At Canadian Fraud News, we report on decisions issued by Canadian Courts related to fraud, that are not reported in the mainstream media, and that contain legal issues the Canadian public and fraud recovery experts should be aware of. The following is one such story.
Nadia Minetto, AKA Arsenault, a Former KPMG Senior Accountant
According to her linked-in profile, Nadia Minetto was employed by KPMG from 1998 to 2008. In 2008, she became an account manager at PointClickCare. According to her linked-in profile, Nadia Arsenault was employed at KPMG.
Nadia Minetto, formerly an accountant with Wescom, is also known as Nadia Arsenault . PointClickCare was also known as Wescom Solutions Inc.
The Fraud Action against Minetto
The facts of the fraud perpetrated against Wescom Solutions Inc. was reported in the civil action of Wescom v. Minetto, 2015 ONSC 5568.1
On July 9, 2014, the plaintiff Wescom Solutions Inc. (“Wescom”) discovered that its trusted employee, the defendant Nadia Minetto (“Minetto”) had perpetrated a serious fraud against it.
The nature of the fraud was that Minetto, an accountant at Wescom, used her corporate AMEX card to purchase various iPhones and iPads from Apple, a supplier of Wescom, which she sold for cash to third parties including the defendant Gabriel Kit Chun Fung (“Fung”).
On July 17, 2014, Wescom obtained an order against Minetto on an ex-parte basis for, amongst other things, a Mareva injunction, an Anton Piller order and an order requiring Minetto to immediately attend an examination and disclose all her assets to Wescom.
On July 30, 2014, Minetto was cross-examined on an affidavit of assets pursuant to the ex parte order. Minetto only disclosed what she did with approximately $430,000.
On October 31, 2014, Wescom obtained judgment against Minetto based on her consent. Remarkably Minetto consented to a judgment in the amount of $6,831,834.17 plus interest.
As Wescom only recovered a fraction of its loss from Minetto, it continued its action against Fung. Anyone with information related to assets held by Minetto is invited to contact Canadian Fraud News.
The Agreed Facts
Fung, along with his businesses Plus One Solutions and GF International, entered into an agreement with Wescom to conduct a summary trial of the claims made against them. As part of the agreement, Wescom and Fun agreed to the following facts:
- Minetto was employed with Wescom as its accounting manager from June 9, 2008 until July 2014.
- Minetto began defrauding Wescom at some date prior to January 2011 through the fraudulent use of the company’s corporate AMEX Card.
- In January 2011, Minetto began purchasing new Apple products using the AMEX card, which she then sold for her own personal gain.
- Thereafter, Fung began buying Apple products from Minetto.
- Minetto would advise Fung of what Apple products she had access to and Fung would indicate how many he could buy.
- Minetto would then order these Apple products and notify Fung upon acquiring them.
- At all material times, Fung owned a store, Plus One Solutions, located in First Markham Place, 3255 Highway 7 East, Unit 155 B, Markham, Ontario.
- Plus One was a retail business that sold accessories, phones, and iPads. In addition, it provided services such as the unlocking of phones and repairs.
- Of the Apple products that Minetto supplied to Fung, approximately 10% to 15% were sold through Plus One. The remaining 85% to 90% of the Apple products were sold by Fung to offshore companies in Hong Kong, to local wholesalers, to other stores and to online purchases.
- Fung had a business relationship with Eric Yip. Yip assisted Fung with the sale of the Apple products through his network. (Yip, a named defendant in the action, is also known as Samson Man Chun Yip. There is no mention in the judgment that Wesco also moved for judgment against Yip at this time).
- Fung conducted a largely cash business at his store Plus One Solutions. Fung also paid Minetto for all of the transactions in cash.
- Fung and Yip rented a “virtual office space” at 15 Allstate Parkway, Markham. They used this address, in part, as a delivery location for the shipments of Apple products.
- From April 2013 to July 2014, 224 shipments were directed by Minetto to the Allstate Address totaling $3,124,361 worth of Apple products.
Schedule 1 to the Agreement set out the dates between November 9, 2011, and July 9, 2014, on which Minetto purchased products by using a Wescom credit card from either the Apple online store or an Apple store that she would subsequently sell to Fung.
The total value of the Apple products acquired by Minetto through the fraudulent use of the Wescom credit card that she sold to Fung was $5,356,641.06.
Fung made 20% on the fraudulently obtained Apple products for a profit of $1,027,552.58.
CPA and CGA Revoke Minetto’s Licence
In its deliberations, the CPA and CGA took into consideration the enormity of the misappropriation of $6.8 million, the fact that it took place over five years involving thousands of transactions with many opportunities for Ms. Minetto to reflect on her actions but she never ceased making the unauthorized purchases on her corporate AMEX credit card until she was caught.
They held that as a trusted accountant Ms. Minetto knew how to carry out the misappropriation and misused her designation and her position of trust. Furthermore Ms. Minetto did not cooperate with the investigator for the CPA during the course of the investigation into her misappropriation.
Cost of the Investigation
The CPA and CGA submitted that the costs of their investigation and prosecution were approximately $45,000. It was Ms. Minette’s misconduct that necessitated this investigation and the disciplinary hearing. Ms. Minette’s lack of cooperation increased the costs in this case.
Ultimately the tribunal hearing the case held that costs of $25,000 were reasonable and appropriate. Given the magnitude of the misappropriation and the fact that no accounting or any other information had been provided by Ms. Minetto for the funds misappropriated by Ms. Minetto, the Tribunal determined that a three-month period was an appropriate period to pay the costs.
Locating Minetto on the Internet
The CPA and CGA held that full publicity including notice of the revocation of membership disclosing Ms. Minetto’s name, by publication on the CPA Ontario website, and in The Globe and Mail and the Toronto Star, along with publication in the local Bolton newspaper, were appropriate to protect the interest of the public.
The CPA and CGA held that there were no rare and unusual circumstances that would support nonpublication. The CPA and CGA further held that the publications will also serve as a notice to members and the public that CPA Ontario is vigilant in maintaining its reputation of integrity and the notice is also in keeping with the transparency of the disciplinary process of CPA Ontario.
As mentioned, notwithstanding that the CPA and CGA made this order, if any publication was made, they are not readily apparent with a search of the name of “Nadia Arsenault Toronto” or Nadia Arsenault Accountant” on the internet.
Full Reasons for Judgment
For the full reasons for judgment, see In the Matter of Nadia Minetto. https://media.cpaontario.ca/stewardship-of-the-profession/pdfs/minetto-nadia.pdf , and also Wescom ats Minetto, 2015 ONSC 5568.
Inquiries
For further information on this case, or any other fraud recovery inquiry, contact Canadian Fraud News Inc. at Devin@Canadianfraudnews.com .
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