Our litigation team recently secured a $10.3 million judgment in fraud.  On the strength of accounts receivable and appraised assets, HSBC extended loans exceeding $10 million dollars to a trucking company called Turbo Logistics Canada Inc., operated by defendants, George Perlin and Alex Ber.  The trial judge, Justice Mesbur, found that unbeknownst to HSBC, there were two other companies using similar names and reporting the same accounts receivables and appraised assets to TD Canada Trust for loans from that bank.  These two companies were operated by family members of George Perlin and Alex Ber.  Our team secured judgments in fraud against George Perlin and Alex Ber for $10.3 million, as well as judgments for conversion and conspiracy against the two companies and one of the individuals running it.

In a companion action, we also secured a judgment in fraud for $10.3 million against Nenad Subotic, a key participant who had purported to audit Turbo Logistics Canada Inc., and who had delivered these “audited statements” to HSBC over a course of 2 years.  Justice Mesbur found that Subotic was not a bona fide chartered accountant, as he had represented, and the audited statements were in large part  false.

The case is important because the Court accepted that “but for” the false statements made by the defendants, HSBC would never have made the loan and therefore the bank deserved damages equal to 100% of its loss on the loan.

The case was tried before Madame Justice Ruth E. Mesbur on the Commercial List Court in Toronto and is now under appeal by the defendants. One of the grounds for the appeal is that an adjournment should have been granted when the defendants’ trial lawyer was dropped on the eve of the trial for cost reasons. Read the full decision here.