Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE: 2013-09-19

FILE: 7796/MVDA

CASE NAME: 7796 v. Registrar, Motor Vehicle Dealers Act 2002

An Appeal from a Notice of Proposal by the Registrar, Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sch. B - to Revoke Registrations

Sahbi B.A (Alex) Bakir and 1839583 Ontario Inc. o/a Big Star Auto Applicants

-and-

Registrar, Motor Vehicle Dealers Act 2002 Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR: Alex McCauley, Member

APPEARANCES:

For the Applicants: John Liddle, Counsel

For the Respondent: Brian Osler, Counsel

Heard in Windsor: September 19,20, 2012; October 2, 2012; November 7, 9, 19, 20, 2012; December 17, 2012; April 15, 16, 2013; May 27, 28, 2013

REASONS FOR DECISION AND ORDER

BACKGROUND

This is a hearing before the Licence Appeal Tribunal (the “Tribunal”) arising out of a Notice of Proposal (the “NOP”) issued by the Registrar, Motor Vehicle Dealers Act 2002 (the “Registrar” and the “Act” respectively.) The Notice of Proposal dated November 17, 2011 proposed to revoke the registrations of Sahbi B.A Bakir and 1839583 Ontario Inc. o/a Big Star Auto, as salesperson and dealer under the Act.

The Registrar alleges that the Applicants have not conducted their business in accordance with the law and with integrity and honesty. There are many allegations of misconduct on the part of the Applicants. These include, but are not limited to, fraudulent motor vehicle leases, pending Criminal Code charges, including forgery, uttering forged documents and trading while unregistered

Several procedural matters arose during the course of the hearing. The parties requested an order excluding witnesses which was granted.

On the third day of the hearing, October 2, 2012, Counsel for the Applicant requested production of original files being held in police custody. The files were subsequently produced by D/Cst. Amormino on agreement that D/Cst. Amormino would retain custody of the original files until the end of the hearing in order to ensure continuity of the files regarding an ongoing criminal matter.

On November 20, 2012, Souheil (Daniel) Yazbek, who was also named in the NOP, made a motion to have the NOP severed in order to have his matters heard separate from the other parties. This was requested in order to expedite Mr. Yazbek’s matters. The motion was granted and an order was issued.

During the course if the hearing, Counsel for Mr. Bakir agreed that Mr. Bakir is the sole director of 1839583, o/a Big Star Auto.

EVIDENCE

[Registrar](https://www.canlii.org/en/on/laws/stat/so-2002-c-30-sch-b/latest/so-2002-c-30-sch-b.html)’s Evidence

Sam Amormino, Detective Constable, Ontario Provincial Police:

DC Amormino is assigned as the financial crimes coordinator. He had charge of the investigation into various criminal allegations against the Applicants. He has been a member of the O.P.P. for 24 years and has been in his current assignment for 9 years.

He first became involved with the investigation of the Applicants in July 2010. At that time, JB a financier approached him to complain about alleged irregularities with a vehicle that he purchased and subsequently financed for resale. The deal involved Windsor Mitsubishi, a dealership that both Mr Yazbek and Mr. Bakir were involved with.

The deal was for the initial purchase of a 2005 Lamborgini purchased by JB for $123, 385.00. Additional fees on the vehicle brought the total purchase price to $137,875.00. The vehicle was delivered to Windsor Mitsubishi by JB. The alleged principal of the dealership was one QK. This later turned out to be false. At this time, $34, 146.13 was paid to JB. The balance of $109,500.00 was to be paid in instalments of $5700.00 per month over 21 months commencing May 21, 2010. The contacts for JB at Windsor Mitsubishi were Souheil (Daniel) Yazbek and a person referred to as Rene. He conducted most of his business with Mr. Yazbek who he knew to be the manager of Windsor Mitsubushi.

In a video statement made to DC Amormino on July 30, 2010, JB states he was supposed to make $20,000.00 on the Lamborghini deal. The initial cost of the deal to Windsor Mitsubishi was $149,704.00 with a balloon payment at the end. JB was given post dated cheques in the amount of $5,777.00. JB was told after the first cheque not to try and cash them because they would be returned NSF. During this period JB consistently attempted to get in touch with QK but was always put off. He spoke once to the alleged QK, but recognized the voice as that of another principal in the company, AH. It was around this time that JB began taping phone calls between him and the dealership personnel.

JB was also involved with MG and RG, a father and son with known crime connections. They had initially inquired about purchasing the Lamborgini from JB. They later wanted to create a deal to purchase Windsor Mitsubishi with JB.

JB had a firm called Napier Bailiffs seize the Lamborghini on July 16, 2010. The bailiffs were ST and JS. .

On August 20, 2010, the O.P.P. observed the Lamborghini being operated by DL Noon. They seized the vehicle which was subsequently turned over to JB. When DL was interviewed by the police he stated that the signatures on the lease documents (Ex 10 & 11) were not his. At about this time, Mitsubishi cancelled their dealership agreement and Windsor Mitsubishi then became known as 5 Diamond.

The next complaint to come to the attention of DC Amormino was on September 2, 2010. At that time, PM came to the police and made a complaint around his purchase of three vehicles from Big Three Pre-owned Centre (“Big Three”), a dealership owned and operated by Sahbi B.A (Alex) Bakir

The vehicles were: a 2004 Acura TL VIN # 19UUA662214A803590, with a purchase cost $17,500.00, a term 48 months @ $476.54 monthly, and an interest rate of 8%; a 2004 Acura MDX VIN # 2HNYD186X4H002646 with a purchase cost $23,700.00,a term of 48 months @ $515.37 monthly, and an interest rate of 9%; and a 2005 Ford Ranger Edge Super Cab VIN # 1FTYR44U95PA64596 with a purchase cost of $9,900.00, a term 48 months @ $375.65 monthly, and an interest rate of 10%. The three bills of sale form part of Exhibit 7.

PM stated that at the time of purchase Alex Bakir had stated that the bills of sale that he had signed would be mailed out to him in a few days. On August 8, 2009, after numerous requests, PM received copies of the three bills of sale in the mail.

According to PM the bills of sale were altered. He disputed his signatures on the documents; it is not his custom to sign Pat M, he would sign Patrick. This appears to be the case in other documents PM agreed he signed, such as the bank document, Exhibit 13. There was never any conclusive evidence to support the contention that PM’s signatures on the bills of sale were forged.

All the documents were allegedly flawed in that the cost of borrowing ( box 24 on the bills of sale) was blank. The bill of sale for the 2004 Acura VIN # 19UUA66214A803590 indicates a $1500.00 deposit; PM states he made no deposit on that vehicle. Bank statements from PM’s TD bank account do not show a $15500.00 deposit for that vehicle. The cost of the vehicles, terms and interest rates as per the bills of sale were inflated from the cost agreed to by PM at the time of purchase.

Accompanying PM during this interview with DC Amormino were PM’s stepdaughter and her common-law husband. The vehicles purchased by PM was financed by him, but the two Acura vehicles were for his stepdaughter, JS, and her common-law husband, ST.. A signed agreement was entered into by PM, JS and ST in regard to the vehicle financing.

JS was going to deal the 2004 Accura TL, A check through the Used Car Dealers Association of Ontario (UCDA) showed this vehicle had been previously involved in a motor vehicle accident. This had not been reported to PM by Mr. Bakir at the time of purchase.

JS stated after viewing the bills of sale received by her stepfather that they had been altered. In her view, the cost of the vehicles, terms and interest rates were all increased from what she knew to be the negotiated prices. She noted the monthly payments remained the same.

In September 2010, a police search warrant was executed at Big Three Pre-owned Centre Ltd. The original bills of sale dealing with PM’s purchase of the three vehicles were recovered intact; none of the copies, for example, the customer copy were detached.

On July 28, 2011, DC Amormino received an audio recorded witness statement and on October 21, 2011, a video statement, from KM (Exhibits 8 & 9).

KM, PM, St, JS, JB did not attend the hearing to give evidence. . Allegations concerning inappropriate dealings between them and Mr. Bakir were not pursued by the Registrar. Evidence presented around their transactions was based completely on hearsay evidence, and was not considered by the Tribunal.

On June 29, 2011 DC Amormino obtained a video statement from TD (who did attend as a witness, subsequently, at the hearing). TD purchased a 2005 Chevy Cobalt VIN # 1G1AL52F157622298. The purchase cost negotiated was $9,900.00, the term was 36 months @ 365.00 monthly, and the interest rate was negotiated at 17%.

TD dealt with Alex Bakir who identified himself as the business manager of Big Three Pre-owned Centre Inc.

On January 30, 2010, TD gave Alex Bakir a $1,000.00 deposit and signed the used vehicle purchase contract for the vehicle. The document he subsequently received from Big Three was not the document he allegedly signed. The document he received was not dated, lacked the interest rate and the terms and condition of payment. The document had his signature but to him it appeared to have been added from a photocopy; he had no recollection signing the document received.

On receiving documentation from the financing institution, Carfinco, it showed an interest rate of 29.50%. He had negotiated 17%.

Again, the cost of borrowing box on the sales contract copy is blank. The cost of borrowing as documented on the Carfinco document was $7,705.26.

The documents received by TD were a photo copy, not an original.

Exhibit 19 is another copy of a used vehicle bill of sale made to TD for the same vehicle. This copy shows the selling price as $9,900.00 as opposed to $8,005.00 on the copy in Ex. 7 tab 3 page 32.

When TD contacted Carfinco, he was advised at that time that he had an outstanding balance owing of $8,000.00. The vehicle was seized on May 31, 2011 for default in payments.

On October 18, 2011 DC Amormino received a video statement from RT (who also testified at the hearing); TD, on January 14, 2009, purchased a vehicle from Alex Bakir at the Big Three. The terms would be $350.00 a month for 48 months. The vehicle was a 2006 GMC Envoy VIN # 1GKDT13S362133168. The cost was listed as $15,425.00.

RT signed the bill of sale January 14, 2009. The down payment was to be $4,000.00 not the $4,620.00 as listed. Alex Bakir was to give him time to raise the downpayment.

RT stated he did not believe that is his signature on the credit application. Further, the information on the credit application is incorrect. For example when asked , how long he resided at his address, on the document it reads 2 years, but it should be 3 years; occupation listed on the document was labourer whereas he is in fact a computer programmer and has worked at KSR for 9 years not 3 years. His gross income is $6,200.00 not $5,000.00 as listed in the document.

At the time the statement was given, TD had paid just over $18,000.00 for the vehicle and still owed $7,000.00.

RT stated that the signature on the document “Payment Assurance system” dated January 21, 2009 is not his. Nor is it his signature on the “Employment Authorization” form. RT advised that he signed the original bill of sale.

A search warrant executed at Big Three on September 30, 2011 led to the recovery of the original documents intact The warrants in question related to the three complainants, KM, PM, and RT. Recovered were all the original purchase agreements, including the agreement surrounding the purchase by JB. All original documents were found in Alex Bakir’s office at the dealership.

Alex Bakir and JH, a co-owner in the dealership, were arrested and initially charged with forgery and fraud, contrary to the Criminal Code of Canada (CCC).

On October 24, 2011, a police joint forces operation (JFO) code named “Salvage” began. It was made up of members of the O.P.P., Windsor City police, R.C.M.P. and members of the investigative wing of OMVIC. DC Amormino was a lead investigator of the JFO, which concentrated on a team of suspected car dealers and dealerships. Mr. Bakir and Mr.Yazbek were two of the suspects under investigation by the JFO.

On November 3, 2011, search warrants were drawn up and executed at certain Windsor car dealerships and at the residences of Alex Bakir and Daniel Yazbek.

In the early morning hours of November 3, 2011 prior to the search warrant being executed, someone threw a “Molotov cocktail” through the window of the Five Diamond car dealership in an attempt to burn it down. Emergency responders quickly doused the flames and there was minimal damage to the facility.

The searches conducted November 3, 2011 resulted in the seizure of financial documents from the residences of Bakir and Yazbek. Computers were seized as well. Seventeen suspected files were found on Alex Bakir’s desk at Big Three.

Cross examination of DC Amormino

DC Amormino stated that Alex Bakir was not involved in the deal with JB involving the sale of the Lamborghini. Information regarding JB and the Lamborghini deal came to him from a third party, ST, a local bailiff. The witness admitted that ST and his company figured prominently in this matter. ST had seized the Lamborghini on behalf of JB. The information provided to police was the catalyst in getting the investigation initially moving and resulting in the witness speaking with JB.

The witness admitted not doing an in-depth vehicle search to establish ownership of the Lamborghini. He stated the vehicle was plated and he was satisfied that JB was the lawful owner. His initial interview with JB was at his residence.

The person identified as QK was eventually found and interviewed. He had never been a part of any of the deals before this Tribunal. He in fact has a business in Cambridge, Ontario.

DC Amormino stated that JB had been taping phone calls between the principals involved in the deal around the sale of the Lamborghini and that JB disclosed these to him. He agreed that JB made $100,000.00 on the Lamborghini and in the end kept the vehicle.

The vehicle was initially seized by the bailiff, tagged and stored. Instructions to staff at Big Three were that the vehicle was not to be moved. The vehicle was observed being operated by DL’s son, DL having been the lessee of the vehicle. The vehicle at that point was seized by DC Amormino and held at the O.P.P. detachment office and then subsequently released to JB.

Criminal charges that had been laid against Daniel Yazbek did not proceed.

DL, the lease holder, was interviewed on February. 23, 2011, several months after he had seized and released the Lamborghini to JB.

It was DC Amormino’s opinion that JB who was the financier on the vehicle was entitled to seize it on default of payments.

Dc Amormino testified that a lease search conducted July 15, 2010 showed the lessor of the Lambourghini to be DL and the vehicle owner as Windsor Mitsubishi. The secured party, who one would assume would be JB is not listed on any of the lease documents.

In response to questioning about the titled owner of the Lamborghini, DC Amormino stated that on July 30, 2010 JB showed him ownership documents, but he could not recall the name on the ownership. He went on to state that the titled documents from Humber Motors shows the vehicle transfer to Windsor Mitsubishi.

The witness stated that bailiff, ST with Napier Bailiffs has a relationship with PM as he lives common-law with PM’s stepdaughter. In addition, when PM purchased the three vehicles one was for his stepdaughter, JS, the other for ST. The agreement was that ST and JS would indemnify PM for the vehicles purchased on their behalf. The witness admitted he did not know about the deal regarding the three vehicles purchased by PM when he interviewed PM, with ST present, on September 2, 2010. The witness denied that there was an inference here that information was being withheld from him.

Exhibit 20, an agreement and guarantee between PM, ST and JS dealing with the financing of the two Acura vehicles purchased by PM was put to DC Amormino. He was crossexamined on the appropriateness of having ST and JS in the room while he was interviewing PM. The witness agreed that ST should not have been in the room. He was concerned around PM’s deteriorating health from the time of his first interview, the result of a stroke.Exhibit 20 was recovered from the Napier Bailiff file. He admitted to not asking PM if he had signed the finance agreement (Ex. 20). The reason, allegedly, for PM entering into this agreement for the purchase of the vehicles was that ST and JS had been recently divorced from their spouses and had no money.

ST and JS were both bailiffs at Napier Bailiffs.

Hand writing samples from PM taken by DC Amormino were sent to the Centre of Forensic Sciences for evaluation but came back as inconclusive. Hand writing samples were asked of RT but not sent for analysis. No samples were requested from KM or TD.

JS had come to DC Amormino to complain that Alex Bakir had not got back to them and that they were trying to obtain copies of the original sales contracts. In addition, she reported that one of the vehicles had been involved in an accident prior to PM purchasing it and the accident had not been disclosed.

DC Amormino stated that Big Three accommodated customers with poor credit ratings.

PM, ST and JS had negotiated terms with Alex Bakir prior to the purchase of the three vehicles. He had no knowledge as to why it was years later before PM, ST and JS decided to attempt to get the original sales contract.

The witness described the Ontario expert on auto financing he allegedly spoke with as being a confidential informant. He therefore refused to name this person. This apparently comprised the sum total of his knowledge of auto financing.

Files containing original documentation were requested by the Applicants and presented by the Respondent at the hearing.

DC Amormino was concerned about the conduct or lack of due diligence on the part of the financier on many of these deals, which was Carfinco, based in Edmonton Alberta. In 2012, a search warrant was executed at the Carfinco’s offices. Carfinco’s management told him that they routinely contact borrowers to explain all the costs prior to closing the deal, however, he found little concrete evidence of this happening. He stated that often the contact phone numbers listed by Carfinco for clients were bogus. In his view, if these calls actually took place they would be helpful to the borrower. There is little evidence that these calls routinely took place.

DC Amormino stated that he communicated several times with Carfinco’s general manager, EK. The process for releasing funds on approved contracts is that 75 % of the value is forwarded to the dealer with the remaining 25 % to be forwarded to the dealer at the end of the contract. A Carfinco Utility Check document (Exhibit 26) was put to the witness. The document shows a check list of a number of areas. It was allegedly completed on February 18, 2009 by TS, who is no longer an employee of Carfinco, and relates to the financing for RT. The witness stated that RT told him that Carfinco never contacted him about the loan. RT had negotiated a rate with Big Three of 24%; his actual rate was 29.5%. He did not know of that rate.

In reviewing the documents, DC Amormino stated that most of the bills of sale and the financed amounts were the same. This was the case with KB. TD’s totals were different, but when one adds the service charges of Carfinco of $300.00 the amounts balance out. TD purchased his vehicle January 30, 2010 and it was seized for default in June 2011. During that period, TD made payments on the vehicle. His payment history was erratic. According to the witness, he was late with payments and admitted to missing payments.TD was under the assumption that his payment balance should have been less than it was after one year. TD allegedly never received any documentation from Alex Bakir.

DC Amormino agreed that the dealership, Big Three would have assisted the purchaser with obtaining financing. He went on to state that the lenders relied on the information received from Alex Bakir as it was he who drew up the documents. He didn’t believe that the lenders reviewed the terms with the borrowers.

TD alleged he never signed the sales agreement, yet he had the car and regular payments were coming from his bank account. DC Amormino alleged that forged documentswere forwarded to Carfinco from Alex Bakir.

DC Amormino was not in agreement with the contention that Carfinco had done a proper job as all the documents relating to TD were not completed in detail. The “Utility Check Summary” in the Carfinco file has check marks beside certain areas. The document in the files of Big Three regarding TD had none of those marks.

ST apparently was advising would be victims to report their experiences to the police He directed TD to the police ST allegedly lost his position at Napier Baillifs for passing on documentation to the police. ST was involved with JB and the Lamborghini deal, PM and the purchase of the three vehicles and TD. .

The vehicles originally purchased by PM were originally financed by HSPC Bank. The “paper” was purchased by Carfinco, who allegedly wanted to seize the Ford Ranger purchased by PM.

The witness stated in his opinion Carfinco was also a victim of Alex Bakir and Big Three in that Carfinco forwarded funds to Big Three based on forged documents they allegedly received. When he asked HP, a bookkeeper at Big Three about the shredding of files, she was surprised and stated that these may have been “dead” files which are routinely shredded.

In re-examination, DC Amormino was directed to the two bills of sale in TD’s file, one handwritten and one typed. TD had a signed copy of the handwritten one which allegedly had been given to him by Alex Bakir (Ex. 19). There was also a receipt for $1000.00 found in the file (Ex. 29), which amount appeared on the handwritten sales contract but is missing on the typed copy.

He also corrected earlier evidence. He had earlier testified that Mr. Bakir’s business card was found in TD’s file. That was incorrect: the card was given to him by TD at the time he was interviewed. He had further testified that there was a $500.00 cheque from TD in the file. That was incorrect: the cheque in question had been returned to TD by Mr. Bakir.

Kevin McCann, Detective, Windsor City Police

Detective McCann has been a police officer for 25 years. His current responsibilities are in the area of financial crime and arson investigations. He became involved with the investigative team as a representative of the Windsor police because the offences had occurred within the City of Windsor .Det McCann became the focal point for complainants after a press release went out after the search warrants were executed on Big Three and some of the company principals in November 2011 He fielded over 300 calls, but if complainants could not provide paperwork or if they had signed their contracts the complaints were not acted upon.

Det McCann interviewed a number of persons and videotaped the interviews (Exhibits 8 & 9). He also conducted an interview with BSJ, a bookkeeper with the Big Three.

One of the complaints investigated involved KB who was planning to trade in a 2002 Chev. Trail Blazer and purchase a 2003 Ford F250 from Big Three. KB also attended as a witness at the hearing. KB’s father, ‘Ken’ was to co-sign the loan for the vehicle. HSBC Bank was the financier. The loan application on page 62 allegedly has Ken’s signature on it. Ken denied that is his signature, hence the investigation by Det. McCann.

There was a further concern with this transaction. The original document recovered in the file from Big Three was different than the one that KB had obtained upon request from HSBC Bank. The numbers and signatures do not line up correctly between the 2 documents. There are number differences as well such as the selling price of the vehicle; the original shows a selling price of $32, 900.00 and the copy shows a selling price of 39,900.00. The total balance due on both documents was $40,335.00.

The Tribunal heard later, from a video interview with MG an auto trader and owner of a financing company, KB had a large lien on the vehicle he was trading, $14, 500.00. If he shows negative equity he will not be approved for financing. She stated in her interview that it is common practice to work the numbers in order to secure financing from lenders, but the bottom line agreed to on final price does not change.

At the time the deal was being put together both KB and his father attended at Big Three. His father signed a document; he believes it was the conditional sales offer but denies signing any financial documents. KB returned to Big Three on his own and completed the deal.

In cross examination, the witness stated that he had no direct involvement with the investigation involving JB or the Lamborghini deal. Nor was he involved with PM and his purchase involving 3 vehicles. Det McCann had no dealings with ST or JS as it relates to this investigation. He was not sure exactly when the OMVIC investigator became actively involved in the Joint Forces Investigation (JFO).

Det McCann stated that there were no auto finance experts on the JFO team; they gained experience as they went along. It was his opinion that auto dealers can play with figures that are submitted for financing. Det McCann stated that he was advised by the OMVIC representative, a Mr. Spencer, that the “cost of borrowing” (line 24 on the bill of sale) must be filled in.

He admitted that the bottom line numbers on the deals were the same, but he was concerned that the documents were being manipulated as he described it “cut and paste”, it appeared suspicious and improper to him. He would not describe Carfinco as a victim in these matters.

KB had not come forward to lodge a complaint until after the publicity surrounding the investigation. KB’s issue in part was he thought that his payments would be lower than they turned out to be. He did not ask KB if the lending institution contacted him at the time of financing.

Det McCann stated documents were shredded at Big Three ahead of the police search. He did not agree with the premise that these were simply cancelled deals.

Steven B Spencer

Mr. Spencer is a Field Investigator for OMVIC. He deals with complainants and he does site visits to dealerships regarding complaints. In addition, he is a Provincial Offences Officer. He has been employed in this capacity with OMVIC for 21 months. Mr. Spencer was previously employed for 34 years as a police officer. He specialised in auto theft and arson investigations.

Mr. Spencer became involved with Mr. Yazbek and Mr. Bakir in September 2011. They were mentioned in a file that had been turned over to him by his predecessor Terry Hall.

In late October, 2011 Mr. Spencer became involved with the investigation involving DC. Amormino and the JFO team. He attended a JFO meeting late in October 2011 and again in November 2011.

On November 1, 2011, an Authoritative Hold was placed on the dealerships Big Three and Five Diamond by the Ministry of Transportation (MTO). This effectively suspended trade from the dealerships. While at Five Diamond on November 2011, the witness met JP who had purchased 2 vehicles from Big Three. This person was concerned that there were problems with the transactions. The documents in reference to this matter were bills of sale recovered from Big Three as the result of the execution of a search warrant there on November 3, 2011. The witness just took photocopies and left the originals with the police officers on scene. The sales documents relate to two vehicles, a 2010 Dodge Caravan VIN # 2D4RN4DE2AR256592 and a 2005 Chevrolet VIN # 3GNDA13D46S676091. Alex Bakir’s name appears as seller on both vehicles and all three sales documents in the file.

There are two sales contracts for the sale of the Dodge Caravan. The two contracts have different values on the face of the contracts yet relate to the same deal. It appears from documents on page 82 of Ex. 4 that Big Three purchased the vehicle in question from ADESA Corp. a dealer only auction for a total price of $19, 791.95. While at Big Three with the police conducting the search of the premises, the witness observed a sales contract in the name of RL. The contract was dated September 22, 2011, but had no terms. It was also for a Ford 2005, 500, VIN #.............0312. (EX. 4 p. 84). This document was similar to one located completed in the file for RL. That vehicle was a 2002 Ford Focus VIN #...............2647. The date on that contract was September 26, 2011 and Alex Bakir was the seller.

In cross examination, Mr. Spencer advised he had never been on the properties of Big Three or 5 Diamond prior to November 2, 2011.There was little or no OMVIC involvement with the two dealerships prior to 2011. He explained, in general terms, the complaint process at OMVIC. He would only be involved if the complaint was elevated to his level. He would then investigate and make whatever recommendations were warranted including the laying of charges.

Big Three became a licenced dealership in 2002 and JH was the principal. Mr. Spencer recalled that there was one complaint in the file he had received from Mr. Hall about a customer not receiving their sales contract. OMVIC inspectors attend dealerships. Notice is given that they are attending. They do a cursory inspection, generally of requested items from the principal of the dealership.

RT

In January 2009, RT attended Big Three. He wanted to purchase a 2006 GMC Envoy. The vehicle was somewhat out of his price range. He was dealing with Alex Bakir who told him he could make the financing work. RT told Mr. Bakir that he could probably handle payments of $350.00 a month. He also told Mr. Bakir that they only had $2500.00 to put down for a downpayment. Mr. Bakir told him a bigger downpayment would probably be required.

RT gave Mr. Bakir his employment information and Mr. Bakir was to get back to him. On January 14th, RT signed the sales contract (Ex. 7, Vol. 4 page 4). At the time, the witness’s wife attended the dealership with him and met Mr. Bakir. The vehicle was on the lot and they took it for a drive.

RT stated that the 2 signatures on the sales contract are his. When he left the dealership he had no paperwork. He received the paperwork and the ownership for the vehicle three weeks later. He took possession of the vehicle one week after signing the contract.

RT had to increase the down payment to $4,620.00. He had $2500.00, but required an additional $2,120.00. Mr. Bakir allowed them to make that payment through debit transactions and postdated cheques to the dealership.

He stated he was only at the dealership three times. Once to buy the car, another time to pick up the car and once to make a debit transaction. RT stated they agreed to pay $14,431.37 but at the time they did not know the cost of borrowing and that is why line 24 on the sales contract is blank.

RT stated the only financing details discussed were the acceptable monthly payment of $350.00 and that Mr. Bakir would arrange to help finance the downpayment. He also knew that the interest rate would be around 24%. RT does not recall signing the GO PLAN document dated January 21, 2009 (Ex 7, page 7). The signature on that document does not appear to be his. He may have picked up the vehicle on January 21, 2009 but could not recall signing any documents at the dealership when he picked up his vehicle.

The GO PLAN document on page 9 of Ex. 7, dated January 16, 2009 bears a signature that looks like his, but he testified that he was not at the dealership on that date. That particular document showed a much higher payment and a higher interest that he had agreed to. Another GO PLAN document for Carfinco (Ex 7, page 12) lists personal information for RT. The document is riddled with errors such as his mortgage payment, the address of his employer and what his work classification is. RT stated he never gave that erroneous information nor did he sign that document. The document is dated January 15, 2009. RT was definitely not at the dealership on that date.

RT stated he received the Carfinco documents dealing with his financing from DC Amormino. When RT surrendered the vehicle, the bailiff dealing with this matter suggested he contact DC Amormino.

RT realized he was paying $535.00 a month as opposed to $350.00 when he noticed the first payment come out of the bank. He stated that he never signed any documentation stating that his payments would only be $350.00 a month. He kept up the payments until April or May 2011. At that time, he had financial problems and missed a couple of payments. He was contacted by Carfinco and the bailiff, Steve, looking for the vehicle. He took the vehicle to Big Three and left it there with the keys under the floor mat. Carfinco resold the vehicle and there was a balance owing of $1000.00. Yet with finance charges, RT still owes $5000.00 to Carfinco RT had not responded to telephone calls from Carfinco prior to the vehicle being surrendered.

RT stated in cross examination that when he first looked at the vehicle in the lot he dealt with a salesperson; he could not recall who. The witness admitted in cross examination that there were more costs associated with purchasing a vehicle, that impact on the “ticket” price. The cost of the vehicle as per the bill of sale was $19,051.37 and this was admitted by RT. He admitted signing the bill of sale and that it was his signature on the document. RT’s wife was with him during the purchase of the vehicle. He understood that the financing of the vehicle would be indertaken by a finance company, not Mr. Bakir. Mr. Bakir assisted RT in financing the down payment for the purchased vehicle. When he drove it off the lot he still owed Mr. Bakir money for the down payment.

RT admitted to signing several documents, such as Go Plan documents, and a request to verify employment.. The witness was not sure that he signed the GO PLAN payment assurance plan on January 21, 2009. He couldn’t say if was or was not his signature, he was concerned that the loop on his signature did not go through the “R”. He could not be sure of the financial details of his contract.

The witness believed he would be paying $350.00 @ month after down payment he owed $14,431.00. There is no realistic way after interest and charges that the debt could be satisfied at $350.00 per month for 48 months. RT did not recall a lien notice on his vehicle from Carfinco.

The transcript from RT’s police interview was entered as Ex. # 33. In this document, RT admits to signing several documents in Alex Bakir’s office, such as the ownership, the warranty document and the application all have his signatures on them. He also remembered initialling but not signing the authorization for the GPS unit from Carfinco and he understood what it was for. He had no recollection of speaking with anyone from Carfinco and he said he never complained to anyone about the deal and financing of the vehicle. He could not state definitively which documents he did or did not sign.

KB

KB stated he attended at the Big Three with his father. He purchased a Ford F-250 and was trading in a 2002 Chev. Trail Blazer. He met with Alex Bakir and they agreed to the price of $32,900.00 for the vehicle. The terms on the 2 separate bills of sale were different. Also, he wanted the financing to be handled by Toronto Dominion Bank (T.D), but instead it was HSBC Bank Canada.

KB stated he only signed the one bill of sale that being Ex. #23. He went on to state the amount of $40, 335.00 was not on the sales agreement when he signed it. He did not remember seeing his father sign the sales contract as a co-signer for the vehicle financing. He stated that the signature appeared to be his father’s but he can’t recall his father using his middle initial when he signed documents. He got no paperwork upon receipt of the vehicle. He obtained paperwork from CIBC after he went bankrupt.

The witness stated he did not sign or initial the HSBC Bank document shown on p. 53 of Ex. 7. The signature on page 54 looks to be his but he has no recollection of signing that document. KB stated the terms he was expecting from T.D Bank was 6 months, no payments, and 60 month term financing at 7% interest. He stated that the loan documents he signed at Big Three were T.D. Bank documents.

KB took possession of the vehicle approximately 3 days after completing the deal with Alex Bakir. He became aware of the increased payments shortly after receiving the vehicle; he was told that those payments reflected a first and last month instalment. He went on to say that this is when he became aware that HSBC Bank was doing his financing for the vehicle. It was explained to him that he had not qualified for the T.D Bank loan. KB had anticipated a payment of $540.00 per month from T.D Bank. His payment from HSBC Canada was $820.00 per month. In February 2009 HSBC repossessed the vehicle when he could no longer make the payments.

In cross examination, KB stated he thought his payments for this vehicle he was planning to purchase would go to $500.00 from the 400.00 he was paying on the Blazer. The information on the lien regarding the $14,500.00 was given to Alex Bakir. The witness had received the information from his Father. The bank that held the lien was CIBC, his father’s bank. The witness agreed that there were certain consistencies between the two bills of sale tendered as exhibits. The net difference on both documents was the same.

KB stated he had signed a loan application to T/D Bank when he purchased the vehicle.

Exhibit .35, a transcript of an interview of KB taken in the presence of Detective McCann, Windsor Police and Cst. Prieur RCMP, on December. 6, 2011, was entered into evidence.

On page 14 of Ex 35, the witness stated that he and his father had signed a credit application for HSBC Bank. In his earlier evidence to the Tribunal he had denied this. He stated his earlier evidence to the Tribunal was incorrect.

KB agreed that he told Cst. Prieur that the debt owed by him was $40,000.00 (P. 22 Ex. 35). He also agreed that he told the police at the time of his interview that he and his father had signed the sales agreement. He agreed that the selling price was to be $32,000.00. He further confirmed telling the police on March 28, 2007 that he agreed to the lien costs and the items as listed on the sales contract and signed the bill of sale, Ex. 23, dated March 2007.

In March 2009, KB declared bankruptcy.

TD

TD is a professional fire fighter for the City of Windsor and has been so employed for 27 years .In February 2010, TD attended at Big Three to purchase a vehicle. The witness admitted his credit rating was not good at that point and that is what persuaded him to deal at Big Three. On February 2, 2010, TD purchased a 2005 Chev Cobalt VIN………22298 as outlined on Ex. 7 p. 32 (another copy of a bill of sale is Ex 19, a hand written copy and has no date). The selling price on the handwritten copy is different than that on the typed copy. In addition, the handwritten document has written comments on the left side of the document, dealing in part with a down payment and anticipated monthly payments.

In total, he gave Alex Bakir $1500.00 in cash. Initially, he gave him a cheque for $500.00 to hold the car, which he later replaced with cash, then additional $1000.00 cash.

TD anticipated his payments to be $384.00 per month for 36 months at 17% interest.

The selling price of the vehicle was $9,900.00 and Alex Bakir allegedly told him that the cost would climb to over $10,000.00 with the charges.

The witness stated that the signature at the bottom of Ex 19 looked like his, but it looked to be overlaid on the document. When shown the original of Ex. 19 (which is Ex. 28) there is blue ink on it. The witness did not recall signing that document. TD went on to say that he didn’t recall seeing that document; he said he saw the original when first speaking with Alex Bakir. There is a clearer copy of the sales contract page 52 of Ex. 4. The witness stated he signed this copy. He also witnessed Alex Bakir sign the document, in his office.

TD stated that nowhere on the document was there an indication of an interest rate of 17%. being charged for financing. He later became aware that Carfinco, who financed the deal, was charging him 29%. There was no note of the monthly payments on the final bill of sale.

He received a package of documents from Alex Bakir. He signed a document in Alex Bakir’s office which outlined terms. He stated the document was orange in colour and official looking. The copies the witness received from Mr. Bakir were the final bill of sale, the global warranty and a copy of receipts.

Later, he had some problems with late payments to Carfinco. At the time, he considered buying out the loan. When he called Carfinco, he was told that the outstanding balance was $9000.00 and this is after he had been making payments for a year. He was advised by Carfinco that the first series of payments go to interest charges. They then advised him of the interest being charged, which was 29%. He then attended at Windsor Police, who directed him to the OPP.

TD examined Exhibit 28, a credit application, and stated he signed same. He stated he received documentation from Carfinco regarding the financing. He did not agree with the financing as outlined. When asked if he signed the document he said, “I don’t believe so”.

In cross examination, TD stated he had conversations with persons from Carfinco at various times if he was late with a payment. Carfinco never put him on notice to seize the vehicle. He was one payment behind and the bailiff showed up at his daughter’s place of work and seized the vehicle. His dealings with Carfinco did not involve Alex Bakir. TD spoke with the bailiff later, in order to locate the vehicle. The bailiff did not direct him to the police.

Discussion around Ex. 19, the handwriiten bill of sale, suggested to the witness that Alex Bakir was not there on that date and in fact he dealt with someone else. The witness admitted that the sales signature on Ex. 19 did not appear to be that of Alex Bakir. It was further suggested that the document in question was not a binding contract. The witness admitted that Alex Bakir would have to be in attendance to finalise the deal.

The primary user of the vehicle was to be TD’s daughter, but in order to get insurance coverage suitable to the lender, Carfinco, TD had to be listed as the primary user of the vehicle. TD, on undertaking this purchase, was of the opinion that he could pay off the loan before term because he had monies coming in from other sources.

He admitted that on the Carfinco financing document he signed and the bill of sale from Big Three, he numbers were the same except for a $499.00 administration fee and a five dollar OMVIC fee. He also agreed that it appeared to be his signature on the document from Carfinco (Ex. 19) but he thought he had agreed to a term of 36 months not 48 months. He disputed the term of the loan as outlined and the interest rate. He stated these were not discussed. The witness stated he signed the Carfinco GO PLAN payment Assurance document on February 3, 2010. He did not recall a conversation with representatives from Carfinco to discuss the terms of financing.

On April 15, 2013, Registrar’s Counsel advised the Tribunal that a previous witness, DC Amormino, had contacted him and wanted to re-attend the hearing to clear up some matters from his previous testimony, in particular, ,his involvement with ST a bailiff who was involved in the investigation and who had supplied certain information to DC Amormino.

The parties agreed he should clarify his earlier evidence and be subject to cross examination on this further evidence.

DC Amormino stated in his earlier evidence he had denied having a relationship with ST. The truth was that he did have a business relationship with ST. They were principals in a business called Cashflow Solutions Inc., Ontario Corp. number 2271332 (Ex. # 38). The corporation essentially provided loans against vehicle title and vehicle loan repairs (Ex. 39). They advertised “No credit? Or Bad credit? No Problem! You’re Approved!”.

DC Amormino insisted he was a silent partner and never actually worked on the deals. Yet, during his evidence, he mentioned that this project was in the works for at least a year or two prior to its being incorporated on January 18, 2011. He further stated the in that period of time he and ST had frequent meetings regarding this venture.

He stated that recently he and ST have had a falling out. ST has accused DC Amormino of stealing $20,000.00 from the company. For that and other reasons, he has initiated a criminal harassment complaint against ST which apparently has been undertaken by the Lampton County O.P.P. He went on to state that since this matter has arisen, he has advised his employer about his involvement in this business venture with ST.

DC Amormino stated that in his mind ST has no “moral compass” and he is sorry he ever became involved with him.

In cross examination, Dc Amormino stated that a GPS unit is installed in vehicles in which money has been lent to the owners. This is to ensure that in the case of default, the vehicle in question can be located.

The witness kept repeating during cross examination that the business was a niche market. Most work was done via internet, but he did admit that office work was required to process the paper work.

In cross examination, the witness stated that he first discussed the deal with ST in 2010, around the time of the Lamborgini deal involving JB, where ST had involvement as a bailiff.

DC Amormino stated he became involved in the PM investigation when apprised of it by ST. Mr. Amormino stated that is not why the investigation took place involving the PM file, it was principally driven by the facts in issue.

The witness stated that there were 2 samples of PM’s hand writing sent to the Centre for Forensic Sciences (CFS). The witness had stated in his earlier testimony that the samples came back “inconclusive”. In fact, the report from CFS dated April 27, 2011 came back that the conclusion was ”probably” signatures of PM, (Ex. # 40). When asked directly “Is it fair to say PM signed the documents in July 2008”? The witness’s response was “If you say so”.

Applicant’s Evidence

Sahbi (Alex) Bakir

Mr. Bakir is a resident of Windsor Ontario. He is 33 years of age, is married and the father of two children. He was born and educated in Tunisia.

In 2003, he started in the business as a lot manager and learned the car business. He completed the prescribed courses of study and was licenced to sell cars by OMVIC. He started working at the Big Three. The owner of Big Three at the time was JH(Jay).

Mr. Bakir had no direct involvement with the Lamborgini deal. He never worked for Five Diamond.

In 2005 or 2006, Mr. Bakir became the finance manager at Big Three.

In 2005, Big Three was a medium sized business, but they expanded in 2006-2007 to become the biggest used car dealer in Windsor. Mr. Bakir was arrested and charged in 2011.

Mr. Bakir was selling 60 to 70 cars per month retail and 30 to 40 a month wholesale. In 2011, Mr. Bakir was not selling cars on the lot. Approximately 10 people were employed by the Big Three in 2011.

Prior to the difficulties arising from the police investigations in 2011, the dealership had a spotless record with OMVIC. Mr. Bakir was never disciplined or sanctioned for violating any regulations by OMVIC.

Mr. Bakir maintained it would be totally contrary to good business practices to attempt to deceive clients in any way. Mr. Bakir went on to state that one of the complainants, KB, had attended at Big Three after buying his latest vehicle from them. He had brought a potential customer to Big Three.

He had no knowledge of any complaints from any of the complainants in this matter until after his initial arrest in 2011.

The finance company Carfinco deals with the clients. They essentially have two plans. The “Go Plan” which has been used by some of the complainants in this matter, is for those who virtually no one else will provide money to. Often these persons are on a “Proposal” as the result of bankruptcy. Carfinco is the only company that will deal with a “Proposal” and the interest rate is 29.5 %. The witness stated that the “Go Plan” loans do not benefit the dealership as Carfinco only forwards 75% of the price of the vehicle to the dealer and holds back 25% until the contract is fulfilled. The “Go Plan” basically helps to build clientele for the future for the dealership.

Mr. Bakir advised that all customers must sign a “Delivery Sheet”. This document ensures that customers have agreed to all the terms of the sale and have received the appropriate documentation. Mr Bakir alleged that many of these documents were seized by the police during the execution of their search warrants and never returned or disclosed.

In response as to the question as to why, on some bills of sale, the cost of borrowing was blank, he alluded to a software problem. The dealership works on a system called “Evolution”. When the deal is signed and when payments start affects the interest charged. For example, if the deal is signed on the 17th, of the month, payments will start then the following month, but if the customer wants them started on a different date this could affect the number in the cost of borrowing. The witness stated he has made attempts to correct the problem with “Evolution” and has apprised OMVIC of the problem in the past but has received no feedback from OMVIC regarding this concern.

Mr. Bakir stated that the bottom line number on the bill of sale and the finance agreement between the customer and the financial institution must be the same, subject to administrative charges, charged by lenders like Carfinco.

Mr. Bakir stated that there may be two bills of sale, with different amounts for trade-in and value of the vehicle. This is required if client such as KB shows a negative equity. The trade in and cost of vehicle come up in a negative amount. He gave an example: the vehicle owned is worth $10,000.00, the balance owing is $15,000.00, and the vehicle you wish to buy is valued at $20,000.00, this creates a negative equity of $5,000.00. In this case the selling price is bumped $5,000.00 and the trade in is bumped $5, 000.00. This satisfies the problem. This is an acceptable practice in virtually all financial institutions. This fact was corroborated by MG of Velvet Financing in her taped interview (Ex. 31).

On September 15, 2010, DC Amormino and Sgt. McCann executed search warrants at Big Three. They allegedly were looking for the PM files. The witness advised DC Amormino that if this was over the Lamborgini deal to contact OMVIC. He was ignored.

The business computers and files were seized and returned in February 2011. Charges were never laid.

Regarding the complainants in this matter, KB never owned the vehicle in question, his father did. KB Junior could not get financing so his father financed the vehicle.

Mr Bakir stated that he believed that his problems originated as the result of a dispute between the dealership (Big Three) and ST. ST knew the process for filing complaints against dealerships and that was to file through OMVIC. He chose not to do that.

He stated that often the cost of borrowing on the bills of sale were blank partly because of software issues. Their program “Evolution” was not totally compatible with that of the financial institutions. In addition, a lot was dependent upon when the payments began, i.e the middle of the month, as this could affect the interest calculation and ultimately the cost of borrowing. In any event, the financing documents revealed the costs and the bottom line on the financing documents were the same as the bills of sale.

He never had any complaints filed against him or his dealership from any of the financial institutions he dealt with. He always dealt with customers with honesty and integrity. The consumers involved with the police never approached him prior to this with any complaints. The exception was (KM) and her issue involved a mechanical matter.

Registrar’s Counsel did concede that there was no apparent fraud in relation to KDM in the relation to signing of documents.

In cross examination, Mr. Bakir stated that there were two bills of sale in many instances because the one bill of sale was in fact an offer sheet. In the case of the KB deal, he stated that two bills of sale were required because of the “negative equity issue”. The values had to be bumped up. When questioned why two signatures, he stated it was because there were two sets of values, but he maintained the bottom line was the same.

Mr. Bakir admitted that the signature on the second bill of sale was a photocopy from the first bill of sale. KB never actually signed the second bill of sale. He maintained that the parties were there and were aware of what was taking place.

With KB, he had them sign a blank bill of sale. He went on to state that there was a trust build up between them from previous dealings. He had no explanation as to why he photocopied the signatures on the KB bill of sale instead of simply having them sign it.

In a transaction involving DR, there are two bills of sale, same vehicle, different amounts. DR signed a blank bill of sale. Later, numbers were entered onto the bill of sale. The signature of DR was photocopied on to the second bill of sale. This was done, according to Mr. Bakir, because DR needed a bigger downpayment so the numbers changed. He explained that the blank bill of sale was probably signed by DR when he was in the dealership earlier. This was done on a base of trust.

He stated that both bills of sale would go to accounting; the bill of sale used is based on the financing document. Mr Bakir seemed at a loss to clarify this type of transaction, nor did he present any financing document, that he claimed was used to outline the financing part of the transaction. The cost of borrowing was never outlined in either of the bills of sale for DR.

In reply, Mr Bakir stated he did not shred the offer sheets (oftenthe second bill of sale) because he had nothing to hide. In his opinion, the consumers had no issue with the processes used in documenting the sales. He stated that this was based on mutual trust, a term he used often to describe this business practice of signing blank bills of sale by potential consumers..

HP

HP was an accountant at Big Three and Windsor Mitsubishi. She worked with, and for, Alex Bakir.

She testified that she worked closely with OMVIC representatives. The last site inspection she was involved in was at the Big 3, in the summer of 2011 when Carolynne Ethier from OMVIC attended and did a site inspection. At that time, Ms. Ethier examined the files at the Big 3. Staff cooperated fully and there were no irregularities.

HP testified that the customers always received their required paperwork upon delivery of the vehicle. She stated that it is not uncommon to shred certain documents as a form of file control. This avoids identity theft.

Her knowledge of Alex Bakir was that he was honest and acted with integrity in all his dealings. In fact, they had a number of repeat customers come back to see Alex. The police raid on the dealership and subsequent seizure of their computers virtually put the dealership out of business.

In cross examination, she stated she has never dealt with two separate bills of sale for one transaction.

JD

JD was previously employed at the Big 3 dealership as a sales manager. He worked for and reported to Alex Bakir. He described Mr. Bakir as an honest man who had a stellar reputation in the industry.

He described how sales were usually conducted. He would work up the deal but Alex looked after all the final aspects. Alex was always responsible for reviewing and finalising credit applications.

In his recollection, all sales contracts were signed and the cost of financing was included.

He remembered TD. He had come in originally to buy a truck. His financial situation was deplorable, only Carfinco would finance him. The cost was too high and the deal was not consummated. Approximately 6 months later, he returned to the dealership with his daughter to purchase a car for her. They picked out a car, but the credit was still bad. They all ended up in Alex’s office, where financing was arranged. TD got the vehicle and was happy.

JD never recalled a customer complaint about not receiving paperwork. The corporate culture towards regulatory oversight from agencies such as OMVIC was very positive.

He was present at the dealership when the police executed the three warrants. He stated initially the police took their surveillance cameras; he was curious as to why. The police subsequently took all of the company’s computers, including his personal laptop. This final action virtually put the dealership out of business.

After this, he was told by friends and family that they had been contacted by the police who were attempting to establish irregularities in deals. These individuals for the most part contacted him personally to advise of this fact.

In cross examination, the witness stated from his experience, customers never were asked to sign a blank bill of sale. In the bills of sale he dealt with, the cost of borrowing was always included. He did state that some financing arrangements were more complex and in these cases Alex would become involved. He stated that he didn’t think that copies of the final bill of sale would be mailed to customers, banks, yes.

Regarding the TD file, he stated he had no clue as to why the cost of borrowing was not on the bill of sale. JD stated that a credit sheet went to Alex Bakir with the other documentation surrounding the purchase. The witness admitted that the cost of borrowing could be affected in last minute negotiations.

THE LAW

Regarding the right to registration, the Act states:

Registration

6. (1) An applicant that meets the prescribed requirements is entitled to registration or renewal of registration by the registrar unless,

(a) the applicant is not a corporation and,

(i) having regard to the applicant’s financial position or the financial position of an interested person in respect of the applicant, the applicant cannot reasonably be expected to be financially responsible in the conduct of business,

(ii) the past conduct of the applicant or of an interested person in respect of the applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty, or

(iii) the applicant or an employee or agent of the applicant makes a false statement or provides a false statement in an application for registration or for renewal of registration;

(b),(c) REPEALED: 2004, c. 19, s. 16 (5).

(d) the applicant is a corporation and,

(i) having regard to its financial position or the financial position of an interested person in respect of the corporation, the applicant cannot reasonably be expected to be financially responsible in the conduct of its business,

(ii) having regard to the financial position of its officers or directors or an interested person in respect of its officers or directors, the applicant cannot reasonably be expected to be financially responsible in the conduct of its business,

(iii) the past conduct of its officers or directors or of an interested person in respect of its officers or directors or of an interested person in respect of the corporation affords reasonable grounds for belief that its business will not be carried on in accordance with the law and with integrity and honesty, or

(iv) an officer or director of the corporation makes a false statement or provides a false statement in an application for registration or for renewal of registration;

(e) the applicant or an interested person in respect of the applicant is carrying on activities that are, or will be if the applicant is registered, in contravention of this Act or the regulations, other than the code of ethics established under section 43;

(f) the applicant is in breach of a condition of the registration; or

(g) the applicant fails to comply with a request made by the registrar under subsection (1.1).

Refusal to register, etc.

8. (1) Subject to section 9, the registrar may refuse to register an applicant or may suspend or revoke a registration or refuse to renew a registration if, in his or her opinion, the applicant or registrant is not entitled to registration under section 6.

Conditions

(2) Subject to section 9, the registrar may,

(a) approve the registration or renewal of a registration on such conditions as he or she considers appropriate; and

(b) at any time apply to a registration such conditions as he or she considers appropriate.

Notice re: refusal, suspension, etc.

9. (1) The registrar shall notify an applicant or registrant in writing if he or she proposes to,

(a) refuse under subsection 8 (1) to grant or renew a registration;

(b) suspend or revoke a registration; or

(c) apply conditions to a registration or renewal to which the applicant or registrant has not consented.

REASONS and ANALYSIS

This hearing was the result of a Notice of Proposal (NOP) dated November. 17, 2011 issued by the Registrar seeking to revoke the registrations of Sahbi (Alex) Bakir as a motor vehicle salesperson and 1839583 Ontario Inc. o/a Big Star Auto as a motor vehicle dealer. The Registrar alleged that the past conduct of Sahbi Bakir violated section 6(1)(a)(ii) of the act which in part reads”.................and the past conduct of the Applicant affords reasonable grounds for belief that the Applicant will not carry on business in accordance with law and with integrity and honesty”.

Further, the Registrar was relying upon sec. 6(1)(d)(iii) of the Act to revoke the registration of 1839583 Ontario Inc. o/a Big Star Auto as a motor vehicle dealer. As Mr. Bakir was the sole shareholder at Big Star, his past conduct was the issue in relation to the NOP to revoke the registration of the dealership.

Alex Bakir worked as a business and finance manager at Big 3 Pre-owned Centre. He commenced employment at Big 3 in 2003 doing menial jobs. Mr.Bakir became registered as a motor vehicle salesperson April 7, 2005. At about this time, he became the business and finance manager at Big Three. Mr. Bakir has completed more than 3000 vehicle sales on behalf of Big Three.

The original NOP covered a number of allegations, involving several persons and dealerships. The other matters were resolved and this Tribunal was left to deal with the allegations against Mr. Bakir and Big Star Auto.

The Registrar’s allegations of improper conduct on the part of Mr. Bakir occurred during the period of time he was a salesperson and later the business and finance manager at Big 3 Auto. The focus of the Registrar narrowed down to vehicle purchases by three parties. These parties attended the hearing and gave direct evidence. The Registrar focused on the process used by Mr. Bakir and Big Three in the sales transactions with the three parties. The Registrar alleged that there had been improper conduct as a result of the way bills of sale were put together, applications for financing and whether or not clients had been given accurate information regarding their deals or were they deliberately misled. This included items such as what interest rate they agreed to pay and the term and monthly payments on their car loans. The final transaction in all cases was managed by Mr. Bakir.

Further, the Registrar alleges that Mr. Bakir misrepresented and deceived the financial institutions he dealt with on behalf of his clients by manipulating the values on the proposed bills of sale submitted to these institutions in order to obtain the required financing for his clients. The Registrar contends, in addition, that this type of conduct by Mr. Bakir violated section 27 of the Act which provides, “No Registrant shall furnish, assist in furnishing or induce or counsel another person to furnish or assist in furnishing any false or deceptive information or documents relating to a trade in a motor vehicle”.

The Registrar concentrated his evidence around transactions involving three consumers TD, RT, KB. These witnesses were the only consumers who actually gave evidence before the Tribunal.

The Applicant, for his part, disputed the allegations indicating that he conducted business in a fair and forthright manner. The Applicant contended that the manner which documents were presented for financing was in keeping with industry standards and quite acceptable to financial institutions .The Applicant gave evidence at the hearing as did two former employees of Big Three, JD and HP.

The Tribunal heard a lot of evidence over the fourteen days of the hearing. Much of that evidence as it turns out had scant value to the final focus of the Registrar’s case. What it did do was show a scattered or hit and miss process of investigation where suggestions of wrongdoing were put out there and left to hang. There was no follow-up evidence. The Applicant’s Counsel, in submissions, referred to a “shot gun approach” to this investigation by the police,. The Tribunal tends to agree. The majority of the evidence received at the hearing was from OPP DC. Sam Amormino. He was the lead investigator in a police criminal investigation into the activities, in part of Mr. Bakir and Big Three. This investigation was the catalyst for the proposed action of OMVIC to revoke Mr. Bakir’s registration and that of his dealership.

The Tribunal, after weighing all of the relevant testimony in this matter, concludes that the Registrar has not established that Alex Bakir acted in a manner that violated sec. 6 of the Act.

In reaching this conclusion, the Tribunal has considered a number of facts, set out as follows.

1. The Tribunal was impressed by Mr. Bakir’s record of having sold or been a principal in the sale of over 3000 vehicles all with no complaint from consumers. In fact, he had received compliments from previous clients (as stated in the evidence of JD).
2. There were no contemporaneous complaints made by any of the parties to anyone. All complainants before the Tribunal were induced by the police who had conducted an elaborate investigation into the activities of Big Three and the company principals which included Alex Bakir. The police also were responsible for a media release and a campaign to attract potential victims of alleged scams at the Big Three.
3. The extensive police investigation as previously stated is the catalyst for the allegations against Mr. Bakir, and must be addressed in some detail.
4. The Tribunal spent many days listening to police witnesses. The lead investigator DC. Amormino of the Essex County Ontario Provincial Police (OPP) gave several days of testimony. He was followed in less detail by Det. McCann of the Windsor City Police. The OMVIC Inspector, Mr. Spencer, had a very minor role in the initial investigation. The Tribunal never heard from previous OMVIC Inspectors such as Terry Hall who were responsible for the dealerships where Mr. Bakir worked at the time that the police investigation was underway.
5. Initially, the police conducted a Joint Forces Operation (JFO) with members of the OPP, Windsor City Police and the RCMP. It is noteworthy that the police operation led to the laying of a number of criminal charges against Mr. Bakir, all of which were dismissed by the Crown before the matters went to trial. In addition, the police executed several search warrants at the Big Three dealership and at the home of Mr. Bakir. From the dealership, files were taken along with computers and surveillance videos. Items such as surveillance videos still have not been released by the police. The seizures and Mr. Bakir’s arrest virtually put the dealership out of business. There was also wide spread publicity about the police involvement in the local media.
6. The police openly solicited alleged victims to come forward. In addition, an informant or associate of the police and as it turns out a business associate of DC Amormino directed persons who had their vehicles seized to see the police, specifically DC Amormino. This person ST was a bailiff and suggested to these persons that Big Three was under investigation and that their dealings with customers were suspect. These persons were given the impression that they may have been victims of criminal activity in the deals they made with Mr. Bakir.
7. The Applicant, from the outset, questioned why the OPP were the lead on an investigation that was clearly within the jurisdiction of the City of Windsor. DC Amormino’s explanation was that the OPP has jurisdiction everywhere. While that may be true, that is generally not the practice. OMVIC Inspectors were brought in towards the end of the investigation but had a limited role. This is of concern to the Tribunal because prior to the overt actions of the police, there had been no issues of concern to OMVIC Inspectors. In fact, OMVIC had conducted an inspection of Big Three in the summer of 2011. This was, from all indications, a positive inspection and the Tribunal heard no evidence to the contrary. The OMVIC Inspector involved in this inspection was never called to give evidence, nor were the inspection notes tendered as evidence.
8. This whole investigation has travelled a very convoluted route, beginning with a deal involving the financing of a Lamborghini vehicle that apparently did not involve Mr. Bakir directly. In addition, the Tribunal heard evidence regarding a number of deals that in the final analysis were not followed up by the Registrar.
9. One of these deals involved the bailiff ST and members of his family. ST was a main player in all of the matters brought before the Tribunal and appeared to be a “quasi informant’ of DC. Amormino. One of the principals in that particular deal we refer to was PM, ST’s father in law. It was suspected that PM’s signature on a bill of sale regarding a purchase he made from Mr. Bakir was forged. Information received at the hearing from DC. Amormino in his examination in chief was that handwriting samples from PM were sent to the Centre of Forensic Sciences and had come back as inconclusive. There were at least two submissions to the “Centre”. This later turned out not to be true. When DC Amormino later attended the hearing it was revealed in cross examination that in fact one of the handwriting samples had come back as “probable” as to PM’s signature. In other words, PM had probably signed the document in question. This evidence was not revealed by DC Amormino at his initial attendance at the hearing. The relevance of this is that it impacts directly on the credibility of DC Amormino and in fact reflects poorly on the integrity of the entire police investigation. That piece of evidence was crucial in establishing the credibility of Mr. Bakir in his dealings with PM. The police had initially alleged forgery on Mr. Bakir’s dealings with PM yet the evidence in possession of the DC Amormino would have put that suspicion at rest. However, the Tribunal was never made aware of this until much later in the proceedings.
10. The business association between DC Amormino and the bailiff ST is of concern to the Tribunal. Initially, DC Amormino had stated he had no personal associations with ST. Towards the end of the hearing, after he has completed testifying, he asked to come before theTtribunal again to clarify some of his earlier testimony relative to his association with ST. It turns out that this was more than a casual relationship. They were business partners in a company involved in financing vehicle repairs in the auto industry. DC. Amormino came to the Tribunal only after he had to reveal his business and associations to his employer. In the view of the Tribunal, this again negatively reflects upon the credibility of DC Amormino, the lead investigator in these proceedings.
11. The Applicant’s Counsel, in submissions, points out what he perceives as a bias on the part of the police that is passed on to the “lay” witnesses. The witnesses are given suggestions of anticipated wrongdoing, that they are in fact victims. This concern is shared by the Tribunal
12. The matter of financing became a critical factor in the hearing. There was conflicting evidence from some of the witnesses as to what interest rate they agreed to and terms of payment. The process to secure financing became a contentious issue when it applied to applications for financing for clients who showed a “negative equity”. The Registrar took the position that manipulating the amounts on the bill of sale to negate the optic of negative financing was evidence of deceit, even when the original bottom line in the transaction never changed. The Registrar went on to suggest that the information submitted to a particular financial institution in these cases was fraudulent and in fact constituted an offence under s. 27 of the Act.
13. The Tribunal heard evidence that “negative equity” is apparent when a client cannot show any equity when buying a vehicle, in other words after calculating the costs including any value from a trade in the client still has a negative balance, the debt from his previous vehicle as an example has not been satisfied. This was the case with KB. In his case, to offset the negative equity it was necessary to increase on paper the value of the vehicle he was to purchase also there was an increase in the trade in value for the vehicle he was trading in. There were two bills of sale for KB one with few numbers and a selling price of $32,900.00, the second one $39,900.00. The trade-in number increases on the second bill of sale but both have the bottom line number as $40,335.00. KB testified that the total balance of $40,335.00 was not printed on the bill of sale when he signed it. This evidence was contradicted by KB himself when he admitted in his statement to police that he had in fact signed the bill of sale for $40,335.00 and he further admitted this in cross examination at the Tribunal. The Tribunal is satisfied that KB was aware of what it was costing to purchase said vehicle and in fact had signed the document and agreed to the terms. The Tribunal is of the opinion that KB in his evidence was openly deceptive.
14. It is noteworthy that there was never a complaint received from any of the financial institutions on the way that Big Three or Mr. Bakir dealt with them on behalf of clients. There was never any indication from the financial institutions involved that Mr. Bakir or his staff had acted improperly in any way or at any time in the submissions of applications or the completion of deals for vehicle financing. This of course included deals where numbers had to be bumped up to negate “negative equity” on the part of some clients. Mr. Bakir, in his evidence, stated that the process of dealing with clients with “negative equity” by changing around the numbers is standard in the industry and widely accepted by financial institutions.
15. The Registrar chose not to call any evidence to explain the process of financing in the auto industry. There was no evidence called to support the Registrar’s allegations that the process used by Big Three and Alex Bakir to obtain financing for their clients was fraudulent and deceptive. DC Amormino, when asked about financing in the auto sector, stated he had no experience or knowledge about financing in the auto industry. The insight that he did have was obtained from a confidential informant who he refused to name.
16. The only information available to the Tribunal on the issue of financing in the auto sector was from the video statement of MG of Velvet Financing. She stated that lenders expect that outstanding equity issues are covered in the calculations presented to them. She is in the business of securing financing for persons attempting to purchase a vehicle who often do not have good credit. She does the same things as Mr. Bakir and Big Three were doing. She is emphatic in her taped interview that she cannot show negative equity and potential borrowers cannot own two vehicles, in other words the lien on the vehicle to be traded must be satisfied. To correct, this she has to bump up the numbers, increasing the sales price and correspondently, the trade in allowance. This erases the negative equity but does not change the bottom line price. This is, apparently, accepted policy in auto financing.
17. The Applicant submits and it is noted that MG is not and has not been the subject of a fraud investigation regarding her stated procedures in developing financing for clients.
18. The Tribunal did not accept MG as an expert in auto financing but as a person of some knowledge on the matter, offering some insight. The Tribunal realizes that the video evidence is hearsay and in accepting that evidence caution must be exercised. The Tribunal found this evidence to be of value in making its final decision in this matter. The Tribunal is of the mind that the probative value of this evidence far outweighs any prejudice to the parties and accepts this evidence which offers a small insight into the financing practices within the auto industry.
19. The Tribunal is satisfied that there was no improper conduct on the part of Alex Bakir in developing and processing of financial documentation to the various lending institutions he dealt with in the course of securing financing for his clients. There was no breach of s. 27 of the Act.
20. It is found by the Tribunal and admitted by Mr. Bakir that at times bills of sale were signed blank and that at times signatures were photocopied on to the final bills of sale. It is also found and admitted that on some of the bills of sale the cost of borrowing sections were not completed.
21. These matters are of concern to the Tribunal. Conducting business in this manner opens the door to possible abuse. It is a bad business practice and should be abandoned forthwith. Having said that, the Tribunal has to determine if these business practices as described were dishonest in nature and designed to defraud his customers or simply bad business practice?
22. The Tribunal reviewed, in detail, the evidence of the witnesses. It is noteworthy that all of the clients that the Tribunal heard from had extremely bad credit ratings and Mr. Bakir was the one of the dealers who could obtain financing for them. The witnesses, Mr. Bakir’s clients, at no point made any complaint to him at any point after their deals were consummated and they had their vehicles. Even after their vehicles were repossessed, they made no complaint or outcry to Mr. Bakir.
23. Mr. Bakir explained why, in some cases, on the bills of sale submitted, the “cost of borrowing” was blank. He stated that this cost could be affected because of when payments started i.e the beginning of the month or middle of the month. In addition, he explained that the software used to complete that area was not totally compatible. He had made that observation to OMVIC inspectors in the past. That evidence was not refuted.
24. It is the opinion of the Tribunal that had there been issues of impropriety on Mr. Bakir’s part or the dealership the clients involved in these transactions would have complained to someone, the dealership, Mr. Bakir, the financial institution or OMVIC. They did not. In fact, in over 3000 car deals there have been no formal complaints lodged with OMVIC in regards to improper conduct towards clients by Alex Bakir.
25. It is worthy of note that some of these witnesses stated in their evidence that Mr. Bakir misstated their interest rate, and in some cases the monthly payments. None of these people came to Mr. Bakir to complain when they allegedly realized that the terms were not what they recalled agreeing to. It is to be expected that there would be some complaint from these people, especially considering their particular financial situations, yet not a word until contacted by the police months and years later.
26. The witnesses that gave evidence before the Tribunal were, for the most part, educated adults; one was a Deputy Fire Chief in a large city fire department, earning a significant salary. Another was a business person whose father, the co-signer on his loan, was a former police officer. It is reasonable to anticipate that these individuals would have complained that they had been cheated, they did not.
27. The witnesses could not recall what they did or did not sign. They were vague as to their recollections of dealings with the financial institutions from which they had obtained their financing. In cross examination. it became clear that all of these witnesses could not recall clearly what they had signed, what they ultimately agreed to, and any timeline associated with their transactions with Mr. Bakir.
28. RT in his evidence and especially in cross examination was very vague on what he could recall, especially regarding what he originally agreed to for the interest rate with Mr. Bakir. He thought 24%, but when pressed on cross examination was not sure if that was ever agreed to by Mr. Bakir or whether Mr. Bakir simply going to attempt to obtain a loan at that rate. RT was close to bankruptcy when he made the deal with Mr. Bakir. He knew his financial situation was precarious and his interest rate would reflect that.
29. RT and his wife attended the Big Three and signed the bill of sale on January 14, 2009.
30. RT stated he attended the dealership at least 3 times before the deal was complete.
31. RT stated that it appeared to be his signature on the “Go Plan” application to Carfinco, the financing agent, dated January 16, 2009 (Ex. 7, p.9). He went on to state that he did not recall being at the dealership on that date, and that the interest rate and payments indicated on the document were much higher than he recalled agreeing to.
32. The vehicle was repossessed by Carfinco after payments missed in April and May, 2011. Up until that point, RT had maintained the payments. He surrendered the vehicle in July, 2011.
33. In cross examination, RT was vague as to whether or not he signed the “Go Plan” application for Carfinco.
34. In cross examination, he stated that knew after the first payment came out of the bank for $535.00, that the payment plan wasn’t going to be $350.00.
35. Throughout his testimony, RT was confused as to when he was at the dealership and what documents he signed. He agreed that he knew he would be dealing with Carfinco for financing.
36. RT, and all the witnesses for that matter, were vague on what dealings they had with their respective financial institutions regarding financing.
37. RT’s whole approach to financing appeared confusing to the Tribunal. He was intent on getting the vehicle and the Tribunal believes he did sign the necessary documentation to obtain financing. When Carfinco attempted to contact him when he was beginning to fall behind on his payments in 2011, he chose to ignore them. When the bailiff ST contacted him to repossess the vehicle, he simply drove it to the dealership and left it there.
38. In the opinion of the Tribunal, RT’s allegations of being duped by Mr. Bakir and the lender do not stand up to scrutiny. RT has displayed an air of inattention throughout the process and possessed a ”laissez faire” attitude towards his responsibility to repay the loan for his vehicle.
39. The Tribunal concedes that there may have been misinformation regarding RT’s history for the credit application (Ex.7 p.12). Nothing turns on this; some of the detail missing would have been a positive for RT. The Tribunal is of the opinion that this information may well have been compiled on this document from the lender and there was never evidence introduced to the contrary. Further the Tribunal doubts that RT paid a whole lot of attention to the document at the time of signing.
40. Mr. Bakir’s actions on the RT transactions were not improper.
41. TD was a high ranking professional firefighter. He had a poor credit rating hence attending at Big Three. He had been at Big Three previously, attempting to purchase a truck for himself. According to the evidence of JD, an employee of Big Three at the time, the deal was never consummated because TD could not secure financing. TD was angry and left.
42. TD came back to the dealership to purchase a vehicle for his daughter. He originally dealt with a salesperson and subsequently with Alex Bakir. There was confusion over two bills of sale, a typed and a hand written copy. TD conceded that the document with Alex Bakir’s signature, the typed document, was the final document.
43. TD admitted he signed the final bill of sale on February. 2, 2010. He further stated that the Carfinco financing document he signed had the same numbers on it as the bill of sale from the Big Three except for an additional $499.00 administration fee and a $5.00 OMVIC fee.
44. TD admitted the signature on the document from Carfinco (Ex. 19) is his, but he disputes the term of the loan: he thought it was 36 months, not 48 months. TD admitted to signing the Carfinco “Go Plan” document on February 3, 2010.
45. The Tribunal finds no wrongdoing on the part of Mr. Bakir or Big Three in this transaction. It does note a lack of due diligence on the part of TD.
46. The Tribunal heard from JD a former employee of Big Three and a subordinate of Alex Bakir. He was very positive in his descriptions of Alex Bakir’s work ethic and business acumen. He stated that all final transactions or bills of sale had the cost of borrowing on them. It was his recollection that there was never an occasion when a client would be asked to sign a blank bill of sale. He went on to state that there may have been occasions where cost of borrowing information could change and that would probably only be known by Alex Bakir. He stated he did not have access to the “Evolution” software package used by Big Three in developing the financing packages; Alex Bakir had access to this.
47. The Registrar, in submissions, points to the evidence of JD as proof that the deletion of “cost of borrowing” on bills of sale is clearly improper and never occurs. With respect, the Tribunal disagrees. JD could not have been involved in all the dealings that Mr. Bakir was involved in. The matters he was involved in were generally straightforward. Mr. Bakir, on the other hand, dealt with the more difficult matters, those involving Carfinco, when securing financing was beyond the expertise of JD. JD was not in a position to cite what processes the manager might incorporate in concluding such matters.
48. HP testified that when the final documents came to her all of the required documentation was filled in on the bills of sale.
49. The Tribunal, based on the evidence heard, is of the belief Alex Bakir had documents signed blank and transposed the signature, not to be deceptive, but in order to expedite the process. Mr. Bakir repeated over and over in his evidence that he believed this was based on trust between him and his clients and was never done for any improper use but in order to facilitate the process of getting financing for clients in less than ideal personal financial shape. The Tribunal has received no evidence which would indicate that Mr. Bakir profited from this type of dealing with his clients, except in the normal course of the car sale. There was never any contradictory evidence introduced that showed this type of business dealing on the part of Mr. Bakir offered any additional incentive to him, be it, financial or otherwise.
50. As previously stated, the Tribunal takes a dim view of the business practice of doing transactions where documents are signed in blank or signatures transferred by photocopy, regardless if agreed to previously or not. This practice should be discontinued immediately.
51. Mr. Bakir testified that dealings with lenders such as Carfinco were not in his best interest. That particular lender held twenty five percent of the principal back from the dealer until the majority of the debt was paid. The advantage to Mr. Bakir was that it got potential clients in the door.
52. The direct evidence from OMVIC inspectors was sparse. They never undertook an independent investigation but were of assistance to the police. There is little or no evidence before the Tribunal to suggest that Big Three and Alex Bakir were ever viewed as a problem to OMVIC inspectors exercising their oversight duties.
53. Based on the evidence heard by the Tribunal, it is of the opinion that if the matters it dealt with had come to the attention of OMVIC inspectors in the normal course of their inspections, the issues probably would have been dealt with in a less extreme fashion considering the overall record of the dealership and Mr. Bakir.
54. There were a number of transactions that were not pursued by the Registrar. The Tribunal has concentrated for the most part on those matters where the alleged victims appeared before it. Reference to transactions where no witness was available for cross-examination has not been considered by the Tribunal. To do so would result in undue prejudice to the Applicants.

Therefore, for the reasons outlined above, the Tribunal dismisses the allegations made against Alex Bakir and Big Star Auto.

The Tribunal thanks counsel for the Registrar, Mr. Osler, and for the Applicant, Mr. Liddle. Both counsel showed the utmost professionalism and cooperation through what was at times a difficult and complex hearing.

ORDER

Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the Registrar not carry out the Proposal.

LICENCE APPEAL TRIBUNAL

_________________________

Alex McCauley, Member

Released: September 19, 2013