The global presence of counterfeit products is an increasingly real problem. The RCMP released an update reporting an increase from CAD $7.7 million in 2005 to CAD $38 million in 2012 in the retail value of counterfeit goods seized. Canada is looking to address this economically damaging and potentially harmful situation through Bill C-8 entitled “Combatting Counterfeit Products Act”. Bill C-8 is a positive step towards combatting the problems associated with counterfeit goods and pirated copies. It will also better align Canada with other nations (such as the EU and US) who have already adopted similar measures.
Continue Reading Combatting counterfeit and pirated goods

In Hryniak v. Mauldin, released January 23, 2014, the Supreme Court of Canada upheld the finding of fraud against Toronto businessman Robert Hyrniak on a summary judgment motion. The unanimous SCC found that a shift in culture is needed to embrace summary judgment motions as an alternative model of adjudicating disputes. The SCC ruled that findings of fraud can be made when the judge is able to reach a fair and just determination on the merits on a summary judgment motion. This will be the case when the motion:

  1. allows the judge to make the necessary findings of fact;
  2. allows the judge to apply the law to the facts; and
  3. is a proportionate, more expeditious and less expensive means to achieve a just result.

In a call to action to improve access to justice, the SCC also called upon lower court judges to take a more active role in case-managing disputes by seizing themselves of cases where they have dismissed a motion for summary judgment. This is a significant departure from current practice. 
Continue Reading Summary judgment for investment fraud upheld by Supreme Court of Canada

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

The Ontario Court of Appeal recently reinstated a lower court’s contempt finding against a lawyer who paid himself $60,000 and returned $440,000 to his client, a financial advisor facing multiple legal proceedings for defrauding his clientele.
Continue Reading Lawyer for financial advisor in fraud case found in contempt by Ontario’s highest court for violating Mareva injunction.

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”…
Continue Reading ‘Magic Lady’ in British Columbia faces criminal charges related to alleged ponzi scheme

Our team acted for one of the parties in Labourers’ Pension Fund of Central and Eastern Canada v. Sino-Forest Corporation, where Justice Morawetz of the Ontario Superior Court of Justice approved Ernst & Young LLP’s $117 million settlement relating to class action lawsuits commenced by jilted investors following the downfall of former stock market darling, Sino-Forest Corporation.  The $9.2B class action involves significant fraud allegations that call into question Sino-Forest’s structure, reporting and revenues, as well as the practices of its auditors and underwriters. In addition to garnering attention as the largest auditor settlement to date in a Canadian securities class action, this landmark decision is noteworthy for the Court’s approval of a comprehensive third-party release and a ‘no opt-out’ settlement feature granted in favour of Ernst & Young.   The Court also approved a controversial framework that would make similar settlements available for  future settling defendants – a feature some critics characterize as extraordinary relief in cases where there are underlying fraud allegations.
Continue Reading Court approves gold-plated releases despite extensive fraud allegations

In Wolf v Anstett, 2012 ONSC 3220, a creditor used section 5 of the Assignment and Preferences Act (the Ontario provincial legislation which may be applied to set aside transactions made by an insolvent person or a “person in contemplation of insolvency”, with an intent to give an unjust preference to a creditor) and Rule 16.08(16) of the Rules of Civil Procedure[i] to halt a would-be fraudster from attempting to thwart a previous judgment by using a newly incorporated entity to receive payments that should have went to the plaintiff.
Continue Reading Attempt to thwart a previous judgment through a related corporate entity found to be preference under the Assignment and Preferences Act

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 Pattillo of the Ontario Superior Court decided that a receiver is generally not required to produce the details of its investigations or the documents in its possession to parties that are inside or outside of the receivership. However, since the accused has the right under s. 7 of the Charter of Rights and Freedoms, to make full answer and defence to a criminal allegation, this right entitled him solely to information that is “likely relevant” to the criminal charges against him.

The Ontario Court of Appeal found that it was inappropriate for the Superior Court to make what amounted to an interim procedural order in relation to a proceeding pending before the Ontario Securities Commission (OSC). As a result, it was left for the OSC to decide whether third party production was appropriate.
Continue Reading Documents uncovered during fraud investigations

In this age of technology, the risk of departing employee theft and fraud has increased substantially. Departing employees are no longer limited to removing printed confidential business information, but can abscond with business information, trade secrets, client contacts, and other similar material using, for example, an external disk drive or an external email account.

How can companies protect themselves from departing employee related theft and fraud?
Continue Reading Departing employee data fraud on the rise