Court agrees to freeze assets of high-living fraud artist

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This article was published 11/03/2020 (1653 days ago), so information in it may no longer be current.

Justice officials have won a fight to freeze the financial assets of a man who admitted to defrauding a century-old crane company of over $4 million, forcing it into bankruptcy.

In a decision released Thursday, Queen’s Bench Justice Theodore Bock ruled there are “reasonable grounds to believe,” that money former Litz and Sons CFO Peter Ramdath had deposited into a tax-free savings account and guaranteed income certificate “are proceeds of unlawful activity.”

“I have also concluded that there is no reason that it would not be in the interests of justice to make a preservation order,” Bock said.

Ramdath, 43, pleaded guilty in January to one count of fraud over $5,000. He is set to be sentenced in June.

In October, lawyers with the criminal property and forfeiture unit filed a motion seeking a court order prohibiting Ramdath and his wife from liquidating, selling or otherwise disposing of certain assets in advance of a formal decision forfeiting them to the Crown.

Ramdath opposed the motion only in respect to the two accounts, arguing the Crown had not proven money in the accounts were the proceeds of crime.

Bock said the Crown need only satisfy the court that it is “more likely than not that at least part of the cash used to fund the TFSA and GIC was acquired as the result of unlawful activity.”

Prosecutors allege that between April 2012 and October 2017 Ramdath created and entered fraudulent invoices into Litz’s accounting system to artificially inflate the credit available on the company’s lines of credit, in order to redirect funds to his own personal line of credit and personal credit cards.

Ramdath’s actions pushed the company, which was founded in 1904 and was into its third and fourth generation of ownership, into bankruptcy.

As of November 2017, Ramdath’s TFSA had a balance of $51,342. According to an investigation by receiver PriceWaterhouseCoopers, at least $18,500 of that balance was drawn from Ramdath’s TD chequing account after March 1, 2014.

“The report comments that further investigation was required in order to determine the source of the remaining funds,” Bock said. “The report did conclude, however, that the majority of the funds deposited into the TD chequing account after March 1, 2014 were primarily from sources other than Mr. Ramdath’s legitimate payroll deposits, for which Mr. Ramdath had offered (PriceWaterhouseCoopers) no explanation.”

Investigators could not determine the source of the $4,000 Ramdath deposited into a GIC in March 2017.

“In the circumstances, it is also reasonable to believe that some or all of the TD GIC, apparently acquired… when Mr. Ramdath was defrauding Litz Crane of millions of dollars, is also the proceeds of unlawful activity,” Bock said.

At the time of Ramdath’s January 2019 arrest, he owned an East St. Paul house, another on Manitoba Avenue, luxury vehicles including a 2008 Aston Martin, BMW, and Maserati, jewelry, including a $43,000 ring, designer sunglasses, handbags and shoes, and cash in several bank accounts. He also owned side businesses, including two fitness clubs.

dean.pritchard@freepress.mb.ca