Crown, defence make sentencing arguments in Winnipeg man’s decade-long, million-kilo auto-parts sales fraud

A Winnipeg business manager who diverted more than one million kilograms (2.4 million pounds) of auto parts to scrap dealers and pocketed the proceeds with two other men should go to prison for 3½ years, a judge was told Monday.

Michael Silva, 50, previously pleaded guilty to one count of fraud over $5,000.

Silva was general manager for BBB Industries, a company that purchased used auto parts such as starters and alternators. The parts were “refurbished” at plants in Mexico and then sent back to the company’s Winnipeg distribution centre and resold.

Court heard over the course of nearly 10 years, beginning in 2013, Silva, the U.S.-owned company’s most senior Canadian employee, “organized and facilitated” the diversion of 82 shipments of unrefurbished auto parts totaling 2.4 million pounds to purchasers who paid Silva, a co-worker and another accused a total of $940,000.

As general manager, Silva did not document the incoming shipments, which netted him $189,000.

The scheme unravelled in August 2022 after BBB received an anonymous tip and launched an internal investigation. Silva was fired the following month. Police arrested him in May 2023.

Silva “exploited his position of authority for his own personal enrichment,” Crown attorney Eric Hachinski told provincial court Judge Mark Kantor.

In a victim impact statement, Steven Mesarick, executive vice-president of TERREPOWER, the company that recently bought BBB, said Silva’s “sustained and deliberate dishonesty” had a “corrosive impact on company morale.”

Silva “was not simply a regular employee….He had a tremendous amount of responsibility and autonomy,” Mesarick said.

The diverted auto parts were sold at scrap value, meaning the financial losses to the company were far greater than the sum pocketed by Silva and his co-conspirators, Mesarick said

There is no evidence Silva was suffering from financial hardship, illness, or an addiction, Hachinski said.

“That almost makes it worse — there is nothing driving this but personal gain,” he said.

Defence lawyer Jonathan Pinx urged Kantor to sentence Silva to two years house arrest and three years probation. Pinx argued that sentence, when added to the time he has already spent on bail, would amount to nearly eight years under court supervision.

A conditional sentence served in the community would better allow Silva to pay restitution and support his wife and two children, he said.

“He has, quite frankly, demonstrated that he can be rehabilitated and is not a threat to the community,” Pinx said.

Kantor will sentence Silva on June 22.

dean.pritchard@freepress.mb.ca