Conflicts of interest and breaches of ethics that the Caisse de dépôt accuses his former number two of the real estate go well beyond what she had up until now hinted. The ex-CEO of the subsidiary Otéra Capital Alfonso Graceffa, would even be granted for more than$ 11 Million in private loans with his own money without declaring it.
This is just one of the many revelations contained in the defence of the bas de laine Quebecers, in the context of a continuation of 7.35 M$ of the former boss of Otera for ” wrongful dismissal “.
This document also throws a new light on the remarks of Michael Sabia, who has said that the problems of Otera were his “worst memory” as the CEO of the Fund when he announced his departure from the surprise, in November 2019.
The wool socks Quebec describes Graceffa as a leader in the “compass ethics of balance” who was made to contribute $ 15,000 in cash by a relative of the criminal underworld, in full knowledge of the facts.
The financial institution recognizes that ” Otera has had excellent performance “, while Graceffa was at the controls, from 2012 to 2019. She insists, however, on its ” misunderstanding and obstinate notions of conflict and appearance of conflict of interest “.
Stingy with details
This whole case stems from a series of reports on the ethics in Otera, published by our Bureau of investigation in the winter of 2019. These articles have prompted the Caisse to trigger a broad internal investigation, which has cost$ 5 Million and led to the dismissal of Alfonso Graceffa.
At the end of may 2019, Michael Sabia has unveiled a summary of the investigation report.
The boss was stingy with details, demonstrate the allegations of the explosive contained in the defense of the Fund in pursuit of Graceffa.
These new insights also highlight important omissions Otéra in his replies to the Journal, in February 2019.
Our Bureau of investigation, today unveils seven new revelations contained in this defense and the examination that has been subjected to the ex-CEO, Otéra last October and placed on the record of the court.
Several of them involve an old “friend of business” Graceffa, the sponsor and broker Thomas Marcantonio, both client Otera and partner of the former CEO in his personal projects.
Graceffa has itself provided $ million in private loans to clients of brokerage companies of Marcantonio, according to the defense of the Fund. Funding was still in progress when his bosses have suspended, after our reports of February 2019.
In interrogation, the questions of the lawyer, Mason Poplaw has forced Graceffa to detail his relationships with two other “business friends” never reported.
First, the developer and owner of hotels Pierre Varadi, to which the Fund has loaned hundreds of millions of dollars. Then, Donald Kattan, a lawyer who collects the clients suspected of money laundering.
I Poplaw wanted to know why the former CEO had invited all on his expense allowance, at the restaurant Helena in Old Montreal, in August 2014.
“Listen, I don’t remember,” replied Graceffa in interrogation.
For the moment, the record does not elucidate this mystery. The parties will meet in court in July.
– With Philippe Langlois and Andrea Valeria
A real nightmare for Michael Sabia
On the 12th of November last, Michael Sabia created the commotion by announcing he would resign from his position as president and CEO of the Caisse, a year earlier than expected.
He said the same day to the prime minister, taken aback, according to what was our Office of investigation at the time.
In the evening, he confided to the head of the antenna Pierre Bruneau as his worst memory at the head of the Fund was ” the difficulties to Otera “.
“Three people have broken the bond of trust, they were found to have contravened our values of integrity,” he said. Without naming them, it was the ex-CEO, Otéra Alfonso Graceffa, the ex-vice-president Martine Gaudreault and the economist Edmondo Marandola, suspended after the reports in the Newspaper, and then laid off.
The problems of governance in the real estate loans have so greatly shaken Michael Sabia.
“Unfortunately, The Journal de Montréal has done an excellent job “, recognized it at a press conference in may 2019.
The Fund, however, remained secretive about the extent of abuses that have undermined the reign of Alfonso Graceffa at Otéra, in spite of a broad internal investigation, which has cost$5 Million.
Under the leadership of Michael Sabia, Graceffa had become the man of confidence in the real estate, at the time CEO of Otera and head of business units at Ivanhoe-Cambridge, the admiral’s ship that holds skyscrapers and shopping malls.
Yet in October 2019, the lawyers of the Fund questioned in the framework of its continuation.
His confidences were done wrong : millions $ in private loans granted under the nose of her employer, multiple potential conflicts of interest, the recovery of a debt in cash from a close to the criminal underworld…
Less than three weeks after Michael Sabia announced his departure from surprise, to go lead the Munk School of Global Affairs and Public Policy at the University of Toronto.
Six months later, only documents filed with the courthouse in Montreal to understand a little better the extent of the flaws in governance that have undermined Otera under his reign.
Seven other breaches of ethics to be kept secret
The Fund reveals several potential conflicts of interest and excesses in the governance of Otera
The former CEO of the Caisse, Michael Sabia, has been very discreet when he presented the results of an extensive internal investigation into the drifts ethics within Otéra Capital, in may 2019. Documents of court allow today to learn more on the failing governance of the former boss of the subsidiary, Alfonso Graceffa.
1. It approves the draft of his partner
In February 2019, our Bureau of investigation reported that Otéra has funded nearly$ 44 Million for a project co-owned by Thomas Marcantonio, an old partner of the CEO of the firm, Alfonso Graceffa.
The subsidiary of the Caisse had first ascertained that Graceffa ” has not participated in any way in the processing of this case [sic] “. In the facts, his statements out of court examination reveal that the ex-CEO has himself signed a document authorizing the loan to its “business friend,” as he described himself.
Graceffa ensures that it has approved the funding for ” inadvertent “. “Someone gave me five or six of these documents and I signed them without looking at what I was signing “, he says in the interrogation.
In addition, the independent investigators that has mandated the Caisse have also found another version of the document approving the loan to Marcantonio. The claw of the CEO had mysteriously disappeared.
“How your signature has been removed […] ?” asks the lawyer Mason Poplaw in interrogation. “No idea,” replied Graceffa.
2. The” friend of business ” affected commissions
Alfonso Graceffa acknowledges that its “business friend” touched likely of the commissions on the tens of millions of dollars in loans that he brings to Otéra Capital.
In fact, the company of Thomas Marcantonio, MFCI, was acting as a broker for a subsidiary of the Caisse. The company was of customers in the search for funding and headed for Otera.
According to the transcript of the interrogation, Alfonso Graceffa has never declared this potential conflict of interest when he became president and chief operating officer in 2012, and then CEO in 2013.
However, Marcantonio affected is likely to be a commission of broker when Otera decided to grant a loan to one of its customers, was recognized by the former CEO in the examination. The transcript does not, however, know how much money the partner Graceffa was able to win.
The lawyer of the Fund lists a series of five loans granted to clients of Marcantonio between 2015 and 2018. The funding was able to retrace our investigation Bureau, which have sometimes participated to other lenders with Otera, totaling almost$270 Million.
Among the customers that Marcantonio has led to the firm figure Francis Charron. Otéra has been granted for more than$ 150 Million in funding for the projects that he has managed, between 2016 and 2018.
This promoter was almost part of the family. Before to be a client of the Caisse, he worked with Alain Cormier, spouse of the former vice-president of Otera, Martine Gaudreault. The wool socks Quebec was also at the door after the revelations of our Office of investigation on the business relationships of the couple with the mafia.
As a broker, Marcantonio has even obtained a loan of$ 44 Million Otéra for his own project of a residence for seniors in Saint-Jean-sur-Richelieu.
3. “Small” loans between friends
Not only Marcantonio found opportunities for Otéra Capital, but it was also to Alfonso Graceffa himself. As the CEO of the subsidiary of real estate loans of the Caisse was also in… the real estate loans.
Graceffa has as well granted for more than$ 11 Million in loans through the companies mortgage broker Marcantonio, without a word to the Cashier.
In march 2019, the CEO of Otera was always a ready assets of more than$ 2 Million in the course with a client of his associate, the project of condos in The Aventura, in Quebec. This development, as the subsidiary of Otéra Capital, the financial Corporation MCAP, has also funded, belongs especially to Stephan Huot, a promoter of Quebec have increased the skirmishes with the authorities.
All in all, Graceffa would have participated in “seven or eight” funding with the brokerage companies of Marcantonio, according to the interrogation out of court, filed in his lawsuit against the Fund.
“At first it was small amounts : 100, 200 000… And then it became bigger, the funds that he asked me were more important,” says Graceffa.
According to our research, the name of the former CEO does not appear in any document associated to these loans with the land registry. The two partners signed a number of agreements of trust ” (” trust agreements “). These arrangements entrusted to Marcantonio the responsibility to invest the fund Graceffa, who remained a silent partner.
In interrogation, I Poplaw asks him why he has never said that other business relationship personal with Marcantonio when he became CEO, Otéra.
4. An old friend hotel
In its lawsuit, Alfonso Graceffa revealed himself as the Caisse de dépôt et placement criticized his friendship, which is not declared with one of the most important real estate developers in Quebec, without identifying it.
The interrogation you learn that it is Peter Varadi, one of the largest owners of hotels in Montreal… and one of the biggest clients of Otéra Capital, headed by Graceffa.
Companies Varadi have received almost$ 270 Million in loans from the firm since Graceffa became president in 2012. The wool socks Quebec has funded five of its towers in the centre of the city, which is home to two Marriott, a Hilton, a Holiday Inn and condos.
From left to right, the tower C Lofts, the Holiday Inn & Suites and apartments at Liv, the Courtyard by Marriott, Hilton Garden Inn and The AC Marriott and the apartments Allegra.
Varadi is another old ” friend of business “, explains Graceffa in the interrogation. It was known at the time where he was leading the team of commercial real estate loans of the National Bank, from 1999 to 2008. The promoter was a big customer.
The two men had met “two or three times per month” in the evening, for a drink at the bar XO of the hotel Saint-James, close to the headquarters of the Fund in the Old-Montreal.
5. Discussions on their own loans
An apartment building of Alfonso Graceffa and Thomas Marcantonio, avenue Fairwood in Pointe-Claire.
Our Bureau of investigation has already revealed that firms of Alfonso Graceffa and his associates had received$ 9.2 Million of loans to the financial Corporation MCAP, a subsidiary of Otéra Capital, while he was the director of the board of directors.
According to court filings we obtained, the Caisse de dépôt et placement du Québec accuses Mr. Graceffa to be ingested in discussions with MCAP on at least two of these financings.
In the examination out of court, counsel for the Fund, Mason Poplaw, the questions about e-mails he exchanged with MCAP before loans are granted.
“After reviewing these emails, would you say that in fact, you have started these discussions and continued until it offers you to have a conversation about the financing of this property ? request Me Poplaw in interrogation.
– I’ve only asked if they were interested, ” says Graceffa.
MCAP has finally granted two loans of 740 369 $ it is all about. The firm has thus waived its policy, since it does not usually finance less than two million dollars, reports the Caisse in its defence.
It also mentions that Graceffa “benefited from an exemption to a measure of compliance with anti-money-laundering money for politically exposed persons” when MCAP was granted these loans.
In interrogation, the lawyer for the Cashier asks him if these loans to its own companies do not pose a problem.
“Have you declared the conflict of interest ?” stresses Me Poplaw.
The lawyer Graceffa, Marie-France Tozzi, objected : “Excuse me, a judge will determine if it is a conflict [of interest] or not. ”
6. “I always collect “
In may 2019, the Caisse de dépôt was alleged that one of the officers laid off – without the name – of having accepted $ 15,000 in cash in his offices at the hands of a contractor with a criminal history.
In the lawsuit that he was then commenced, the former CEO of Otera announces that it is he who has received this money in August 2017, but it suggests that the bank notes were not in his pocket. “[Graceffa] wanted to help his brother to collect an amount of money that he was owed, ” says the lawsuit.
Over the issues of the Fund in interrogation, Graceffa admits that the money was intended to reimburse a company that he held himself to “50 %” and that he controlled the finance, Construction Sainte Gabrielle inc.
In its lawsuit, Graceffa also states that he was unaware that the contractor who had the money, Jean-Denis Lamontagne, had already been convicted for drug trafficking and that he was insolvent.
During the independent investigation, Graceffa has yet admitted that he had documents proving that the debtor had a criminal past, reveals the Caisse in its defence.
It is only in 2016, Graceffa and his brother had continued Lamontagne to recover their money. During these procedures, the contractor said that he was on the verge of a “second bankruptcy” and that he had no bank account, mentions the Fund. It would also have implied that he had ” gambling debts […] against the organized crime “.
Lamontagne also said that it was to repay his debts, especially to the brothers Graceffa, ” by third parties “. However, he refused to identify them, “even under penalty of contempt, intimating that his financial belonged to the criminal underworld,” said the Cashier.
An individual without a bank account could he really repay Graceffa with a cheque ? During the internal investigation to the Cashier in any case, he explained to the lawyer Stéphane Eljarrat that he wished to recover his due, according to the defence. “I always collect. “(” I want still “), he testified.
7. Partner suspect in a residence for the elderly
The seniors ‘ residence King David of Côte-Saint-Luc belongs to Alfonso Graceffa, his ex-wife Josie Solito, Thomas Marcantonio and the lawyer Donald Kattan.
In mortise, Donald Kattan.
Since 2005, Alfonso Graceffa is a co-owner of a residence for seniors with a lawyer that the royal Canadian mounted police suspected him in 2011 of aiding the brother-in-law of the tunisian dictator, to hide his fortune.
Donald Kattan holds 10% of the units of the residence of King David, Côte-Saint-Luc. The ex-wife of Graceffa and his partner Thomas Marcantonio are also owners.
The lawyer represented Belhassen Trabelsi, brother-in-law of the former tunisian dictator, Zine el-Abidine Ben Ali, when he fled to Canada. The RCMP raided his office in 2011, reported The Press at the time. The police sought documents demonstrating that he had hidden the money to Trabelsi.
Graceffa grants-examination that he knew that Kattan had been raided in a money laundering investigation.
“My understanding is that the government has done research and found nothing,” he says.
I Poplaw asks him then if he has done other checks on his partner. “No” says Graceffa.
In the 1990s, Kattan has had another customer doubtful : the suspect drug-dealer american Tico Rodriguez. In 1993, the lawyer has bought for him a luxurious shopping centre in Westmount, the Complex Source, with the profits of the drug, reported The Gazette in 1995.
In interrogation, Graceffa explains that he has known Kattan as a neighbour, in the prestigious street Maplewood borough Outremont. “It is a friend of business,” he says.
The ex-CEO ensures that the residence of King David is his only investment with him.