A former investor in a pair of failed Winnipeg-based companies is hoping to reopen a high-profile cheque-kiting case and have a 2012 settlement declared null and void after new evidence has come to light.
Max Feierstein, a local information-technology consultant, is seeking punitive damages of $1 million from Assiniboine Credit Union, repayment of his original loan of $318,000 plus special and general damages and associated interest.
In a statement of claim filed in Court of Queen's Bench, Feierstein said he was told ACU had retained PriceWaterhouseCoopers to investigate, assess the damage and prepare a report regarding a cheque-kiting scheme that took place in the early 2000s.
A Free Press investigation published in 2006 revealed hundreds of millions of dollars in cheques were cycled among accounts held by Protos, Maple Leaf Distillers and Salisbury House Restaurants, companies controlled by David Wolinsky and Costas Ataliotis for several years until 2005. Salisbury House has since been taken over by new owners.
Through his lawyer, Feierstein asked ACU to produce the report on 13 different occasions from May 2011 to February 2012. According to the court document, each time, the credit union denied such a report existed.
But after he and other investors settled with ACU last year, Feierstein discovered the PWC report and more than a dozen credit union employee interviews did exist. Had they been provided earlier, he never would have agreed to the settlement, he said.
"Now you've got fraud on top of usurious loans and cheque-kiting," Feierstein said.
He is claiming damages for "fraudulent misrepresentation" and said the settlement agreement is void for having been "obtained through fraud."
"Astra's fraudulent conduct was high-handed, callous, wrongfully induced (Feierstein) to enter into a settlement agreement and ought to offend the community's sense of fair play," the statement of claim said.
Feierstein is the only one of the investors to take this step. Others, including former Winnipeg Jet and current city councillor Thomas Steen, are not part of this claim but they are welcome to launch their own, he said.
Winnipeg police have alleged Astra Credit Union -- which merged with Assiniboine Credit Union in 2006 -- lost $3.9 million as a result of the fraud.
Allan Godfrey, ACU's executive vice-president and chief financial officer, said he is aware of the claim and is in the process of evaluating it with legal counsel.
ACU's previous statement of defence denied internal knowledge of the cheque-kiting.
"We haven't filed a statement of defence yet. Any claim we take seriously. We'll take advice from our lawyers. Typically, if there's a statement of claim, we'll file a statement of defence. We haven't made a decision yet as to the approach we'll take," he said.