Court File and Parties

COURT FILE NO.: CV-22-00002925-0000 DATE: 2024 01 02

SUPERIOR COURT OF JUSTICE – ONTARIO 7755 Hurontario Street, Brampton ON L6W 4T6

RE: BRADLEY J. GRANT INVESTMENTS INC.

AND: NESTIG INC., HEIMBECKER, Stephen Lee, also known as Steven HEIMBECKER, personally and as Trustee of the STEPHEN HEIMBECKER (2015) FAMILY TRUST, HEIMBECKER, Joanna Marie, also known as Joanna Marie MEADOWS, KEYSTONE CAPITAL INC., and 1442422 ONTARIO LIMITED.

BEFORE: Regional Senior Justice L. Ricchetti

COUNSEL: C. Abela and M. Allen, for the Plaintiff; A. Max, for Defendants, Nestig Inc. and Stephen Lee Heimbecker; R. Bucholz, for the Defendant, Joanna Marie Heimbecker; A. Verrilli, for the Defendant, Keystone Capital Inc.; and S. Tanvir, for Defendant 1442422 Ontario Limited

HEARD: December 19 and 20, 2023; In Person.

Endorsement

[1] An interim Mareva Order was issued on July 24, 2023. This was the return date for an interlocutory Mareva Order.

[2] Other issues were also dealt with during this hearing.

Miscellaneous

[3] There were a number of uncontested issues where orders were granted on consent, or no opposition to granting such orders, by all parties present:

a) Leave is granted to the Plaintiff to “late file” its factum.

b) Leave is granted to the Plaintiff to “late file” its Injunction Motion. The relief sought in this injunction motion is not opposed.

c) Leave is granted to “late file” the Haertel Affidavit dated August 18, 2023.

d) Leave is granted to “late file” the Gilmore Affidavit dated the December 19, 2023.

e) The relief sought in the proposed Order, at document CaseLines A18428, is to issue granting relief regarding disclosure from non-parties and the formal issuance of the Fresh As Amended Statement of Claim which includes adding Keystone Capital Inc. (Keystone) and Joanna Marie Heimbecker (Joanna Heimbecker) as parties to this proceeding. A copy of that order has been signed by me.

f) The relief sought in the proposed Order, at CaseLines A18463, is to issue granting an injunction. A copy of that order has been signed by me.

g) Order to issue directing Stephen Lee Heimbecker (Mr. Heimbecker) to answer Undertakings, in the form of order signed by me.

[4] As a result of the delivery of voluminous materials the day before the hearing, the Plaintiff’s contempt motion is hereby adjourned sine die.

Continuation of the Interim Mareva Injunction (July 24, 2023)

[5] Keystone, initially opposed but, at the time of the hearing, consented to the proposed interlocutory Mareva Order.

[6] Mr. Heimbecker/Nestig Inc. (Nestig) did not oppose the proposed interlocutory Mareva Order except as it relates to a proposed reduction in the exemption amount Mr. Heimbecker and Joanna Heimbecker can receive for ordinary living expenses.

[7] Mr. Heimbecker’s Trustee in Bankruptcy did not oppose the proposed interlocutory Mareva Order.

[8] Joanne Heimbecker did not oppose the proposed interlocutory Mareva Order except for two provisions that she submitted should be included:

a) To permit Joanne Heimbecker to open a new bank account and to deposit, arm’s length employment income, to be used by her as she sees fit.

b) To permit Joanna Heimbecker to sell specified jewellery which she can use to pay her legal expenses or tuition for her children.

The Interim Mareva Injunction Should Be Continued

[9] I am satisfied that, in light of the evidence, namely the admission by Mr. Heimbecker that he obtained funds from the Plaintiff, not for the stated purpose of mortgage investments, but rather for personal use or other unconnected uses, establishes an overwhelming case of fraud by Mr. Heimbecker and Nestig.

[10] Given the evidence set out below, regarding Joanna Heimbecker’s involvement in the various Heimbecker companies, Family Trust and personal bank account transactions, a prima facie case has been made that Joanna Heimbecker was either a joint participant, willfully blind or assisted in the commission of the fraud such that the interlocutory Mareva should also issue against her.

[11] At this point, and given the evidence of Keystone’s longstanding business relationship with Mr. Heimbecker and the alleged distribution of the Plaintiff’s funds through to Keystone and its principals, I am satisfied that the interlocutory Mareva should also issue against Keystone.

[12] There is no doubt that the Nestig and Mr. Heimbecker have dissipated assets through the use of the Plaintiff’s monies for their personal and family lifestyle. Further, the evidence before this court demonstrates that the other defendants have received substantial amounts of the Plaintiff’s monies that were paid to Nestig and/or Mr. Heimbecker.

[13] The dissipation is readily apparent from Mr. Heimbecker’s assignment into bankruptcy and statement of his assets. The dissipation is also readily apparent from the worldwide sworn statement of assets provided in this proceeding.

[14] Unless an interlocutory Mareva Order is granted, the very limited assets now held by the Defendants, will likely either be dissipated and/or continue to be dissipated. For the reasons set out below, there remains serious questions regarding the source, use and current location of all the monies Nestig and/or Mr. Heimbecker received from the Plaintiff. Hence, irreparable harm has been established as having occurred in the past and, I am satisfied there is serious likelihood that further irreparable harm will be occasioned unless an interlocutory Mareva Order is granted.

[15] In these circumstances, the balance of convenience clearly favours the Plaintiff obtaining a continuation of an interlocutory Mareva Order.

[16] In addition, the facts discovered after the issuance of the interim Mareva Order make the issuance of an interlocutory Mareva Order much stronger and more compelling. So, ordered.

[17] Now I turn to the question of what, if any, of the dispute terms, are to be included in the interlocutory Mareva Order?

The Disputed Terms

[18] Before considering the terms sought to be included in the proposed interlocutory Mareva Order, there is some background and evidence that impacts on whether or which of the disputed terms should or should not be included.

Complete and Accurate Financial Disclosure

[19] The interim Mareva Order issued, by this court, on July 24, 2023.

[20] The interim Mareva Order permitted Mr. Heimbecker and Joanna Heimbecker to withdraw up to $10,000 for ordinary living expenses.

[21] Complete, accurate and sworn statements of worldwide assets was to be delivered by Mr. Heimbecker and Joanna Heimbecker.

[22] Sworn statements were delivered. However, there is a serious question whether the sworn statements were the court ordered complete and accurate financial disclosure of their worldwide assets.

[23] A prima facie case has been made out, on the evidence before me, that the assets, the source and use of monies by Mr. Heimbecker and Joanna Heimbecker before and after the interim Mareva Order issued, continues to remain “opaque” despite their sworn statements and their cross-examinations and their answers to UTs (at least to the extent made).

[24] A prima facie case has been made out, on the evidence before me, that Mr. Heimbecker and Joanna Heimbecker have spent more money than that permitted under the interim Mareva Order.

[25] These concerns were part of the court’s decision to dismiss the September 18, 2023 motion to increase the amount of money exempted from the interim Mareva Order. The amount sought was subsequently reduced on September 21, 2023. For example, Joanna Heimbecker continued to seek an increase of the amount exempted to permit her $3,500 monthly Porsche payments. Another example was that tuition fees of approximately $38,000 were included as the expenses “needed” by Mr. Heimbecker and Joanna Heimbecker. Yet, now, it appears that tuition fees of $67,000 were in fact paid.

[26] As a result, there remains serious doubts that Mr. Heimbecker and Joanna Heimbecker have made complete and accurate financial disclosure as ordered. Some of those serious doubts arise because:

a) There were a number of related party transactions immediately prior to and while the motion for the interim Mareva was outstanding. The impression left with the court is a deliberate avoidance or ignoring of the impact of a court order.

b) Inaccuracies in the sworn worldwide statement of assets required under the interim Mareva Order. Some assets were not disclosed. Some encumbrances were not detailed or explained.

c) There was the disregard of a court order, exempting from the interim Mareva Order, permitting the sale of a horse to a specific buyer at a specific price. But, Mr. Heimbecker ignored the court order, and sold the horse in a manner that resulted in a significantly lower price to the same specific buyer.

d) The post interim Mareva Order bank statements show that after the interim Mareva Order was issued, Mr. Heimbecker continued use his Visa, had expenses and made payments well beyond the $10,000 monthly exception in the interim Mareva Order. For example, the amount spent by Mr. Heimbecker on his credit card for the months following the interim Mareva Order included substantial amounts of betting (total on July 25 and 27, 2023 alone was $12,500), with in total Visa expenditures for that month alone in excess of $31,000.

e) Mr. Heimbecker sought and obtained approval to open an account for new business and was ordered to provide detailed accounting monthly of the source/transactions. He had not provided any monthly reporting as of the date of this hearing. Nor has he disclosed the bank statements for this new account.

f) Joanna Heimbecker failed to disclose a valuable ring ($119,000 discovered later by the Plaintiff) and now seeks to sell some other jewellery whose value is beyond that disclosed in her Mareva Statement.

g) The many non-answers and undertakings given by Mr. Heimbecker, resulting in an order that Mr. Heimbecker appear in court to complete his examinations and answer UTs. And then he gave further UTs. And then he was given a court mandated deadline to answer the UTs. Despite the passage of the deadline, some remain outstanding.

h) The blatant attempt to delay an in-court examination through a last-minute bankruptcy by Mr. Heimbecker. When the stay was lifted to permit the in-court examination to go ahead, many of the UTs remained outstanding despite the extensive time since they were given. Then, for the first time, and contrary to his affidavits on the interim Mareva hearing, Mr. Heimbecker admitted the fraud committed against the Plaintiff and use of the Plaintiff monies, not for investments but to finance his lifestyle, to pay other investors and sometimes to repay the Plaintiff to keep the illusion of investment returns all for the purpose of obtaining further monies from the Plaintiff.

i) Joanna Heimbecker is a shareholder, officer and director of some of Mr. Heimbecker’s companies involved in the fraud. Yet, little financial information comes from her.

j) There are transfers of monies (the source of which included the Plaintiff’s monies) to Joanna Heimbecker’s mother (before) and after the interim Mareva Order issued.

k) Many millions of dollars (over $103 million) when through the personal joint bank account of Mr. Heimbecker and Joanna Heimbecker.

l) As of the date of the examinations, the Heimbecker children continue to attend private school (with tuition paid), they continue to drive luxury cars (Joanna Heimbecker continues to drive a Porsche).

[27] The source and use of the Plaintiff’s monies remains elusive to date.

Joanna Heimbecker

[28] Turning to Joanna Heimbecker’s role.

[29] Joanna Heimbecker was a shareholder, officer and director of Nestig, one of the Defendants and one of the main corporate vehicles used by Mr. Heimbecker to perpetrate the admitted fraud.

[30] Joanna Heimbecker is/was the shareholder, officer and director of Nestig Insurance.

[31] Joanna Heimbecker is a trustee of the Heimbecker Family Trust.

[32] Joanna Heimbecker knew that Mr. Heimbecker was moving millions of dollars (over $103 million) through their joint personal bank account.

[33] Joanna Heimbecker, at one point, admitted to signing tax returns which reported Mr. Heimbecker’s income, which level of income could not have possibly resulted in the millions of dollars through the joint bank account nor the very affluent lifestyle nor the acquisition of many millions of dollars of racehorses.

[34] Joanna Heimbecker was aware of the TD Fraud Claim for over $22 million dollars, made at the end of 2022. She says she never asked Mr. Heimbecker about that fraud claim despite the fact that Joanna Heimbecker was a named Defendant in the TD Fraud Claim. Then, some of the companies that Joanna Heimbecker was involved with, as a shareholder, officer and director and her company, Heimbecker Insurance, were involved in a payment to TD to settle the TD Fraud Claim in early 2023.

[35] Joanna Heimbecker did not disclose in her Mareva Statement, that she had shares in 139 Inc. that holds shares in Eastgate, is a commercial/office development company.

[36] Joanna Heimbecker failed to disclose that she owned a $119,000 ring and valuable artwork. This all came to light when subsequently discovered by the Plaintiff.

[37] The fact that $67,000 of their children’s school tuition has been paid without disclosure of when, the source of funds and so forth. This was after asking to increase the exemption in September 2023 because of the need to pay children’s tuition.

[38] A review of Joanna Heimbecker’s bank statements, post interim Mareva Order, show substantial deposits and withdrawals (for example in September 2023, deposits $16,636 and withdrawals $19,300) many of which are “e-transfers” or “deposits” raising questions, and some payments were for private clubs and payment of $3,574 monthly payment for her Porsche. This is prima facie evidence that the interim Mareva Order was entirely disregarded by Joanna Heimbecker.

[39] Joanna Heimbecker states she never had any operational role in the Heimbecker companies and was not involved in Mr. Heimbecker’s deals, transactions or affiliations with his clients. Yet, her signature appears on many documents including for the sale and purchase of properties, and for granting mortgages. Joanna Heimbecker even received monies from a loan Mr. Heimbecker arranged despite not having loaned any monies. If she didn’t have a role, on the evidence before me, there is a strong prima facie case for wilful blindness or knowingly assisting the admitted fraud.

[40] Joanna Heimbecker’s submission that the TD Fraud Claim did not raise any “doubts” about Mr. Heimbecker’s financial dealings, makes little sense. Particularly when this is considered in light of other facts including the over $103 million dollars going through her personal joint bank account, and the transfers involving Joanna Heimbecker’s own 70-year-old mother. Joanna Heimbeckers involvement, signature on many documents, buying and mortgaging properties with the funds obtained by fraud, raises serious questions regarding her knowledge and involvement in Mr. Heimbecker’s fraudulent scheme. For example, Joanna Heimbecker is the sole registered owner of the Heimbecker home and yet, she, not Mr. Heimbecker, granted various mortgages well beyond what the home could possibly be worth. I reject this submission.

[41] Joanna Heimbecker also permitted Mr. Heimbecker to issue a loan in her name and to receive the interest payments for the loan even though she knew she never advanced any funds to the recipient of the loan. It is hard to imagine a possible explanation that Joanna Heimbecker didn’t know she was receiving loan payments without having advanced a loan.

[42] Joanna Heimbecker submits that the highly questionable involvement of her company, Nestig Insurance, was done at Mr. Heimbecker’s direction. Yet, it is her company – NOT Mr. Heimbecker’s company.

[43] There is a serious issue to be decided whether Joanna Heimbecker was willfully blind to the fraud – which would constitute knowledge on her part.

[44] Joanna Heimbecker submits that the proposed Mareva preservation order is punitive on her and her family and goes beyond the purpose of preventing an injustice to the Plaintiff. To ameliorate the punitive effect of the interim Mareva Order, Joanna Heimbecker seeks a court order permitting her:

I. To sell certain jewellery and use the proceeds, essentially, as she sees fit for her and her children’s living expenses:

(a) A bracelet, valued at $4,200, appraised on October 21, 2014;

(b) A ring, valued at $37,500, appraised on December 19, 2014;

(c) A watch, valued at $39,5000, purchased in 2016;

(d) A chain, valued at $3,200, appraised on April 8, 2011;

(e) A bracelet, valued at $28,000, appraised on September 14, 2007;

(f) A ring, valued at $51,000, appraised on June 8, 2006;

(g) A bracelet, valued at $13,800, appraised on August 27, 2010; and

(h) A bracelet, valued at $15,750, purchased on October 17, 2017.

II. To open an additional bank account in which she may deposit and freely access arms-length employment income.

[45] Turning now to the proposed disputed terms.

a) Release of funds to the Plaintiff

[46] The Plaintiff seeks an order that certain seized or “frozen” pursuant to the interim Mareva Order, be paid to the Plaintiffs counsel, not for preservation, but as a partial satisfaction to amounts owed to the Plaintiffs.

[47] Neither the Trustee, nor any of the parties before the court, objected to the proposed order.

[48] Accordingly, paragraphs 9, 10, 11, 12 and 13 will be included in the interlocutory Mareva Order to issue.

b) Joanna Heimbecker’s request regarding Future Employment Income

[49] Joanna Heimbecker proposes the following term be included in the proposed Mareva Order to issue:

THIS COURT ORDERS that notwithstanding anything else in this Order, for the purpose of ordinary living expenses, Ms. Heimbecker shall be permitted to open a new bank account, solely in her own name, and to deposit into such account employment income derived from arm’s length parties (“JH Employment Income”). Ms. Heimbecker shall disclose to the Plaintiff each source of the JH Employment Income and, if no objection is made regarding the source of the funds or the arm’s length nature of the employment within five (5) days, Ms. Heimbecker shall thereafter be permitted to use the JH Employment Income for ordinary legal [should be living] expenses or legal expenses.

[50] I am not prepared to include such a provision.

[51] There are many reasons for rejecting this provision, but the primary ones include:

a) The lack of complete and accurate financial disclosure, as described above, including having failed to produce all her personal bank statements.

b) The prima facie involvement by Joanna Heimbecker in her dealings, through the joint bank account and companies to which she was connected, as described above, remains a serious issue.

c) Joanna Heimbecker does not currently have employment income. If she does, she hasn’t disclosed this income nor what that income is specifically to being used for. We don’t know if and when and with who she might obtain such employment. Or is it related to the mortgage or investment business? Would Mr. Heimbecker have an indirect role in her employment or earnings? Could it be that some of the Plaintiff’s or other investor’s monies will or could be funnelled through this as “employment income”? Given the evidence described above, the court has serious concerns without this level of details and strict accounting. It is not appropriate to give Joanna Heimbecker an approval as asked without this information, and it being tested by other parties. Joanna Heimbecker may seek approval once details are known regarding any possible arm’s length bona fide employment and the details of this employment is fully and candidly disclosed.

d) The requirement that Joanna Heimbecker will disclose each source of funds, is similar to an order made against Mr. Heimbecker in September 2023 to permit him to open an account, deposit his earnings and provide a detailed report on a monthly basis. That order was disregarded by Mr. Heimbecker leaving a considerable uncertainty as to the source, income and expenses of the Heimbeckers.

e) For the reasons set out above, I am not persuaded that Joanna Heimbecker has made complete and accurate financial disclosure as required by the interim Mareva Order nor during her cross examinations. This alone is a basis for dismissing the request to vary the Mareva. See Tabrizi v. Majesty Development Group Inc. et al, 2022 ONSC 2665, at para. 32. To again summarize, some of Joanna Heimbecker’s failure to disclose include:

• The Plaintiff has been seeking information about the whereabouts of money received by Nestig (a company Joanna Heimbecker was an officer and director of) from non-parties prior to the Defendants using the Plaintiff’s funds to repay those non-parties. The source, use of funds and location of the funds used in the fraud, remain unknown.

• The Plaintiff has sought historical and current bank statements for Joanna Heimbecker’s personal bank accounts, which still have not been provided.

• Joanna Heimbecker originally only disclosed in total $90,000 in jewellery. However, after information from the Norwich Order, it turned out that Joanna Heimbecker failed to disclose a $119,000 ring. Now, part of what Joanna Heimbecker seeks to sell is jewellery that, pre-dates the Plaintiff’s investment. In other words, limited jewellery of hers. Yet, these items, (not including the $119,000 ring), total $192,000. There is serious inconsistency in Joanna Heimbecker’s disclosure.

• Joanna Heimbecker also failed to initially disclose artwork she had purchased for approximately $170,000.

[52] I reject including such a term in the interlocutory Mareva Order.

c) Joanna Heimbecker’s request to Sell Jewellery for her Legal Expenses and Tuition.

[53] The Plaintiff opposes this provision because:

While the jewellery appraisals pre-date the provision of funds by the Plaintiff to Heimbecker, the evidence establishes that a substantial portion of the Plaintiff’s funds were used to repay other investors who previously contributed money towards the fraudulent scheme. There has been no disclosure provided with respect to the use of the other investors funds, which was a question asked of Heimbecker and Joanna and not answered. The Plaintiff may have a constructive trust over those assets if its money is connected to the repayment of other investors whose funds may have been used to acquire the jewellery.

[54] Given the lack of complete and accurate financial disclosure described above, on that basis alone, I would reject permitting Joanna Heimbecker from selling the jewellery.

[55] If necessary, given the manner in which this fraudulent scheme was apparently carried out, as described by Mr. Soriano, it was a scheme whereby some purported investors’ monies were used to pay out other purported investors. It is impossible to ascertain with whose monies were used to purchase and when. It is entirely unclear where the funds for this jewellery came from.

[56] Lastly, there is no urgency in selling or disposing of these assets. It makes no sense to allow the sale of the jewellery to permit Joanna Heimbecker to pay their children’s tuition, when neither of the Heimbeckers have any significant income and they can’t afford the continuation of the private school. In the end, it may be that the jewellery (or the value of them) is properly due to a creditor who has also been defrauded, even if not the Plaintiff. It is worth remembering that Joanna Heimbecker said that the jewellery was purchased by Mr. Heimbecker, the person at the center of the fraud, and neither of them have set out where the funds for those purchases came from.

[57] I reject inclusion of this provision.

d) The Plaintiff’s request to Reduce the Amount Exempted for Ordinary Living Expenses for Mr. and Ms. Heimbecker

[58] On November 20, 2023, Mr. Heimbecker, on the eve of his examination in court, made an assignment into bankruptcy without leave of the Court.

[59] Mr. Heimbecker’s reporting of his assets, liabilities, income and expenses to the bankruptcy trustee in his November 20, 2023 statement is different than what was reported to the Plaintiff in his July and September Affidavits and during his cross-examination held on September 28, 2023.

[60] Under the bankruptcy, Mr. Heimbecker has reported $21,000 net income and is required to pay the trustee $7,298 per month as surplus income. I do not ignore the fact Mr. Heimbecker was to have provided detailed information regarding this income and he has ignored that court order.

[61] The Plaintiff submits that the result of the bankruptcy and what Mr. Heimbecker is permitted for the family, results in Mr. Heimbecker access to more money each month than permitted to Mr. Heimbecker and Joanna Heimbecker under the interim Mareva Order.

[62] Whether the amount permitted by the Trustee in Bankruptcy nevertheless amounts to a breach by Mr. Heimbecker of this court’s interim Mareva Order or a serious failure by the Licensed Insolvency Trustee who knew or should have known of this court’s interim Mareva Order thereby limiting the amount available jointly to Mr. Heimbecker and Joanna Heimbecker, will have to be dealt with at the next hearing where the Trustee in Bankruptcy can provide his explanation the “agreement” which would permit access monthly monies beyond the amount permitted in the interim Mareva Order. This failure takes on greater significance when the Trustee in Bankruptcy does not oppose the continuation of the interim Mareva Order while, at the same time, continues to potentially permit Mr. Heimbecker access to a larger amount than ordered by this court.

[63] At this point, I am not prepared to vary the maximum $10,000 currently for Mr. Heimbecker and Joanna Heimbecker for ordinary monthly expenses.

[64] However, to be clear, if there continues to be less than full complete and accurate financial disclosure by Mr. Heimbecker and/or Joanna Heimbecker by January 31, 2024, then the Plaintiff and any party can schedule a hearing, on notice, to reduce or eliminate the amount exempted by the interlocutory Mareva Order.

[65] Counsel for the Plaintiff shall amend the proposed interlocutory Mareva Order to include the changes arising from these reasons and upload a copy to CaseLines for my review.

Costs

[66] Costs will be dealt with in a separate endorsement.

RSJ L. Ricchetti Released: January 02, 2024

COURT FILE NO.: CV-22-00002925-0000 DATE: 2024 01 02 SUPERIOR COURT OF JUSTICE - ONTARIO RE: BRADLEY J. GRANT INVESTMENTS INC. v. NESTIG INC. and STEPHEN LEE HEIMBECKER also known as STEVE HEIMBECKER, personally and as Trustee of the STEPHEN HEIMBECKER (2015) FAMILY TRUST, HEIMBECKER, Joanna Marie, also known as Joanna Marie MEADOWS, KEYSTONE CAPITAL INC. and 1442422 ONTARIO LIMITED COUNSEL: C. Abela and M. Allen, for the Plaintiff; A. Max, for Defendants, Nestig Inc. and Stephen Lee Heimbecker; R. Bucholz, for the Defendant, Joanna Marie Heimbecker; A. Verrilli, for the Defendant, Keystone Capital Inc.; and S. Tanvir, for Defendant 1442422 Ontario Limited

ENDORSEMENT RSJ L. RICCHETTI Released: January 02, 2024