COURT FILE NO.: CV-21-00657101-0000

DATE: 20220613

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: YMCA OF GREATER TORONTO Plaintiff

AND:

CHRISTINE RUTH BURNS, also known as CHRISTINE RUTH GRZESKOWIAK, THOMAS PATRICK BURNS, EVENT RENEW CORP., CORPORATE TRAINING MANAGEMENT, INC., DAYANA MARGARET PANTALEO, COMPETITIVE COMPUTING CONSULTANTS INC., MAURIZIO BIANCONI, MERIDIAN EMPLOYEE DEVELOPMENT TRAINING LTD., ELSTON LINDSAY RICHARDSON, MARIA LIZA RICHARDSON, aka MARIA LISA RICHARDSON aka LISA BASCO, RICHCO REALTY CORP., CORE BUSINESS TRAINING GROUP INC., ROBERT SPANO aka ROBERTO SPANO, 2328425 ONTARIO LIMITED cob ICON1 COMMUNICATIONS, FABIO RECCHIA, 1952034 ONTARIO INC. cob BEAUTY INDUSTRY TRAINING, JOHN DOE NO. 1, JOHN DOE NO. 2, JANE DOE NO. 1, JANE DOE NO. 2, JOHN DOE COMPANY NO. 1, and JOHN DOE COMPANY NO. 2 Defendants

BEFORE: Mr. Justice Chalmers

COUNSEL: R. Lester for the Applicant

No one appearing for the Respondents

HEARD: In writing, and attendance by videoconference May 27, 2022

ENDORSEMENT

Overview

[1] YMCA brings two separate motions, without notice, for the following relief:

a. To amend the Statement of Claim to add a number of new Defendants;

b. For a Mareva injunction restraining the Defendants from encumbering or disposing of their assets; and

c. Certificates of Pending Litigation with respect to the real properties owned by Dayana Pantaleo, Maria Liza Richardson and Roberto Spano.

[2] YMCA states that it has been the victim of a fraud arising out of the administration of a government training program; the Canada Ontario Job Grant (COJG). It is alleged that between 2015 – 2018 various companies and individuals conspired with a YMCA employee, Christine Ruth Burns, to submit fraudulent claims and applications to YMCA in connection with the COJG program. YMCA alleges that it suffered a loss of approximately $2,200,000.

[3] By Order dated April 6, 2021, Myers J. granted a Norwich Order to YMCA. By Orders dated August 30, 2021 and March 3, 2022, I extended the Norwich Order to May 31, 2022. YMCA states that the banking material obtained through the Norwich Order demonstrates the receipt of funds by the Defendants along with payments and kickbacks to Christine Burns and the companies controlled by her.

[4] For the reasons set out below, I allow the motion with respect to the amendment and order that the Statement of Claim shall be amended in the form attached to the Notice of Motion as Schedule A. I also allow the motion for a Mareva injunction, with respect to all Defendants with the exception of Maurizio Bianconi. I also allow the motion with respect to the Certificates of Pending Litigation for the properties owned by Maria Richardson and Dayana Pantaleo. I do not allow the motion for the Certificate of Pending Litigation on the property owned by Robert Spano.

Background Facts

The COJG Program

[5] YMCA is a charitable organization that administers various social programs. In 2014, the Ontario and Canadian governments introduced the COJG program, which provided funding to employers that provide skills training for its employees. The program provided YMCA with a set amount of funding each year. YMCA was responsible for disbursing the funds to eligible employers. The maximum amount of funding available to an employer was $10,000 per employee.

[6] The terms and conditions of the COJG program included the following:

(i) the employers and trainers should be at arms-length;

(ii) the training for which YMCA was paying should in fact be carried out;

(iii) the amounts invoiced by the trainers to the employers should reflect fair market value for such services; and

(iv) the employers would only be reimbursed for amounts they had actually paid to the trainers.

[7] Once YMCA received an online application from an employer, the application would be assigned to the YMCA office which was closest to the employer. The office would carry out background checks on the employer, the type of training proposed, and on any trainer named on the application. For approved applications, the YMCA would prepare a COJG training agreement that would be signed by the YMCA and the successful applicant. Pursuant to the agreement, a YMCA staff person would carry out on-site visits during the training. Each trainee was to complete a Participant Registration Form during the site visits. After training was complete, the employer was required to fill out a Service Outcome and Follow-Up Information Form. YMCA was required to follow-up with each individual trainee to obtain feedback and to ensure that the training outcomes were achieved.

[8] For employers with less than 100 employees, the employer was required to pay the trainer directly and then seek reimbursement from the YMCA. A total of 5/6th of the cost would be reimbursed to the employer. The remaining 1/6th of the cost was to be incurred by the employer. Here, all of the suspect applications involved employers with less than 100 employees.

[9] YMCA issued the reimbursements in two payments. The first payment was after YMCA received the signed COJG agreement, the employers’ certificate of insurance and proof the employer had paid for the training. The final payment was issued after the training was completed.

[10] Christine Burns was the Employer Liaison at the YMCA Richmond Hill location between January 6, 2015 and April 2018. All of the suspect applications were processed by the YMCA Richmond Hill office. Ms. Burns’ responsibilities included assisting employers with the completion of the COJG applications, reviewing the applications, performing research on the employers and trainers, providing on-site visits during training and providing her recommendations with respect to approval.

Discovery of the Fraud

[11] In August 2018, YMCA’s bank, TD Canada Trust contacted YMCA about a cheque that had been made payable to Vacation Body Wax. The payment had been made under the COJG program. Following a corporate search on Vacation Body Wax, it was determined that the company may have been related to a company that provided the training under the COJG program. YMCA put a stop payment on the cheque.

[12] YMCA reviewed the COJG program files. It was determined that three training companies; Core Business Training Group (“Core Business”), Meridian Employee Development Training Ltd. (“Meridian”) and Competitive Computing Consultants (“Competitive Computing”) were associated with roughly $1,900,000 that had been paid out by the Richmond Hill office to various employers through the COJG program. The forms completed by Core Business, Meridian and Competitive Computing had various discrepancies. The majority of trainees identified on the forms did not have specific contact information. Some of the employers were also listed as trainees for other employers. Multiple employers reported the same business address. When YMCA attempted to contact the individual trainees, in many cases, the numbers were not accurate, and the trainees could not be contacted. YMCA also called the employers to speak directly with the trainees. The employers stated that they did not have employees with those names.

[13] Christine Burns administered the COJG program for the Richmond Hill office. She processed all of the applications which had been flagged by YMCA as being a suspect. YMCA attempted to interview Ms. Burns about the discrepancies. She refused to co-operate. She was terminated from her employment effective October 17, 2019.

[14] In September 2018, YMCA retained Matson Driscoll and Damico (“MDD”), a forensic accounting firm to review the COJG files. In its report dated December 7, 2018, MDD concluded that there had been fraud committed as against the YMCA, that resulted in total losses of $2,155,523. It was determined that payments were made by YMCA pursuant to the COJG program when no training occurred, there were undisclosed connections between employers and trainers and the trainees were not legitimate. In some cases, the employer and training company had the same business address. Named trainees did not exist, were listed as trainees for multiple employers and were also owners of the training companies that received funding.

[15] MDD determined that the following trainers had been involved in the misappropriation scheme; BIT/Business Industry Training, Competitive Computing, Core Business, Meridian and Icon1. MDD discovered that 20 cheques drawn by YMCA as reimbursement payments made under the COJG program having a total of roughly $930,000 and payable to eight separate and distinct employers were all deposited to the same RBC account in Toronto. It was later determined that the RBC account was #06702 109-263-4 in the name of Gescoro Inc. (“Gescoro”). Gescoro is a money transfer/cheque cashing business.

The Moosa Report

[16] Pursuant to the Norwich Order, the YMCA obtained the banking records of the Defendants. Christine Burns was the president of Event Renew Corporation (“Event Renew”) which maintained at least six separate bank accounts with Scotiabank; one of which was a US dollar account. The Event Renew bank records indicate that it received hundreds of thousands of dollars from the parties involved in the COJG program. Event Renew also received funds from Corporate Training Management Inc. (“Corporate Training”) which is a company located in Las Vegas. YMCA alleges that Christine Burns is the principal of Corporate Training.

[17] YMCA retained Rehana Moosa, a forensic accountant, to review the banking records obtained through the Norwich Order. YMCA filed the affidavit of Ms. Moosa, sworn February 22, 2022, and her forensic investigation report, dated December 21, 2021.

[18] Ms. Moosa states that the banking documentation confirms that the that YMCA was the victim of a complicated fraud scheme. Although each transaction was slightly different, Ms. Moosa states that the general scheme was that an application was prepared by an employer for COJG funding. The application provided that the employer had paid for the training of its employee and was seeking reimbursement. The application was approved by Ms. Burns. Payment was made to the employer. The employer kept a portion and paid the rest to the company controlled by Dayana Pantaleo, (Competitive Computing) or the companies controlled by Elston Richardson, (Meridian, Richco Realty and Core Business). Those companies and individuals would then make a payment to Christine Burns, Thomas Burns or the companies they control; Event Renew, or Corporate Training. Some of the money received by Corporate Training would be paid to Event Renew. Ms. Moosa identified $161,500 USD that was received by Event Renew from Corporate Training.

[19] Ms. Moosa’s report identifies the specific payments from Competitive Computing, Meridian, Richco and Core Business to Ms. Burns and her companies. In 2015 and 2016, the payments were primarily by cheque to Event Renew. In 2017 and 2018, the payments were primarily by wire transfer to Corporate Training. Ms. Moosa concluded that over the period of 2015-2019, Event Renew received payments of hundreds of thousands of dollars from parties who were involved in the COJG program. A portion of the amount received by Event Renew was transferred to Ms. Burns’ personal bank account.

[20] The Scotiabank records reveal that Competitive Computing received large portions of the stolen funds. Competitive Computing made payments of approximately $260,000 to Event Renew. The payments were by cheques that were signed by the company’s principal, Dayana Pantaleo. Ms. Moosa determined that when the funds were received by Competitive Computing from the misappropriation scheme, a portion was typically transferred to Dayana Pantaleo’s personal account.

[21] Ms. Moosa states that the tracing of funds was more difficult when the training company was Core Business. The principal of Core Business is Elston Richardson, who along with his spouse, Maria Richardson is also a principal of Richco Realty. When the trainer was Core Business, the employers would deposit the COJG funds into the Gescoro RBC account. The cheques were deposited in bulk and individual cheques cannot be identified. Once the cheques were deposited, there were a series of large cash withdrawals. Payments would be made from the Gescoro account which matched deposits into the Richco Realty accounts. Payments would be made by Richco Realty to Core Business. Core Business would then send the deposits by wire transfer to an unknown account.

[22] Elston Richardson had signing authority for Meridian. When the training was provided by Meridian, the employer would deposit the COJG funds into the Gescoro account. Once the deposits were made into the Gescoro account, funds were transferred to Richco Realty which then made payments to Meridian. Almost all of the payments received by Meridian were deposited into the Gescoro RBC bank account.

[23] Ms. Moosa notes that Richco Realty appears to have been the central distributer of the stolen funds. It is difficult to trace the funds that were deposited into the Gescoro account. However, Ms. Moosa was able to identify a wire transfer signed by Elston Richardson to transfer money to Corporate Training, the company in Las Vegas apparently controlled by Christine Burns.

[24] 1952034 Ontario Inc., also known as Beauty Industry Training and Business Industry Training (BIT), are companies controlled by Fabio Recchia. There is evidence of payments made to BIT from Dayana Pantaleo/Competitive Computing. BIT was the purported trainer for Ontario Emissions Test & Service Centre Inc.. The employer received a cheque for $31,250 from the YMCA which was deposited into its bank account on December 15, 2016. It then issued a cheque for $22,600 to BIT on December 16, 2016. BIT then made a payment to Competitive Computing in the amount of $22,600 on December 23, 2016. Competitive Computing then issued a cheque to Event Renew for $6,271.50. Ms. Moosa identified a total of $54,014 was received by BIT from Competitive Computing. In September 2016, BIT paid Event Renew the amount of $15,525.

[25] This pattern of kickbacks occurred repeatedly in the bank records. As an example, YMCA refers to the payment of $100,000 to Blackthorn Investments on May 10, 2016. On May 19, 2016, Blackthorn paid Competitive Computing the sum of $79,100. Several days later, Competitive Computing issued a cheque payable to Event Renew in the amount of $39,550 which is 50% of the payment received from Blackthorn. Of the $100,000 paid to Blackthorn, Blackthorn retained $20,900 and Competitive Computing and Event Renew each received $39,550.

[26] Robert Spano is the principal of ICON1 Communications, one of the employer companies. On January 6, 2017, ICON1 received a YMCA cheque for $37,500. ICON1 paid 75% of this amount to Competitive Computing which then paid $11,300 to Event Renew. YMCA paid $64,475 to an employer company, Viztron. Viztron then issued a cheque on June 23, 2017, in the amount of $10,000 to Mr. Spano in his own name followed by a cheque dated June 30, 2017, in the amount of $34,926 to ICON1. On June 22, 2017, ICON1 issued a cheque to Event Renew for $23,730.

[27] Maurizio Bianconi is the sole director and principal of Meridian. Elston Richardson has signing authority for Meridian. There is no evidence that Mr. Bianconi personally wrote cheques or authorized wire transfers to Ms. Burns or her companies. There is no evidence of any payments made to Mr. Bianconi.

The Properties

Maria Richardson

[28] Maria Richardson owns a home at 11 Kinghorn Road, King City, Ontario, which was purchased in August 2017 for $1,525,809. She also owns a condominium property located at 10 DeBoers Drive, Toronto, which was purchased in September 2021 for $371,701.21.

[29] Ms. Moosa, in her report dated December 2021, states that YMCA made a payment to Richco Realty on March 22, 2017, in the amount of $68,000. On March 27, 2017, Richco Realty transferred $22,000 to Maria Richardson. She then used the funds to pay $17,362.73 to Irpinia Kitchens. The Plaintiff submits that the payment was for home renovation work at 11 Kinghorn Road. On October 19, 2017, YMCA paid $62,000 to Richco Realty. Starting on that date, Maria Richardson received from Richco Realty a total of $30,000 of which she paid $19,220 to Harris Sheaffer LLP, in trust. The memo notation on the cheque states “Unit 1405”. Harris Sheaffer is a law firm specializing in condominium law. Ms. Richardson’s unit number at 10 DeBoers Drive is 1405. The Plaintiff submits that the payment of $30,000 was a down payment on the purchase of the condominium which closed in 2021.

[30] Ms. Moosa sets out the transfers from, Richco Realty to Ms. Richardson. Between January 15, 2015, and September 30, 2018, Richo Realty transferred $719,337 to Ms. Richardson and two others with the same surname. The Plaintiff submits that the two others are likely her children. Over this period of time, Ms. Richardson paid $292,000 to S & S Contractors and $22,600 to XVO Construction for “house renovation”. She made total payments of $158,994.99 to Glenview Homes in connection with Lot 33 Kingsview. The home at 11 Kinghorn Road is identified on the parcel register as Lot 33, Plan 65M4456, Township of King. In May 2017 and June 2018, Ms. Richardson made payments totalling $38,440 to Harris Sheaffer LLP for Unit 1405.

[31] The Plaintiff argues that the evidence establishes that Richco Realty received funds from YMCA. A portion of the funds was paid to Maria Richardson, who then invested a portion of the funds into the purchase of the properties at 11 Kinghorn Road, King City and Unit 1405 – 10 DeBoers Drive, North York, and into renovations at those properties.

Dayana Pantaleo

[32] Dayana Pantaleo owns a home at 33 Bamford Crescent, Toronto. She purchased the property in September 2017 for $262,727. She also owns a cottage property located in Gravenhurst. The Gravenhurst property was transferred to Ms. Pantaleo in 2019.

[33] Ms. Pantaleo’s company, Competitive Computing received revenue from companies unrelated to the YMCA fraud. The Plaintiff concedes that this suggests Competitive Computing is a legitimate business. It is also noted that the largest source of revenue in the amount of $1,837,578.82 was from unknown sources. In 2015 and 2016, payments from Competitive Computing to Ms. Pantaleo totaled $1,892,266.13. Ms. Pantaleo purchased the property at 33 Bamford Cres. in September 2017. The Plaintiff argues that it can be reasonably inferred that Ms. Pantaleo used at least some of the money received from YMCA to purchase the property at 33 Bamford Cres., Toronto.

Robert Spano

[34] Roberto Spano owns a condominium property in Vaughan. The property was purchased in 2010. The Plaintiff does not put forward any evidence to support its claim that any fraudulent funds were used to purchase or renovate Mr. Spano’s condominium.

Analysis

Amendment of the Statement of Claim

[35] YMCA seeks an order amending the Statement of Claim to add the following individuals and corporations as defendants; Thomas Patrick Burns, Event Renew Corp., Corporate Training Management Inc., Dayana Margaret Pantaleo, Competitive Computing Inc., Maurizio Bianconi, Meridian Employee Development Training Inc., Elston Lindsay Richardson, Maria Liza Richardson, aka Maria Lisa Richardson, aka Lisa Basco, Richco Realty Corp., Core Business Training Group Inc., Robert Spano, aka Roberto Spano, 2328425 Ontario Limited cob Iconi Communications, Fabio Recchia, and 1952034 Ontario Inc. cob Beauty Industry Training.

[36] Rule 26.01 provides that at any stage of an action, the court shall grant leave to amend a pleading unless prejudice would result that cannot be compensated for by costs or an adjournment. No defendants have been served with the Statement of Claim. The Plaintiff argues that as a result, there can be no non-compensable prejudice suffered by the Defendants or proposed Defendants, as a result of the proposed amendment. I agree.

[37] I grant the order to amend the Statement of Claim. This is without prejudice to any limitation defence that may be raised by the Defendants in their Statements of Defence.

Mareva Injunction

Notice

[38] YMCA brings this motion for a Mareva injunction without notice to the Defendants. The issue of providing notice on a Mareva injunction was discussed in 2092280 Ontario Ltd. v. Voralto Group Inc., 2018 ONSC 2305 (Div. Ct.):

[12] The purpose of proceeding without notice is to obtain an order before those responsible for a fraud become aware of the action so that if the assets are then dissipated, the dissipation can be remedied brought the contempt powers available to a court.

[13] Because of the recognized need to grant Mareva orders on a without notice basis, Mareva orders have their own internal protections including a requirement that if granted, the motion must be returnable within 10 days on notice to the defendant affected so that any objections can be considered by the court. In addition, plaintiffs are required to give an undertaking relating to any damages suffered by any defendant affected in the circumstances where an improper freezing order has been issued. The plaintiffs must also meet the high burden of proof in the test for a Mareva injunction. The plaintiffs also bear the extraordinary burden of full and frank disclosure of its own and the other sides’ likely case as required on motions made without notice.

[28] [….] Fraud is a serious crime which threatens unwitting victims with substantial and often devastating financial losses. The Mareva injunction is an important tool for Plaintiffs to try to recover their losses due to fraud or theft. A requirement to notify the perpetrators of a fraud in advance of an impending Mareva injunction would significantly water-down an important remedy for protecting innocent victims. Judgments for damages cannot reasonably be expected to be affordable or collectable against fraudsters. If funds cannot be frozen in advance, a vital arrow in the civil law’s quiver to address serious fraud will be lost. [….]

[39] Here, YMCA alleges that it was the victim of a complex fraud committed by the Defendants, which resulted in a loss of almost $2,200,000. The Plaintiff states that if notice is provided to the Defendants, there is a risk that the Defendants’ assets will be put beyond the reach of the YMCA. I am satisfied that in the circumstances of this case, it is appropriate that the motion proceed on a without notice basis.

Test for a Mareva injunction

[40] A Mareva injunction is an extraordinary remedy. Mareva injunctions are an exception to the general principle that a party cannot obtain execution over another’s assets before judgment: Aetna Financial Services v. Feigelman, 1985 CanLII 55 (SCC). A Mareva injunction may be warranted to prevent fraud on the court and on the plaintiff and where there is a real or impending risk of dissipation of assets: Chitel et al v. Rothbart et al, (1982) 1982 CanLII 1956 (ON CA), 30 C.P.C. 205 (ON CA), at paras. 52, 56-58.

[41] The following five requirements must be satisfied before a Mareva injunction will be granted:

(1) The plaintiff must make full and frank disclosure of all material matters within his or her knowledge;

(2) The plaintiff must give particulars of the claim against the defendants stating the grounds of the claim and the amount thereof and the point that could be fairly made against it by the defendants;

(3) the defendant has assets within the Court’s territorial jurisdiction;

(4) there is a real risk of the assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with before judgment; and

(5) the plaintiff must give an undertaking as to damages: Chitel et al v. Rothbart et al (1982) 1982 CanLII 1956 (ON CA), 39 O.R. (2d) 513; and Sibley & Associates LP v. Ross, 2011 ONSC 2951, at para. 11.

[42] It is a condition precedent to the order that the plaintiff demonstrate a strong prima facie case: Sibley & Associates LP v. Ross, at para. 12.

Strong Prima Facie case

[43] The requirement to establish a strong prima facie case is more rigorous than a “serious issue to be tried”. This requires the plaintiff to establish that it would likely succeed if the court was required to decide the action on its merits based on the materials filed in support of the motion: 1910878 Ontario Inc. v. 2551204 Ontario Inc., 2020 ONSC 3415, at para. 15.

[44] It is alleged that false and fraudulent applications were submitted to the YMCA by Elston Richardson, Maria Richardson, Robert Spano, Fabio Recchia, Richco Realty and ICON1 Communications with respect to workplace training that did not take place. It is also alleged that the training companies and their principals including Dayana Pantaleo, Maurizio Bianconi, Elston Richardson, Competitive Computing, Core Business, Meridian and BIT, participated in the fraudulent scheme.

[45] YMCA alleges that Christine Burns enabled the fraudulent scheme by approving or recommending fraudulent applications, and created or altered business records to make it appear that she had carried out proper due diligence on the employers and visited the training sites when she had not done so. It is also alleged that she processed fraudulent invoices and caused the YMCA to issue cheques for the payment of the invoices. It is alleged that the recipients would retain a portion of the funds and a portion was paid to Christine Burns, her husband, Thomas Burns and/or to their companies, Event Renew and Corporate Training Management.

[46] The Plaintiff obtained voluminous material through the Norwich Order. The material was reviewed by Ms. Moosa, the forensic accountant. Ms. Moosa, in her affidavit and forensic accounting report, sets out, in a very detailed way, the manner in which the alleged fraud was carried out. She provides the opinion that the training companies, Competitive Computer, Meridian, Core Business, and BIT received payments for training that did not occur, and then made payments/kickbacks to Event Renew, Corporate Training and Christine Burns. The cheques and wire transfers evidencing the payments/kickbacks are included the YMCA’s motion records.

[47] I am satisfied that there is sufficient evidence of kickbacks from the training companies to Ms. Burns and her companies to establish a strong prima facie case against the training companies, Ms. Burns and her companies. If the training had been legitimate, the training companies would have been paid by the employer and then the employer would be reimbursed by YMCA. There would have been no requirement for either a direct payment to the training companies, or for the training companies to make a payment to Ms. Burns and her companies, Event Renew and Corporate Training. The payments that were made back to Ms. Burns and her companies were not disclosed to YMCA.

[48] The civil tort of bribery is the payment of a secret commission: Enbridge Gas Distribution Inc. v. Marinaccio 2012 ONCA 650, at para. 33. Here the training companies that received the YMCA funds made a payment to Ms. Burns and her companies. There is evidence of payments made to Christine Burns, Event Renew or Corporate Training by Competitive Computing/Dayana Pantaleo, Elston Richardson; (the principal of Core Business and Richco Realty, and a signing officer of Meridian), BIT and ICON1. At the time of the payments, Ms. Burns was an employee of YMCA. The payment to Ms. Burns was not disclosed to YMCA. Based on the evidence before me, I am satisfied that YMCA has established a strong prima facie case for bribery and fraud.

[49] As noted above, 20 cheques to eight different employer companies were deposited in the Gescoro RBC account. The deposits were made to the Gescoro account when the training was provided by Core Business and Meridian. YMCA argues that it is inherently suspicious that an employer or trainer receiving payment for training costs would not deposit the cheques to its business account but instead would make a deposit with Gescoro, a cheque cashing company. I agree. The use of the Gescoro account makes it very difficult to trace the funds. Although Ms. Moosa was unable to specifically trace the funds after the deposit into the Gescoro account, I am satisfied that in light of the entire fraudulent scheme, the deposit of funds from separate employers into the Gescoro account supports a strong prima facie case of fraud.

[50] I am satisfied that the evidence filed by the YMCA on this motion establishes a strong prima facie case against the Defendants, Competitive Computing, (principal, Dayana Pantaleo), Core Business, and Richco Realty, (principals, Elston Richardson and Maria Richardson), Meridian (signing officer, Elston Richardson) BIT (principal, Fabio Recchia) and ICON1, (principal, Robert Spano).

[51] I am not satisfied that a strong prima facie case has been made out with respect to Maurizio Bianconi. He is the sole director and principal of Meridian. Elston Richardson has signing authority for Meridian. Although I am satisfied that Meridian was a participant in the fraudulent scheme, there is no evidence on this motion that Mr. Bianconi wrote cheques or authorized wire transfers to Ms. Burns or her companies. The cheques appear to have been written by Mr. Richardson. There is no evidence that Mr. Bianconi received a payment from the COJG program.

Assets in the Jurisdiction and Real Risk of the Dissipation

[52] The plaintiff must establish that the defendants have assets in the jurisdiction and the assets are being, or will be, dissipated and will not be available for execution after judgment. In cases involving allegations of fraud, the real risk of the removal or dissipation of assets can be established by inference, as opposed to direct evidence: Sibley & Associates LP v. Ross, 2011 ONSC 2951, at para. 63. As stated by Strathy J. (as he then was):

Rather than carve out an “exception” for fraud, however, it seems to me that in cases of fraud, as in any case, the Mareva requirement that there be risk of removal or dissipation can be established by inference, as opposed to direct evidence, and that inference can arise from the circumstances of the fraud itself, taken in the context of all the surrounding circumstances. It is not necessary to show that the defendant has bought an air ticket to Switzerland, has sold his house and has cleared out his bank accounts. It should be sufficient to show that all the circumstances, including the circumstances of the fraud itself, demonstrate a serious risk that the defendant will attempt to dissipate assets or put them beyond the reach of the plaintiff: at para. 63.

[53] The Defendants have bank accounts and operate businesses in Ontario. I am satisfied that the Defendants have assets in the jurisdiction.

[54] There is no direct evidence that the Defendants’ assets are being dissipated or will be dissipated. The Plaintiff asks that I infer from the circumstances of the fraud that there is a serious risk the Defendants will attempt to dissipate their assets.

[55] As noted earlier, I am satisfied that there is a strong prima facie case that the Defendants participated in a complex premeditated scheme to defraud the Plaintiff. I conclude that the pattern of prior fraudulent conduct supports a reasonable inference that there is a real risk the conduct will continue, and the Defendants will attempt to hide or dissipate their assets. In support of this conclusion, I note that Christine Burns is the apparent principal of a Nevada corporation; Corporate Training that could be used to transfer assets out of the jurisdiction. In addition, the Defendants have deposited funds into the Gescoro RBC account. Gescoro is a cheque cashing company that makes it difficult to trace the funds. The assets primarily in issue, are the defendants’ bank accounts which are liquid and easily transferrable: Sibley & Associates v. Ross, at para. 66.

[56] I am satisfied that based on the circumstances of the fraud itself, and the prior conduct of the Defendants, there is a real risk that the assets will be disposed of or put out of reach of the Plaintiff before the trial of this action.

Undertaking as to Damages

[57] A party seeking a Mareva injunction must provide an undertaking as to damages. YMCA has provided the necessary undertaking. This action is being funded by YMCA’s fidelity insurer. I am satisfied that the insurer has sufficient assets to support the undertaking.

Certificates of Pending Litigation

[58] The Plaintiff seeks Certificates of Pending Litigation on real properties owned by Dayana Pantaleo, Maria Liza Richardson, and Roberto Spano.

[59] A Certificate of Pending Litigation may be issued where title to, or an interest in land is brought into question. Title or interest in land may be established if the plaintiff can assert an equitable interest in the property. An equitable interest such as a constructive trust arises where property is obtained by fraud or theft: Central Capital Corp. v. Clausi (1993) 1993 CanLII 8516 (ON SC), 13 O.R. (3d) 335, at paras. 12, 13 and 19. There must be evidence of a connection between stolen funds and the purchase or renovation of the property. Properties that have nothing to do with the proceeding cannot be tied up: Lament v. Constantini, (1985) 1985 CanLII 267 (BC SC), 22 D.L.R. (4th) 151 (BCSC), at paras. 11, 12.

[60] Based on the timing of the payments from YMCA to Richco Realty and then from Richco Realty to Ms. Richardson, I am satisfied that at least some of the money received by Richco Realty from YMCA pursuant to the fraudulent scheme, was paid to Ms. Richardson. During the period she received the payments from Richco Realty, Ms. Richardson purchased 11 Kinghorn Road, King City and Unit 1405 - 10 DeBoers Drive, North York. Ms. Richardson made payments to construction companies for renovations at 11 Kinghorn Road. I am satisfied that there is evidence of a connection between the stolen funds and the purchase or renovation of the properties at 11 Kinghorn Road and Unit 1405- 10 DeBoers Drive. The Plaintiff has established that it has an equitable interest in the properties. I grant the motion with respect to the issuance of the Certificate of Pending Litigation for Ms. Richardson’s properties at 11 Kinghorn Road, King City and Unit 1405- 10 DeBoers Drive, North York.

[61] Dayana Pantaleo was the principal of Competitive Computing. As noted above, Ms. Moosa determined that when the funds were received by Competitive Computing from YMCA pursuant to the fraudulent scheme, a portion was transferred to Dayana Pantaleo’s personal account. In 2015 and 2016, Ms. Pantaleo received payments of $1,892,266.13 from Competitive Computing. Although some of this money may have been from legitimate sources, I am satisfied that the payments included money from the YMCA. In 2017, Ms. Pantaleo purchased the property at 33 Bamford Cres., Toronto for $262,727. I find that there is evidence of a connection between Ms. Pantaleo’s receipt of the funds and the purchase of the property. I grant the motion with respect to the issuance of the Certificate of Pending Litigation for Ms. Pantaleo’s property at 33 Bamford Cres., Toronto.

[62] There is no evidence of a connection between the fraud and Mr. Spano’s condominium property in Vaughan. The property was purchased in 2010 several years before the start of the COGJ program. I dismiss the motion with respect to the issuance of the Certificate of Pending Litigation on Mr. Spano’s property.

Disposition

[63] I grant the order sought to amend the Statement of Claim to add the proposed Defendants.

[64] I grant the Mareva injunction, in part. All Defendants with the exception of Maurizio Bianconi are restrained from encumbering or disposing of their assets other than in the normal course of paying their creditors or for reasonable costs of living. The order is in effect for a period of 10 days from the date of this endorsement.

[65] I grant the order with respect to the issuance of the Certificates of Pending Litigation for the properties owned by Ms. Richardson at 11 Kinghorn Dr., King City and Unit 1405 – 10 DeBoers, North York. I also grant the order with respect to the issuance of the Certificate of Pending Litigation for the property owned by Dayana Pantaleo at 33 Bamford Cres., Toronto.

[66] The Order will go in accordance with the draft orders filed, and signed by me.

DATE: June 13, 2022