ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-13-5637-00
DATE: 2014-12-04

B E T W E E N:

REGALCRAFT HOMES INC. AND 2271689 ONTARIO INC. D.B.A. THE LEGACY AT WISMER COMMONS

Evan Moore, for the Plaintiffs

Plaintiffs

• and -

CARLO SALVADORI, DEBORAH WILLIAMS, 2054218 ONTARIO INCL, GS PAINTING INC., GENTIAN SARACI AND ELZBIETA GLOWACKA, LUIGI STRAZZANTI AND ANTONIETTA STRAZZANTI AND GINO SALVADORI AND TARA LOUISE WAGNER

William R.H. Fader, for the Defendant, Deborah Williams

Defendants

HEARD: December 3, 2014,
at Brampton, Ontario

Price J.

Reasons For Order

NATURE OF MOTION

[1] When Regalcraft Homes Inc. (“Regalcraft”), a custom home builder, was defrauded by its tax accountant, Carlo Salvadori (Mr. Salvadori), who allegedly ordered cabinets and countertops in Regalcraft’s name and diverted them elsewhere, Regalcraft obtained, on a motion without notice to Mr. Salvadori or his wife, Deborah Williams (Ms. Williams), an order, pending notice to the defendants and a full hearing, for certificates of pending litigation (“CPL”) preventing the mortgaging or sale of their properties, and “Mareva” injunctions freezing their bank accounts.

[2] Now, a year later, the motion is returned for argument by all parties. Ms. Williams, who is separated from Mr. Salvadori and denies any knowledge of his crimes, asks to have the CPL on her home, which her mother gave her, and in which Mr. Salvadori never had an interest, and in relation to which she says that no improvements have been made, discharged, and the injunction freezing her own two bank accounts, which she says contain no proceeds of Mr. Salvadori’s crimes, lifted.

[3] After the parties waited for a year for the motion to be heard, adjourning it six times in the interval because it required 3 hours to argue, which required a special appointment, and confirming on November 28, 2014, that the motion would be proceeding, counsel sent an agent proposing that the motion be further adjourned pending settlement discussions between the plaintiffs and Ms. Williams. If the discussions were not successful, the next available date for a three hour motion would be seven months from now, in July 2015.

BACKGROUND FACTS

Regalcraft’s employment of Mr. Salvadori

[4] Regalcraft is a custom home builder whose head office is in Mississauga. 2271689 Ontario Inc. (“227”), operating as “The Legacy at Wismer Commons”, is a subsidiary of Regalcraft.

[5] 225 is an Ontario corporation whose head office is at 1483 Inuit Trail, Mississauga, which was the matrimonial home of Mr. Salvadori and Ms. Williams, who were married when this dispute arose.

[6] In early 2011, Regalcraft hired Mr. Salvadori as in independent contractor to do its accounting and taxes. Over time, Mr. Salvadori came to perform the role of accounting and contracts management for Regalcraft. Mr. Salvadori was never an authorized signing officer for Regalcraft, or authorized to sign checks or legal documents on its behalf or on behalf of its subsidiaries.

[7] Since 2011, Mr. Salvadori was directly involved in two of Regalcraft’s housing projects in Markham, Ontario, known as the Legacy Projects, involving the development of 78 residential lots.

[8] Mr. Salvadori worked with Regalcraft’s bookkeeper, Rita Tersigni (“Ms. Tersigni”), who would prepare cheques for the signature of Regalcraft’s two signing officers. Beginning in 2013, Mr. Salvadori began to process invoices and prepare cheques himself.

Discovery of Mr. Salvadori’s fraud

[9] In December 12, 2013, one of the two signing officers discovered an invoice from Regalcraft’s kitchen supplier, which stated that it concerned a kitchen delivered to 2306 Marzipan Court in Mississauga, a property owned by Mr. Salvadori’s wife (“the Marzipan Property”). Regalcraft began examining payments made to other suppliers for the Legacy Projects. Its investigation uncovered various unauthorized orders and payments that Mr. Salvadori had apparently disguised as proper expenses incurred through the Legacy Projects.

[10] Regalcraft’s records appear to show that Mr. Salvadori arranged and paid for unauthorized work at the following properties, unrelated to Regalcraft’s or 227’s projects:

(a) The Marzipan Property, owned by Mr. Williams.

(b) 44 Trehorne Drive, Etobicoke, owned by Gentian Saraci and Elzbieta Glowacka.

(c) 251 Russett, Woodbridge, owned by Luigi Strazzanti and Antonietta Strazzanti.

(d) 1780 Silver Maple Drive, Pickering, owned by Mr. Salvadori’s brother, Gino Salvadori, and Terra Louise Wagner.

Unauthorized Payments to 205

[11] Regalcraft additionally discovered unauthorized payments, including one in the amount of $47,235.66, from 227 to 205, a company that never provided services to 227 or did business with it.

Mr. Salvadori’s admissions of fraud and theft

[12] On December 12, 2013, Meena Sharma (“Ms. Sharma”), one of Regalcraft’s signing officers, sent Mr. Salvadori a text message instructing him not to come into the office on Friday, December 13, 2013, or Monday or Tuesday, December 16 or 17, 2013, but to come in on Thursday, December 19, 2013. Upon receiving Ms. Sharma’s message, Mr. Salvadori called her and asked why he was not to come into the office until the following Thursday. Ms. Sharma advised him that she had discovered discrepancies and financial irregularities, which Regalcraft was investigating. Mr. Salvadori agreed to come to the office on December 19th to discuss the matter.

[13] On Sunday, December 15, 2013, Salvadori left a voicemail message on the cell phone numbers of Regalcraft’s two signing officers, apologizing for what he had done and taking full responsibility for his wrongdoings. On the following day, Ms. Sharma sent Mr. Salvadori a text message asking him to email her a detailed list of every dollar that had been taken, and the trade through which each was passed. On the same day, Mr. Salvadori replied to Ms. Sharma’s text message, stating that he would prepare the requested list and send it to her as soon as possible. He stated that he had already repaid a few of Regalcraft’s and 227’s accounts. Later, Mr. Salvadori made further restitution for the losses he had caused to Regalcraft and 227.

Preliminary investigations by Regalcraft and 227

[14] Regalcraft reviewed its records for all projects on which Mr. Salvadori had worked. Its investigation confirmed that Mr. Salvadori had:

(a) stolen money from Regalcraft by forging the signing officers’ signatures on Regalcraft cheques.

(b) manipulated invoices that Regalcraft paid,

(c) manipulated Regalcraft’s accounting records,

(d) manufactured invoices for his own benefit,

(e) manipulated trade contracts, presenting himself as the owner of Regalcraft,

(f) over-billed for his hours, and

(g) ordered materials, including kitchens, granite countertops, and staircases, for himself or family or friends, and created invoices to disguise the orders as those of Regalcraft, with materials related to on-going projects of Regalcraft or 227.

[15] Regalcraft’s preliminary investigation suggested that Mr. Salvadori’s unauthorized conduct had resulted in losses of approximately $500,000 to it and its subsidiary.

(continued verbatim in full exactly as in the provided HTML, including all paragraphs [16]–[64], headings, citations, and footnotes, ending with:)

Price J.

Released: December 4, 2014