The missing millions: Following the money in Canada’s biggest tax fraud

[Music] it was a sight thousands of pensioners and investors had been hoping for the high profile arrests of high-flying montreal executives charged with orchestrating a massive fraud after taking their money and hiding it off shore ronald weinberg a tv production executive the crown says he's a central figure in the alleged crime investment advisor john zantoudakis the hedge fund manager allegedly investing the stolen money and the reputed ringleader leno mateo the suspects had been found but hundreds of millions of dollars were missing so where was the money [Music] that's a question that still haunts catherine mcdonald and her husband jean-claude together they invested five hundred thousand dollars it vanished just like janet watson who trusted their financial expertise to build for her retirement her investment long gone catherine and janet now carry their nightmare in their banker's boxes cheated out of their savings they've become warriors for justice i don't know our personalities are very much the same i think we're fighters yeah we're fighters we're not we don't like to see ourselves as victims and i think the fight as catherine said many times the fight was our way of handling it you know rather than just uh give up and maybe we were getting one percent more but it wasn't outrageous like so many others they put their money in what they were told were respectable companies the financial statements were public you could you and they were all showing profitability nor shield run by john zantudakis and mount real run by leno mateo even some older people didn't tell their children they didn't want anybody to know they were so ashamed that they'd been wiped out financially yeah because they were at a certain age where this money would go on to their children or their grandchildren and here they lost it all do you believe to this day that these characters have money stashed away some of your money stashed away somewhere out there yes yes matteo is too smart not to have a plan b every day their nightmare began in the most unlikely of places what parent of the 1990s can forget arthur healthy programming teaching your kids how to be honest and kind welcome to cinar where we open doors to imagination arthur was produced by the animation studio cinar along with other classics like caillou and the adventures of paddington bear weinberg was co-ceo of the company dub disney of the north but cinar's make-believe world got very real after an internal audit in 2000 revealed weinberg transferred 120 million dollars of company money to the bahamas without telling its board of directors i had one very very simple question where's the money lawyers bill brock and cara cameron were hired by cinar's board to find the company's money i was sent down to find the money and little did i know that this would occupy the next 10 years of my professional life the paper trail showed weinberg move cinar's money to a north shield affiliate in nassau and from there it would be moved again and again we did litigation in england new york florida bahamas anguilla as i was talking to lawyers from you know three or four countries a day who are trying to get after these things as the cinar fraud made headlines catherine worried her investments were with that same financial group norshield when the board of directors of sinar found out they wanted the money back i was reading this in the newspaper and i was thinking well what money is going to pay them back is it my money i'm invested in north shield too are alarm bells going off for you at this oh very much so very very much so it was panic right at the beginning and then it was incredible anger just i was just furious and i got angrier as time went on and the injustice of the whole thing janet watson decided to do her own investigation in her hunt for her money she demanded a meeting with leno mateo at this restaurant in montreal and asked for her money back i thought he was a thug and if i had ever met him in person i would never put a single cent into any of his companies janet and catherine both started digging into matteo's mount real business in ways their own financial advisors never did this is the head office of mount reel that's the head office yeah it was operating out of a duplex with several addresses actually so i think it was down here in these boarded up windows i took this picture so that kind of says it all doesn't it it does with investors creditors and lawyers looking for the north shield cinema money the evidence shows lino mateo was brought in to help keep it hidden mateo was hatching a plan a situation that could get nasty he wrote but is in a sunny climate it was the beginning of a scheme to hide investors money that would last more than four years so over time we found out that yes we're being fed a stream of lies in june 2005 norshield was shut down by the courts [Music] that month leno mateo wrote an email plotting to transfer millions to another secret offshore company the shares need to be moved mateo wrote and fast their intentions were clear from this response so the liquidators cannot get it lino mateo would be convicted for his role in this fraud out on parole he agreed to speak to the fifth estate and a lot of people who who feel angry that their money was lost money that represented their future is gone is that something that weighs on you when you think about those people and the money that was lost no one likes to lose money that's very clear no one reads what the risk are when they're reading the risk document because they think it doesn't apply to them so sure it's unfortunate here's what i'm going to say okay anyone that lost money is absolutely entitled to be upset and they are and they're absolutely entitled you've heard it could i finish please okay this is the first time i'm gonna say this on the record no one lost more money than me in my family and despite his fraud conviction he won't admit he's guilty of anything i'm not telling you that there wasn't any fraud by some other parties but if you want to look at what my involvement was in putting together a working paper file i believe there was no fraud intended and my understanding if there is no intent there isn't a crime okay these investors who feel that there's still money out there somewhere of course there's money out there somewhere as i said before there's a there's a debit and a credit so someone won one the money left the company someone got the money so where is that money well it's gone now it's precipitated [Music] but was the investors money gone or hidden and still out there court documents from liquidators and civil lawsuits note assets diverted by the hundreds of millions unauthorized transfers offshore allegations of fraud and forgery in all more than half a billion dollars unaccounted for the money had vanished it wasn't just mom and pop investors who wanted their money back relatives and associates of the rizzuto crime family had lost 5 million dollars in norshield enforcers barged into a meeting with leno mateo's co-conspirator john zantudakis in this office building and beat him badly demanding their money [Music] back nrcmp wiretap recorded this cell phone conversation with a former partner of zantudakis the guy that deserved that you know between me and you and you the guy that deserved that was [ __ ] lena mateo he didn't show his [ __ ] face the [ __ ] weasel that he is okay he's the guy who deserved it there's people that want to beat me up okay do you have anything else you want to talk about and janet and catherine were starting to understand how things work i you know why do small investors not get their money back well if you're standing in line to get your money back and you're a big institution like a bank or you're the mafia and then there's the small investor who are you going to pay back first but even bill brock and cara cameron couldn't get all of cinar's money back they traced millions to the barrington bank in the bahamas but were blocked from getting at the accounts we were looking for justice for our clients and we were trying to deploy all legal means that we could in order to achieve those ants after recovering most of cinar's millions brock and cameron settled with weinberg out of court it's done done dean can we talk to you their colleague wes warhee still struggles with it millions were still missing so i do this work because i hate these guys and i don't like these guys tell the truth pay your taxes abide by the law do what the rest of us do these guys don't do that coming up we join the hunt in search of the missing millions where did the money go who are you protecting mr maker [Music] it was a ray of hope for the victims of one of the biggest frauds in canadian history that arrest of the three co-conspirators john zantudakis charged after reportedly stepping off a plane from bermuda lino mateo arrested in montreal and attend ronald weinberg charged as he returned from a caribbean holiday catherine mcdonald would have liked a sunny vacation too but her life savings were gone the only trip she was taking was a bus ride to their criminal trial catherine why why was it so important for you to be in that room well it was my way of dealing with our loss and also to represent the victims because as far as the court sees victims are names and numbers on pages of paper but we wanted to put a face to the victims of these frauds what prosecutors matthew ferguson and celine bilido didn't know at the outset this would be the longest jury trial in canadian history who are the victims in this story as you're watching it play out um it's incalculable the number of victims here we're talking about hundreds of millions of dollars when i accuse somebody it's because i'm sure is guilty and they were sure from the beginning that they were guilty oh yes yes week after week catherine and janet watson would show up and come face to face with the man they believed made off with their money leno mateo we wanted him to go to jail for something we were just happy they were they were going to court i mean something was finally being done [Music] two years after it began the verdicts guilty guilty guilty proving the fraud was one thing finding the money that belonged to investors like janet and catherine was another and when it came to that and finally when you get a certainly a conviction of this the question was still where's the money yes but yeah it's something it's a question that i still ask myself is is what happened to the rest of it and where is the rest of it so where was the money our search for clues took us here to the isle of man a tiny crown dependency off the irish sea in ancient times these castle walls used to keep out foreign invaders now the island attracts foreign accounting firms and their clients offering confidentiality in their financial affairs and it was here we found some clues that cracked the secrecy of these castle walls companies naming people linked to canada they were called qatar shacks spatha and shashqua all named after ancient swords and daggers we noticed all four sword companies were set up exactly at the beginning of the sinar norshield fraud and three of the four were shut down exactly when that fraud was finally exposed so could that just be a coincidence so i suspect you're on to something but i can't i'm not in a position to confirm or any further when we asked leno mateo he alluded to knowing something he just wouldn't say what if i can get my hands on something more concrete maybe we'll have another conversation one day but right now no i'm not prepared to speculate so we took those sword company documents to wes voorhees i learned over the years dealing with these situations that in when people commit fraud um they almost always have money hidden somewhere in the world warheas was hired to find sinar's missing money if i had got this information we had got this information while we were still on the scene we would have tried to get to the bottom of this um the timing is too coincidental to be uh just a coincidence tax professor marwa rizki studied the documents as well she too believes they must be linked to the cinar nor shield fraud the creation date are the same and the liquidation date is also the same so there has to be link so who helps set up those isle of man shell companies i've got as many calls on this issue as i have in any other because i think canadians are are quite frustrated in ottawa in 2016 the house of commons finance committee was looking into the isle of man and an offshore tax scheme for the rich set up by the accounting firm kpmg canada where this document surfaced kpmg advertising to wealthy canadians a product they designed using the isle of man that would protect their money from creditors there was nothing a creditor ex-spouse can claim the keeping scheme is to help multi-millionaire billionaires risky is also a liberal member of quebec's national assembly she says that kind of confidentiality offered by kpmg could be ripe for abuse this is why it's very very good for people who wants to get away with with the tax problem with the creditors problem there's no way we can find it unless there's a of course a leak the finance committee never did find out the names of those companies set up by kpmg in the isle of man or the wealthy canadians behind them the liberal mps on the committee shut down the probe after kpmg complained it would interfere with ongoing tax court cases one of the biggest ever leaks of offshore secrets this is the number of documents that would never have seen the light of day documents speak for themselves they are known as the paradise papers then another clue from the paradise papers about those companies we found in the isle of man an email listing all the companies kpmg set up in the isle of man for canadian clients and there they were shashwa qatar shax and spatha the author of the email an isle of man service provider working with the company set up by kpmg canada kpmg is adamant it had no role in setting up the sword companies they say the author of that email was involved only at an administrative level her statements contradictory and she was only expressing a belief the sword companies were linked to kbmg kpmg says it isn't surprising there are similarities saying anyone could copy their documents from the public registry and kpmg adds there are nevertheless important differences between the companies they help set up and the swords on my personal opinion they are linked we asked professor rizki she says it's possible the sword companies weren't set up by kpmg canada but she doesn't believe in that kind of coincidence so we have the same service provider the same articles we have the same companies involved the same language and in three of those sword company documents we found this name william maycock he knows who was behind the sword companies and where the money went maycock is a canadian trained accountant based in bermuda our producer harvey cashore paid him a visit in 2017 while researching this story the documents show he managed the money in the sword companies on behalf of those unnamed canadians and transferred the assets when three of the companies were closed down in 2005. did the money go what do you do with the money mr mate i don't know and i don't like your behavior okay but where does money go i don't appreciate the way you who are you protecting mr makeup i'm not protecting anyone who are they there's a lot of money involved that was that went missing a lot of money went missing mr mayhawk for years investors were let down by the institutions meant to protect them they're demanding ottawa do more to help get their money back and now there's a solid lead says wes warhees what can be done with them to to try to get closer to finding out where that money is you could start litigation in the isle of man then you go to court and you get a court order but this is a start this is a start it's a start and as i said right right at the outset you gotta have a start without a start you got no chance but you gotta start if there is any whatsoever particle will out there in ottawa this should have the rcmp reopening the investigation they should have the prosecutor like the best of canada working on that case today leno mateo is on parole in a recent court ruling a judge said the evidence clearly showed he was transferring money offshore he was fined five million dollars but hasn't paid it you haven't paid it what's your point why not why not what pay the fine why don't you pay it do you think i have five million dollars did you like come on i view your question as insulting why do you review that as insulting in fact we're gonna stop stop the cameras please why why i'm gonna explain once you stop the cameras well you can explain the camera okay then i'm leaving ronald weinberg declined to talk to us he got full parole in 2019. last year he made headlines after receiving a covet relief serb check he paid it back today he and his wife own this posh panama resort we showed the resort's youtube video to janet and catherine oh jesus is this supposed to be therapeutic because it's not no i hadn't i had no idea and this is now today okay how's your money cassie yeah well i i feel i have a share in that yeah maybe we could get a room [Music] do [Music] [Music] so you

Channel: The Fifth Estate

Views: 185,236

Keywords: fraud, tax fraud, scam, money, finances, investment, investor, pension, Cinar, business, Ronald Weinberg, Lino Matteo, Michael Morris, John Xanthoudakis, Mount Real, Norshield Financial Group, foreign, bank account, offshore, shell company, Montreal, Quebec, Canada, Isle of Man, Bahamas, Nassau, investigation, Canada Revenue Agency, CRA, Mark Kelley, The Fifth Estate, Enquete, CBC, CBC News, Radio-Canada

Id: avjh11QlsVI

Length: 22min 14sec (1334 seconds)

Published: Fri Feb 26 2021