Canadian Fraud Law

Canadian Fraud Law

Commentary, News and Updates

Michael Nowina

Michael Nowina

Michael Nowina’s litigation practice focuses on a broad range of commercial disputes including advising on the recovery from fraudulent investment schemes, mortgage fraud and credit fraud. Michael’s fraud-related and investigations experience includes representing victims of a Canada-wide investment fraud and ultimately securing recovery of a majority of the proceeds from the fraud, advising numerous creditors in proceedings commenced to recover fraudulent conveyances and preferential payments in multi-jurisdictional litigation, and representing financial institutions in identity fraud cases and in proceedings to recover funds from fraudulent borrowers. Michael also frequently advises clients on insolvency matters involving fraud.

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Fraudulent Conveyance Claim flounders on procedural shores

Posted in Fraud and Insolvency Law, Fraud Recovery
In Esfahani v. Samimi, 2018 ONCA 516  the Ontario Court of Appeal confirmed that a plaintiff pursuing a fraudulent conveyance or preference must recognize that the legal landscapes changes with a bankruptcy and that the effects of a bankruptcy filing cannot be ignored. The unfortunate outcome for the plaintiff, Djalaleddin Esfahani (“Esfahani“), was that an… Continue Reading

Double Jeopardy Argument fails for the Magic Lady

Posted in Investment Fraud
Dubbed the ‘Magic Lady’ by the media for perpetrating a $100 million Ponzi scheme, Rashida Samji faced administrative proceeding brought by the BC Securities Commission (“Commission”) as well as criminal charges. The Commission found in 2014 that she perpetrated a fraud, imposing a disgorgement order of almost $11 million and a $33 million administrative monetary… Continue Reading

Mareva Injunctions – Ontario Court of Appeal Signals a More Flexible Test for Granting Worldwide Mareva Injunctions

Posted in Injunctions & Emergency Relief
The decision in SFC Litigation Trust (Trustee of) v. Chan, 2017 ONSC 1815 represents a step toward a more flexible approach when our courts are asked to consider whether a Mareva injunction should be granted. In this case, the appellant, Mr. Chan, the former Chief Executive Officer of Sino-Forest Corporation (“SFC”), appealed an order confirming a… Continue Reading

Court rules “culpability is not a finite” in charitable donation scheme

Posted in Fraud Prevention
According to Statistics Canada, 84% of Canadians aged 15 and over, or just under 24 million people, reported making at least one financial donation to a charitable or non-profit organization when the last survey on gift giving was conducted in 2010. With over $10 billion in yearly donations, it is unsurprising that there are those that… Continue Reading

Courts give the green light for fraud-based class actions in Canadian insolvency proceedings

Posted in Fraud and Insolvency Law
Both of Canada’s primary insolvency statutes, the Bankruptcy and Insolvency Act (“BIA”) and the Companies’ Creditors Arrangement Act (“CCAA”) provide for an automatic stay of all legal proceedings when an insolvent debtor files for or seeks insolvency protection. The purpose of the stay is to provide breathing space to a debtor attempting to restructure its… Continue Reading

2016 Baker & McKenzie Global Data Breach Notification Guide

Posted in Cybersecurity
Global data breach notification requirements pose critical issues for legal departments, senior managers, and boards of companies in all industry sectors worldwide. The current environment creates a perfect storm with more data security threats, more vulnerabilities, and more data breach notification requirements. Baker & McKenzie provides this Global Data Breach Notification Guide as a resource… Continue Reading

“Magic Lady” fails in Constitutional Challenge

Posted in Investment Fraud
On May 26, 2016, the British Columbia Provincial Court dismissed Rashida Samji’s request for a stay of criminal fraud charges in R v. Samji.  The British Columbia Securities Commission had previously levied an Administrative Monetary Penalty (“AMP”) of $33 million against Samji, in relation to what the British Columbia Securities Commission found was a $100… Continue Reading

Court of Appeal upholds trial decision awarding HSBC judgments in fraud for over $10.3 million

Posted in Fraud and Insolvency Law
In Turbo Logistics Canada Inc. v. HSBC Bank Canada, Baker & McKenzie’s litigation team was successful in upholding at the Ontario Court of Appeal, the trial decision awarding HSBC judgments in fraud for over $10.3 million dollars. At trial, Madam Justice Ruth Mesbur accepted the argument that “but for” the false statements made by the… Continue Reading

Bankrupt’s right to assert solicitor-client privilege is not absolute

Posted in Fraud and Insolvency Law
In Wong v. Luu, the British Columbia Court of Appeal upheld an order requiring the production of a redacted trust ledger to the bankruptcy trustees for Luu Hung Viet Derrick (“Luu”) on the grounds that the trust ledger was not presumptively privileged and that production would not violate the bankrupt’s right to communicate in confidence… Continue Reading

Ontario’s Highest Court affirms the concept of Investigative Receiverships, but with note of caution

Posted in Fraud and Insolvency Law
In Akagi v. Synergy Group (2000) Inc. (“Akagi“), the Ontario Court of Appeal set aside a series of ex parte orders made by Toronto’s Commercial List Court granting broad investigative powers to a court-appointed receiver.  The receiver had been empowered under section 101 of the Courts of Justice Act which gives the court powers to make… Continue Reading

Disgorgement Remedy: Recent Developments in the Province of Ontario

Posted in Fraud Recovery
On May 5, 2014, Ontario’s Divisional Court dismissed the appeal of Otto Spork, Konstantinos Ekonomidis, and Natalie Spork from the decision of the Ontario Securities Commission (“OSC”) that they had breached Ontario’s securities law and engaged in conduct contrary to the public interest. Otto Spork, Konstantinos Ekonomidis, and Natalie Spork were  ordered to disgorge $6.75… Continue Reading

Guilty verdicts delivered in one of Canada’s largest ponzi schemes

Posted in Investment Fraud
In a previous post, we reported on a then-ongoing Calgary trial involving an alleged $300 million Ponzi scheme affecting as many as 2,000 people, many of them Canadian.  The fraud represents one of the largest Ponzi schemes in Canadian history.  The accused individuals had already been sanctioned by the U.S. Securities and Exchange Commission and… Continue Reading

Final Arguments nearing end in trial of one the largest alleged Ponzi schemes in Canadian history

Posted in Investment Fraud
A Calgary trial is nearing conclusion on criminal charges against Gary Allen Sorenson (“Sorenson”) and Milowe Brost (“Brost”) relating to an alleged $300 million Ponzi scheme that operated between 1999 to 2008 with money from thousands of investors across the United States and Canada. The alleged scheme was orchestrated utilizing the sale of promissory notes… Continue Reading

‘Magic Lady’ ordered to pay $43 million for running Ponzi scheme in British Columbia

Posted in Investment Fraud
A panel of the British Columbia Securities Commission has imposed an administrative penalty of $33 million against Rashida Samji for committing a $100 million fraud on at least 200 investors in its recent sanction decision. The scheme which the panel determined was a Ponzi scheme earned her the nickname the ‘magic lady’. The panel also… Continue Reading

Imprisonment for Ponzi Schemes: How long is long enough?

Posted in Fraud Prevention, Fraud Recovery
Under section 380.1(1) and (1.1) of the Criminal Code, courts are required to consider the following non-exhaustive list of factors as being aggravating circumstances in the context of fraud: significant magnitude, complexity, duration or degree of planning of the fraud; an actual or potential adverse effect on the Canadian economy or financial system, or on… Continue Reading

RCMP arrest six in alleged investment fraud

Posted in Investment Fraud
The RCMP’s Greater Toronto Area Financial Crime team has arrested and charged six people in an alleged fraudulent investment scheme. The RCMP has reported that the alleged fraud worked by enticing investors to purchase business tax losses valued far in excess of their investments. The companies used by the accused included: Integrated Business Concepts (IBC),… Continue Reading

Commercial List fraud trial ends with $10.3 million win for HSBC

Posted in Fraud Recovery
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… Continue Reading

‘Magic Lady’ in British Columbia faces criminal charges related to alleged ponzi scheme

Posted in Investment Fraud
Vancouver resident Rashida Samji, 60, was arrested after an investigation by RCMP Federal Serious and Organized Crime Unit and Vancouver Police uncovered a scheme potentially stretching back to 2003. She earned the nickname “magic lady” from a seperate investigation run by the B.C. Securities Commission in which it is alleged that Samji took in more than… Continue Reading

Investment manager gets two-year prison term for fraud

Posted in Fraud Recovery, Investment Fraud
The Globe and Mail reported on the sentencing of investment manager Terrence Bedford who received a sentence of two years in prison after he was found guilty of running a fraudulent trading scheme that cost investors millions. Mr. Bedford ran Hamilton-based Greyhawk Equity Partners LP, and was accused of telling investors he was operating a highly… Continue Reading

Documents uncovered during fraud investigations

Posted in Investigations & Compliance, Investment Fraud
SA Capital Growth Corp. v. Mander Estate dealt with the thorny issue of whether a court-appointed officer, in this case a Receiver appointed to sell the assets of an insolvent entity, had a legal obligation to disclose information that it had obtained to an individual who was facing serious allegations under Ontario’s Securities Act. Justice… Continue Reading