(Toronto, Ontario - June 19, 2008 ) - One of the RCMP's Greater Toronto Area (GTA) Integrated Market Enforcement Teams (IMET) has laid fraud charges against several former executives and employees of Royal Group Technologies Limited (RGTL).
The GTA IMET has charged six individuals with defrauding the Royal Group Technologies Limited (RGTL) company of over $29 million. This IMET investigation was conducted in conjunction with partners from the Ontario Securities Commission, Canada Revenue Agency as well as the Public Prosecution Services of Canada.
"This type of complex investigation only comes together with the dedication and cooperation of many partners..... we are proud of the work being done by our teams to help ensure the integrity of Canada's financial markets," said Supt. Kevin Harrison, officer in charge of GTA IMET.
The fraud charges stem from the individuals' alleged involvement in two distinct transactions: the Vaughan West Land Deal and the Premdor Warrant.
The GTA IMET has charged four individuals with defrauding the Royal Group Technologies Limited (RGTL) company of approximately $27 million dollars.
These fraud charges pertain to criminal activities which allegedly took place within the Royal Group Technologies Limited (RGTL) company between 1997 and 1998 (October 10th,1997 and November 20, 1998).
Charged with fraud are:
1. Vittorio (Vic) De Zen - Founder of Royal Group Technologies Limited (RGTL) and former President and CEO.
2. Douglas Dunsmuir - former General Counsel and former President of RGTL.
3. Gary Brown - Former Chief Financial Officer
4. Ron Goegan - Former VP Corporate Finance and former Chief Financial Officer.
It is alleged that the above mentioned individuals, who were working for/with Royal Group Technologies Limited (RGTL) of Ontario at the time, did "by deceit, falsehood or other fraudulent means" defraud RGTL of $27,390,500.00 ($27 million 390 thousand 500 dollars).
The criminal charges stem from a land deal involving the Vaughan West lands. This land was allegedly purchased by individuals closely associated to RGTL through an Ontario Numbered Company (1260392 Ontario Limited); that same numbered company (which owned the land) was later sold to RGTL at an inflated cost.
ADDITIONAL CRIMINAL FRAUD CHARGES
In addition to criminal fraud charges laid against former Royal Group senior executives, the GTA IMET has also laid separate criminal charges under Section 380(1)(a) of the Criminal Code of Canada against five (5) individuals (some of whom are mentioned in the previous charges) for their alleged participation in a scheme to defraud the RGTL company of just over two million dollars - $2,027,202 (2 million, 27 thousand, 202 dollars).
These charges pertain to allegations of criminal activities between 1998 and 2003 (May 1, 1998, and March 1, 2003).
Charged are:
1. Vittorio (Vic) De Zen - Founder of Royal Group Technologies Limited (RGTL) and former President and CEO.
2. Douglas Dunsmuir - former General Counsel and former President of RGTL.
3. Ron Goegan - Former VP Corporate Finance and former Chief Financial Officer for RGTL.
4. Luciano (Lu) Galasso - Former Vice President and "Tax Specialist' for RGTL.
5. Gordon Brocklehurst - Former Director of Accounting for RGTL.
The fraud charges all relate to the sale of a RGTL subsidiary (Steelwood Doors) to Premdor Inc. As part of the purchase, Premdor Inc. issued a "Warrant" to RGTL to purchase 200,000 Premdor shares. The "warrant' went to Royal Group Technologies Limited (RGTL) but was never entered into the company books. Later, the warrant was allegedly exercised at a set price by the senior executives and employees and sold into the market; benefitting themselves and allegedly defrauding RGTL and committing an offence.
IMET Program Leader C/Supt. Stephen White says, "It is our hope that these types of results will act as a strong deterrent by demonstrating that Canada's financial markets are being policed. IMETs, in partnership with the public and private sectors, are doing considerable work in helping to ensure the integrity of Canada's capital markets. The charges laid today illustrate the scope and complexity of the work being done by IMET teams across the country every day. Our members are dedicated to detecting and deterring market fraud.
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For further information please contact;
Sgt. Marc LaPorte
RCMP "O" Division
Media Relations Officer
Office: (416)790-3200
Mobile: (416)992-4409
or visit:Integrated Market Enforcement Teams
