0

‘We did not cheat anyone,’ mall owner says of dubious scheme to raise money


 

ELLIOT LAKE, Ont. – The owner of the collapsed Algo Centre Mall testified Thursday that he entered into a series of multimillion-dollar contracts and cash transactions only to obtain a grant or loan he desperately needed to repair the crumbling building.

On his third day of testimony, Bob Nazarian insisted the scheme was legitimate even as he admitted he had his doubts.

“I have done a lifetime (as an) honourable businessman,” Nazarian said.

“It’s a mistake, I shouldn’t have got involved. Out of desperation, I got involved.”

The scheme, hatched around the middle of 2008, involved a “dear friend” of the Nazarians, Alex Sennett, who set up a general contracting company called Empire Roofing and Restoration.

Sennett, who had never done any contracting, then signed multimillion-dollar contracts with Nazarian’s company, Eastwood Mall, to do roofing restoration work.

Sennett used those documents to try to get a grant, which he would have used to hire a real contractor. He never did raise any cash.

Nazarian also used the documents to ward off the Royal Bank, which was threatening to call his mortgage over the mall’s state of disrepair, and was demanding immediate corrective action at a cost of about $3 million.

To make Empire appear an active company, another contractor who had done roof work returned $80,000 Nazarian had paid him.

Nazarian then gave the money to Empire, which it paid back to the contractor, Glen Day.

“You took part in this series of financial transactions in order to make it look like Mr. Day was doing work for Empire,” said commission counsel Peter Doody.

“Why was it necessary to go through this bit of a song and dance?”

“There was no song and dance. Completely legitimate. We were giving a chance to our friend to find a grant for us,” Nazarian said.

“We were struggling to survive. We were knocking every door possible to get help.”

“It was a false way,” Doody said.

“How could we get a grant if we don’t have another company?” Nazarian responded. “Eastwood was paralyzed.”

Any money raised by Sennett, whom Nazarian called an educated businessman, would have been used to finance the badly needed roof repairs at the mall, the owner insisted.

“There’s no hanky-panky or any other reason beside this,” Nazarian said.

“We did not cheat anyone.”

At the same time, Nazarian said he realized the scheme looked sketchy, so he went to his lawyer, who told him to give up on it.

Nazarian, who said the entire plan was Sennett’s idea, followed the lawyer’s advice.

“How could a company borrow money and pay himself as a contractor to do the job,” Nazarian said. “It doesn’t make sense.”

The inquiry is looking at the collapse of the mall last summer that killed two women and injured several others.


 
Filed under:

Sign in to comment.