A southern Alberta man is accused of playing a key role in a "gifting circle" pyramid scheme that could involve million of dollars and hundreds of people in Alberta, B.C. and Saskatchewan.

Steele Cameron Tolman, who is from just east of Lethbridge in Coaldale, faces one count each of fraud over $5,000 and possession of the proceeds of crime over $5,000.

Police allege Tolman, 57, is the "main presenter" in the scam.

Investigation by members of the force's economic crimes unit found that between September 2018 and May 2019, "gifting circles" were introduced in Lethbridge, Calgary and Edmonton.

"The scheme promises 'no risk' and guarantees a 'gift' of $5,000 will result in a return of $40,000," Lethbridge Police said in a news release issued Monday.

"Once funds have been paid, the person is then responsible for recruiting two more people to 'gift' money. This model requires the recruitment of new members to pay for existing members and eventually leads to a loss of funds by those who have paid in when new recruits cannot be found."

Potential losses of $2M

Police say witnesses have come forward claiming there are more than 500 members and 80 "gifting circles" operating, reaching into B.C. and Saskatchewan.

"With these numbers, the losses involved would total $2,000,000," according to the release.

Tolman is scheduled to appear in court on May 17.

Anyone with information on gifting circles are asked to contact police.