Banco Cruzeiro do Sul SA, Brazil

Financial Institution Management Fraud “The Federal Public Prosecutor's Office in São Paulo denounced on Monday, January 7, 2018, 17 members of a criminal organization that worked on several fronts for the practice of financial-administrative illicit crimes at Banco Cruzeiro do Sul SA…between January 2007 and March 2012.” Subsequently, the bank was liquidated and audits showed "impairment of the institution's economic and financial situation and serious violation of rules issued by the National Monetary Council and the Central Bank." Firm was retained by Counsel on behalf of a Brazilian client who sought confirmation of a tracing exercise to recover property valued... Read More...

Central Bank of Trinidad vs. CL Financial et al, a 10 Billion Dollar Bailout

Insurance, Financial Institution Management Fraud, Asset Search "Central Bank calls in Lindquist in CLICO probe" "…the Central Bank has retained the services of ace forensic investigator Robert Lindquist to sift through the tangled records of financially troubled insurance giant, CLICO, to determine whether it was a case of bad judgment or corporate malfeasance…tasked with the job of finding out what happened to cause the avalanche of financial troubles at the Lawrence Duprey-owned empire…Lindquist had no comment…'No disrespect to you but I am not talking to the press' was all he said. The investigation will be conducted within the context of... Read More...

Crosby Offshore Services, St. John’s, Newfoundland

Oil & Gas Management Fraud Stop it while you can This case involved a privately held company owned by a family who had been part of the country’s political history. The police had started an investigation aided by an outside accounting firm. Initially, the subjects believed that the matter would resolve itself. However, it continued with the prospect of becoming very serious. Some people believe that the more time an investigative body invests in a case, the more difficult it is for them to withdraw without making a criminal charge. The case was proceeding down this road. Retained by counsel... Read More...

Continental Bank – Creating Something From Nothing

Financial Institution Management Fraud Creating something from nothing Management created this company, Windsor Ceramic Tile with promises of employment in exchange for government loans. With these loans and their equity contribution in place, a fixed asset bank loan was obtained to finance the purchase of equipment intended to reduce the need for a large labor force, in order to make the company more competitive with its foreign competitors. Profits never came and the bank called the loan. With $50 million of fixed assets on the books, it became a challenge to find these assets in the manufacturing plant. In the... Read More...

London Life

Insurance Management Fraud The Anonymous Letter A forensic accountant has a crucial obligation to maintain the purity of a corporation or any operating division while conducting an investigation. In a case as sensitive as this one, involving a most conservative insurance company, the top priority was to ensure purity at the highest level as the subject of the allegations was a very senior member of management. Retained by Counsel for the CEO, and with a damaging anonymous letter known only to two other people, I was asked to determine if there existed any merit to the contents of the letter.... Read More...

Amstel Brewery

Manufacturing Management Fraud Sleuthing with Counsel This case is a lesson learned about how not to investigate and still survive. It’s late Friday night, and the company’s President is still at work. Of course, we (including external counsel) are sitting in our carefully parked cars armed with allegations of expense fraud ready to pounce on the accounting records. But it gets late and we give up. We returned Saturday and why not, we had the right of access from its foreign owner and in-house counsel who wanted us to just get on with the investigation. Well, I am sitting at... Read More...

Greymac Mortgage, Seaway Mortgage And Crown Trust

Financial Institution Management Fraud $500 Million creates $230 Million Profit "Public Money and Private Greed: The Greymac, Seaway and Crown Trust Affair" (Terence Corcoran, Harper Collins, 1984) provided this opening description: “The true story of the rise and fall of three men-Leonard Rosenberg, William Player and Andrew Markle-who almost pulled off the greatest real estate deal in Canadian history: the $500 million sale of 10,931 Cadillac Fairview apartments to Arab investors that created an instant profit of $230 million….Two months after the sale their profits were gone and their business empires….had been taken over …by the Ontario government…” It came... Read More...

Windor Meat Packing

Retail Management Fraud Why honest management steals This case, like the previous one, is another lesson learned in understanding why honest people in management steal. There are a number of reasons: To maintain a lifestyle of apparent success Colleagues are stealing and succeeding Feel justified due to unfair compensation Simple greed For survival, either at the personal or corporate level The last is what we have here. The bank is usually the first to probe. Where are the receivables, the inventory, and the cash? For management the questions come from every direction. Well the short answer is they never existed!... Read More...

Regina vs. Kotowski

Retail Management Fraud School over-billed; documents destroyed by arson As President, Kotowski operated the Central Fuel Oil Company, which delivered fuel oil to the local high school. For three years he over-billed the school by shutting off the delivery pipe while letting the meter run. Then, before the documents could be seized, the premises of the company were destroyed by arson. While record reconstruction is a challenge, access to third parties usually produces the required relevant documents. That is why I have never been too concerned when people fear document destruction. In this case, an engineer was retained to determine... Read More...

Regina vs. Harold Scheel

Manufacturing Management Fraud Deposits yes; skids no In a jury trial in November 1976, Judge Couture ruled in favor of the admissibility of accounting schedules, “having heard,” as he stated, “the testimony of Mr. Lindquist.” The ruling was appealed and in May 1978 the Supreme Court of Ontario, Court of Appeal set the precedent as to the admissibility of accounting schedules stating that the “learned trial judge did not err.” Their ruling included reference to the two unreported judgments noted earlier, Parks and Waddilove & Steele. This case also made me appreciate that there is no simple fraud case when... Read More...

Regina vs. Olan, Hudson and Hartnett

Retail Management Fraud Assets of a Company are used to buy the Company The case involved the purchase by Beauport Holdings of Langley’s Limited, a long established dry cleaning enterprise in Toronto that owned a substantial portfolio of blue chip securities in 1971. Hudson, President and Hartnett, Vice President of Beauport Holdings played the dominant roles aided by Olan who was to receive a finder’s fee for negotiating the sale. To complete the purchase, Beauport Financial received funds from Langley’s that it loaned to Beauport Holdings to complete its purchase of Langley’s. The issue was whether the funds were expended... Read More...

Regina vs. Parks

Government Management Fraud A County Engineer with the County’s Tractor In January 1974, this case gave me the opportunity to sit with Crown Counsel Rod McLeod at the table through a jury trial. Once again as the last witness, I gave fact evidence of financial transactions regarding the acts of the accused Don Parks as the County Engineer. The Defense argued against the use of an overhead projector and lost. The Defense also argued against the introduction of accounting schedules and lost. The presiding Judge Garth Moore ruled the accounting schedules admissible given what he described as the “veritable blizzard... Read More...

Regina vs. Harold Ballard

Sports Entertainment Management Fraud Wedding: a hockey expense This was the first case in Toronto to answer the question as to whether there is one law for the rich and a different law for the poor when a high profile person in the community is the subject of a major fraud. Harold Ballard was the owner of the Toronto Maple Leafs NHL hockey club and I had the pleasure of working in Maple Leaf Gardens identifying vendor invoices that were later determined to be fraudulent – with wedding expenses charged to the Gardens’ hockey stick expense account. The accused gave... Read More...