in a subservient position to Poddar.
“Send $$$$$, I am in a big hole,” says a text message allegedly from Poddar in 2015; Gagliardini replied “Ok.” Another text to Gagliardini says, “Start adding about 4% to the jewellery budget to pay Ritchies.” Gagliardini again replied “Ok.” Poddar then allegedly texted: “Delete all messages.”
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“Send funds. I need $540,000 to pay a bill,” says a text to Gagliardini allegedly from Poddar in February 2016, and, two months later, Poddar allegedly sent another: “I don’t want to sound obnoxious, but I need you to send funds.”
“I will get that done today,” came the reply.
In June, Poddar allegedly texted Gagliardini: “How’s it looking for the (bag of money emoji)?” Gagliardini allegedly replied: “As you know, we are sending you roughly a third of what comes in every week… I would love to send You 100k that would mean we brought in 300k… We are working on it.”
“Don’t send me such texts,” Poddar allegedly sent back.
Another exchange allegedly shows Poddar agreeing to change the amount on a valuation certificate — doubling it — to help Paragon sell a gem.
Salesmen in Paragon’s Finch Avenue West boiler room, court documents say, used tricks and lies to persuade victims that more money was constantly needed to push their initial investment towards a huge payday — a promised jackpot that never came — with smooth talking salesmen explaining why customers couldn’t get their money just yet.
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During court hearings for Gagliardini, Shumak, Kronis, and another salesman, Antonio Palazzolo, prosecutors say they tracked down about 200 Paragon victims.
Named alongside Poddar in the new indictment is Edward Rosenberg, who allegedly used the alias Ed Rose when working as a salesman at Paragon.
It was Rosenberg who inadvertently triggered the unsealing of the indictment.
Last month, Rosenberg was travelling to the United States for a day trip with a friend to Buffalo when he was arrested on the New York side of the border crossing, according to his Toronto lawyer, Mitchell Worsoff.
Rosenberg, 59, was among those originally charged by Toronto police with fraud in 2018 for the Paragon swindles but charges against all of them were halted in Ontario when the case was turned over to the U.S. Department of Justice to prosecute. (Most victims were American.)
While U.S. prosecutors proceeded with charges against Gagliardini, Shumak, Kronis and Palazzolo — who had all agreed to plead guilty — Rosenberg did not agree to plead guilty. After a voluntary interview with the FBI in Cleveland in 2022, Rosenberg returned to Canada without charge or restriction, Worsoff said.
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Rosenberg did have a previous fraud conviction in Canada from a 2017 arrest from a different jewel sales job, but Worsoff said his client was unaware that U.S. authorities maintained any interest in him for the Paragon case.
In the afternoon of Dec. 6, 2024, just before crossing to New York, Rosenberg called Worsoff. He was concerned he might be questioned at the border about his old fraud conviction in Ontario. He wanted to know if his lawyer would be available if needed. He said he would call when he was across, Worsoff told National Post.
Hours later, Worsoff still hadn’t heard from him, and he couldn’t reach him.
“I figured something was wrong,” Worsoff said. He found out his client had been arrested at the border and sent to Cleveland. Rosenberg is still there, in a detention facility.
U.S. court documents show he was transferred from the Western district of New York to the Northern district of Ohio on Dec. 9 — which was the day the indictment against Podder and Rosenberg was unsealed.
“On this matter with Paragon, Eddie was a mere salesman. He wasn’t a directing mind in the company, nor was he making managerial decisions,” Worsoff said of Rosenberg.
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“He was following orders from the top to sell jewels to people who may be interested in buying. (He was) given a bunch of leads of people who are prospective buyers. The jewels were legitimate. They weren’t fake. He didn’t provide any documents to people saying these jewels are worth more than they really are.” Worsoff said Rosenberg was told what to sell the jewels for by his bosses at Paragon.
Toronto Det.-Const. Kevin Williams, the lead investigator of the Paragon diamond fraud case in Canada, said he was pleased to see prosecutors in the United States continue with indictments in the case.
“I’m just glad that they are going to be held accountable,” Williams said.
The FBI declined to comment.
• Email: ahumphreys@postmedia.com | X: AD_Humphreys
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