The accused were charged with multiple offences under the Canada Small Business Financing Act arising from three government‑guaranteed small business loans obtained between 2005 and 2006.
The Crown alleged that false equipment invoices were submitted to banks to obtain the loans and that the proceeds were diverted through companies controlled by the accused rather than used for legitimate equipment purchases.
The court found beyond a reasonable doubt that the invoices were fabricated and that the accused jointly participated in a scheme to obtain loans through false representations.
However, the court held that the evidence did not establish laundering of proceeds of crime because the Crown failed to prove an intent to conceal or convert the funds rather than merely distribute them.
One accused was convicted on counts relating to the latter two loans and acquitted on the first loan due to identification issues, while the other accused was convicted of participating in the fraudulent loan applications but acquitted of laundering counts.
