- Ottawa wants to close loopholes that let terrorists, criminals use Bitcoin to commit fraud
- Scam calls target Chinese community, fraud busters warn
- Ex-MP received 'secret' cut of $12.4M deal in resort town run by his sister, OPP probe alleges
- AHS warning of text scam involving the organization
- The 6 Most Common Behavioral Red Flags Of Fraud
June 13, 2018 – At Canadian Fraud News, we report on decisions issued by Canadian Courts related to fraud, that are not reported in the main stream media, and that contain legal issues the Canadian public and fraud recovery experts should be aware of. The following is one such story.
On June 11, 2018, the Ontario Superior Court of Justice in Ottawa released its decision in civil fraud recovery action of Pradeep Merchant (“Merchant”) and Shiv Dilawri (“Dilawri”) as against Sandeep Mehta (“Mehta”). The Court gave partial judgment to Merchant and Dilawri, and found that Mehta had lost their investments funds in his dealings with organized crime figure Benedetto “Benny” Manasseri (“Manasseri”).
Dateline of the Fraud Recovery Action
In February 2012, Merchant and Dilawri provided Mehta with $60,000. Merchant and Dilawri viewed the transfer as a loan. Mehta viewed the transfer as investment.
The Court viewed the transaction as an investment because Dilawri knew that Mehta was providing the money to a third party, Manasseri, and his return on principal was based on Mehta’s investment with him. Merchant and Dilawri were also aware that Mehta was investing his own money with Manasseri.
Who Is Benedetto “Benny” Manasseri?
The Court then deemed it prudent to discuss who Manasseri was. The Court described Manasseri as a car wash operator in Ottawa that ran a side line high risk loan business under the name of Pro-Fit Financing Corporation. Pro-Fit actually was not registered as a corporation. Manasseri used the term corporation when Pro-Fit was actually just a sole proprietorship.
Mehta, knowing that Manasseri’s loan business was high risk, did not provide all of Merchant and Dilawri’s funds to Manasseri. Rather, Mehta explained to the Court that he transferred $26,000 of the $60,000, and kept $34,000 as a hedge against Manasseri not paying him back. This explanation, however, was not true, as in reality Mehta used the $34,000 for his own purposes and never invested it at all.
In a somewhat bizarre development, Mehta called Manasseri as a witness at this trial. Benedetto “Benny” Manasseri testified that he had recently been released from prison on criminal organization charges related to his loan business. The criminal sentencing decision of Manasseri is reported at R. v Manasseri, 2014 ONCJ 683 (see https://www.unodc.org/res/cld/case-law- doc/ criminalgroupcrimetype/can/2014/r_v_manasseri_html/R_v_Manasseri_2014_ONCJ_683.pdf).
The Court in the Merchant and Dilawri commented on Manasseri’s evidence as follows:
I put no weight whatsoever on Benny Manasseri’s affidavit or testimony. It is almost completely inadmissible hearsay and comes from a convicted felon who was jailed for his fraudulent operation of the very business in question. He stated that Pro-Fit was incorporated and still exists today but he has no records.
The Court held that Merchant and Dilawri’s loss was caused by Manasseri defaulting on his agreements with Mehta, and Mehta not investing all of Merchant and Dilawri’s funds as he represented to them that he would do.
No Cost Award to the Successful Plaintiffs
The Court awarded Merchant and Dilawri judgment in the amount of $34,000 as against Mehta, but refused to grant them an order for their legal costs. The Court held that Dilawri had not been honest with the Court by failing to disclose that he knew that Mehta was loaning his funds to Manasseri.
The bottom line is that Merchant and Dilawri knew that by receiving cash interest payments, Mehta was dealing with criminals, and that they were using Mehta as an intermediary because they wanted the large returns but did not want to associate directly with organized crime.
The Reported Decision
This Court’s decision is reported as Merchant v. Mehta, 2018 ONSC 3632. The decision is not publically available on-line.
It is unknown if Mehta will be appealing this decision, or if he has paid his debt to Merchant and Dilawri. It is also unknown if Mehta provided other investor funds to Manasseri.
For further information on this case, or any other fraud recovery inquiry, contact Canadian Fraud News Inc. at firstname.lastname@example.org.
Deborah McCoy – Is an investigative journalist and has over 17 years of investigation experience in both the private and public business sectors. Since joining CFN, Ms. McCoy has become a true advocate for victims of fraud and increasing the public’s awareness in fraud prevention.