According to Crawford’s complaint, the Bank of Montreal and Allied Canadian and his accountant Michael Perris were apparently involved in a triad business relationship that followed scripted procedures.
In a comparison of Allied Canadian ‘How to Subscribe’ instructions to sales representatives versus BMO ‘No Wrongdoing Guidelines’ for ‘Off-site Loans Closings’ the only apparent difference is that selling agents want client signatures while Banks need them notarized. BMO documents for what they describe as a ‘Point of Sale’ for selling loans seemingly refers to Allied as the ‘Agent / Promoter’.
Procedure Step IV ‘The promoter is to complete Affidavit of Subscribing Witness’ for a legal record of a witnessed and notarized subscriber’s signature that according to BMO must be completed by the ‘Promoter’ to be legal. It’s a game of logic. Completing a ‘Signature Affidavit’ involves three people watching each other while writing their signatures including a ‘Commissioner for Taking Affidavits’. But not always. In two steps, it may only involve two people at a time, with a witness as intermediary.
If an Allied ‘Selling Agent’ were to witness a client’s written signature on an investment agreement and return it to the ‘Promoter’ for a commission, notarizing a signature might be obtained on the way, or at Allied Canadian for the agent / witness to be present. If BMO instructions are literally correct, ‘The promoter is to complete Affidavit of Subscribing Witness’ and if the ‘Promoter’ is a ‘Notary’ then BMO ‘No Wrongdoing Guidelines’ work as written, and legal as required.
What fun! How rewarding: The stuff of storybooks and movies. A Bank of Montreal ‘Signature Affidavit’ seemingly used for a loan to Crawford appears to be notarized by Mr. Michael Emory, President, Allied Canadian, with Mr. Michael Perris as the apparent witness to Crawford’s signature. As a Chartered Accountant ostensibly working for Cheney, Glenn and Graydon engaged by Crawford for accounting and tax reporting services, the ICAO wanted to determine whether commissions were paid to Mr. Michael Perris from Allied Canadian.
Simple proof. That is what the ICAO investigation had focused on. But Mr. Perris had refused to provide accounting and tax records. That is why: and what the May 15, 2006 public ICAO hearing was all about.
A possible breach of conduct in non-cooperation of an ICAO member chartered accountant under investigation. Maybe it was just coincidence it happened only a week after the resignation of the Bank of Montreal’s Chief Executive of Commercial Lending and Wealth Management Services. And maybe it was normal for an ICAO Public Relations person to be in attendance … The actual record is available from ICAO transcript services. But here is the complainant’s appreciation of events from personal notes:
“ICAO Hearing May 15, 2006. File Number 542401.
The hearing started with a brief statement of the charges followed by a longer counterclaim offered by the accountant’s defending lawyer that basically wanted to nullify the proceedings. Immediately.
From the lawyer’s point of view the hearing was unnecessary as Perris had cooperated with the investigation with best information available and the delays were due to the personal circumstances of a divorce and moving home and office to a new location. The lawyer continued to plead that the hearing should not be public as the complainant was well known to talk and disseminate materials for media publication. Moreover, Crawford’s presence would give him access to privileged information about a case in litigation over his debt to BMO.
There was something of a disconnect between ICAO charges against the accountant and the pleadings which focused on the complainant and his presence in a public hearing. As Crawford understood it, the lawyer wanted the proceedings stopped on the grounds it would disclose sensitive and confidential information. (Yes. That’s why I’m here). But that wasn’t it, the ICAO only wanted to remove a barrier to obtain essential evidence and asked that the hearing continue on the basis that it was a public hearing solely concerned with failure to cooperate.
The ICAO clarified the scope of the hearing and that the investigator would be the one and only witness, not Crawford who wasn’t required to give testimony solely concerning ICAO investigative procedures. The chair asked for a recess for consideration before continuing. Crawford waited in the corridor wondering what would happen next. The door opened and Council walked up to Perris and his lawyer to explain the decision to continue the hearing based on a narrow focus on his conduct during the investigation, not the essence of allegations. So, the proceedings started with a restatement of non-cooperation and a question of how do you plead, “Guilty, or not guilty as charged?”
Perris simply stated, “Not guilty”.
As predicted, the ICAO investigator was the one and only witness to answer questions put forward by the ICAO. It started with, “Please explain the selling of investments in this case.”
It was apparent Mr. Perris didn’t like the reference to ‘selling’ in the question and from Crawford’s vantage he watched Perris nudge his lawyer and whisper, ‘See’ in easy ‘read my lips’ lingo.
Crawford listened to the investigator’s overview and took notes. That Crawford had become aware of a debt to the Bank of Montreal concerning an (Allied Canadian) investment product sold to him by Mr. Perris. Following a complaint the investigator met Perris who admitted selling investments to accounting clients and others under Mikary a wholly owned company by his wife. Perris explained he and his wife took commissions from the sales. In the meeting, the investigator asked for Mikary documents that related to the sale of investment products.
When asked for an (Allied) ‘Offering Memorandum’ Perris claimed he had shredded them all … except for one that might still be at Mikary. Later, in another meeting Perris advised that Mikary received income from sales but he had nothing specific and could only gave an estimate of sales. He refused to provide a list of investors and requested tax returns. He explained that Mikary operated from his matrimonial home where his estranged wife was in possession of the documents.
Mr. Perris had promised to provide information by month-end but then wrote the ICAO choosing to decline sending the requested information. In a follow-up call Mr. Perris said his wife was being uncooperative and that she would not provide the information. Perris also asked the ICAO to not contact his wife due to the sensitivity of their relationship. That pretty much covered the ICAO questioning of their investigator assigned to the case. The requested items were simple and specific and according to the ICAO, essential to complete the investigation. It hadn’t taken long, and then the defense had their turn for questions. The lawyer started on the basis that Mr.m Perris had provided enough information for an ICAO inquiry. The defense covered a number of points, the relevance of the evidence, the possibility that the evidence was past a statute of limitations, and that Mr. Perris had neither power nor possession to provide the required documentation. With respect to the relevance of the information, the defense asked the witness to explain why the numbers were significant when Mr. Perris provided verbal estimates in context of wages calculated for minimum Canada Pension Plan contributions. The investigator responded that Mr. Perris had given various estimates and that the Mikary books and personal tax records would provide required confirmation. Perris’s lawyer provided clarification: that Mrs. Debbie Perris’s sold investments as a Limited Market Dealer with Mikary receiving commissions from the sale of investment products rather than her husband, Mr. Perris who only received referral fees as nominal compensation. The cross examination also questioned ICAO’s approach to obtaining the evidence they were looking for. A key defense was the fact that the accounting records were held by Mrs. Perris who as the sole owner of Mikary Investments, was in the midst of a messy divorce and was not cooperating. The lawyer defined the scope acting for Mr. Perris in this case, and also acting for Mr. Perris in the divorce proceedings. The lawyer went on to describe the family relationship as both hostile and acrimonious and the main reason why Mr. Perris hadn’t been able to allow the ICAO to interview Mrs. Perris in respect of the sensitive situation.
Then the lawyer question the ICAO Statute of Limitations, pointing out that Mr. Crawford had waited until the Bank of Montreal had made a demanded on an (Allied) investment loan in 2001 before making any complaint. Why hadn’t he complained around 1991 when the evidence would have been more accessible? The investigator responded that ICAO investigations were authorizedm to ask for records that went back several years.
The wriggle questions continued: There was the important point of not providing evidence based on legal advice. The lawyer wanted to know why the ICAO had not used other means to find and speak to Mrs. Perris. Or, approach Revenue Canada for tax records given that Mr. Perris had done his best to find and provide all he had available. The lawyer made a statement, “Mr. Perris is almost 100% sure the information has been destroyed.” And asked, “Is it not difficult to believe the documents may not exist from such a long time ago?” The investigator replied, “No, it’s not difficult.” But, here the ICAO interjected the lawyer to not question an investigator on ICAO policy. Perris’s lawyer shuffled through notes and asked if Revenue Canada had specifically advised that Mr. Perris’s tax history would be available for historical records. “Yes.” Perris’s lawyer went on to ask, “What is the relevance of the amount?” The investigator explained that Perris had claimed only small amounts he wanted consistent with Canada Pension Plan. But in conversation they appeared to have changed and were much larger. The relevance of referral versus other income would create a conflict of interest.” Mr. Perris’s lawyer looked at Mr. Perris and said no further questions. The chair followed procedure and asked for the defendant’s witness. But the lawyer said Mr. Perris chose not to take the stand. mThe next part of the hearing allowed for the ICAO to respond with a summation based on ICAO regulations that referred to broad powers for access to documentation defined in Subsection 10. Concluding:
“It is not up to a member under investigation to determine sufficiency of information regarding ICAO procedures ollowing a complaint from a member of the public. My friend’s (Perris’s Lawyer) suggestion appears to be that the data is outside the a statute of limitations and therefore not relevant. The point is that Mr. Perris is holding up the investigation. He himself could go to alternative sources to provide the information. In his email of September 29th Perris appears to be taking a position on legal advice that providing information would breach confidentiality, despite our assurance that it would be maintained by the committee. Mr. Perris appears to be suggesting that the investigation is beyond the scope of the ICAO. That the ICAO is stepping beyond its original scope. Perris has no authority to define scope. He also indicates he has cooperated in attending meetings. But after that he has not cooperated as his letter stating, “Must decline sending requested information”. His submission of some information on May 10th is not sufficient and is inconsistent with other verbal declarations.
It requires more investigation in questions and it will open further avenues of investigation. With respect to obtaining documents from Mrs. Perris, that my friend (the Lawyer) suggested could have been followed up by the ICAO, Mr. Perris was asked to provide an address and telephone number that could have changed. His position is that a strained and acrimonious situation has prevented him from obtaining requested documents. While the ICAO is sensitive to the situation, Mr. Perris has in effect obstructed the investigation by not giving us permission. We intend to pursue the investigation with or without his permission. Mr. Perris’s suggestions for the ICAO to obtain information by other methods are not supported by evidence. And failure to cooperate has continued up to today despite a partial submission of material last week … it does not change what has occurred in recent months. The powers of the committee are quite broad. We will determine at what point will the evidence is the best it can be. We submit a breach of professional conduct and a range of fine that is not seen as a license but rather a penalty and a deterrent.
We also submit a letter requesting full cooperation is appropriate: in words that clearly allow for the completion of the investigation regarding his wife and other witnesses and other documents depending on what might be revealed. With respect to bylaws for naming that should be published in all but rare and unusual cases. Nothing here justifies not publishing a name. With respect to costs, Mr. Perris should bear the costs as the hearing was unnecessary and the ICAO should not suffer based on the conduct of a member. Our costs are relate to the hearing rather than the costs of investigation. I would hand out our submissions. The hearing went into recess for deliberations and a verdict after lunch. After which came the ICAO decision: Guilty as Charged.” It was over. All done in few hours.
What next?
The Bank of Montreal had made it clear they wanted a ‘Summary Judgment’ against Crawford to pay the outstanding debt. It would be a neat trick for them to avoid being in court with swindled investors as witnesses against Mikary Investments and Mr. and Mrs. Perris and Allied Canadian and Mr. Michael Emory, et al. But it would be easy according to the law. The onus was on the debtor to sway a judge that there was much much more to this case than a bad debt in default by someone simply refusing to pay. Crawford left the chambers of the Institute of Chartered Accountants thinking he was glad of the motto they live and work by: Guilty as charged.
What Next, Eh?
Crawford had another book in his head, about pre-scam alerts …
Copyright Anthony Crawford and Associates Inc. © 2006