Ex-businessman gets prison after near decade-long auto parts scam

A Winnipeg business manager who spearheaded a nearly decade-long scam that diverted more than one million kilograms of auto parts to scrap dealers has been sentenced to 42 months in prison.

“Other than personal gain, I am not aware of any further explanation for his offending behaviour,” provincial court Judge Mark Kantor said before ordering 50-year-old Michael Silva into custody.

Silva had pleaded guilty to one count of fraud over $5,000.

Kantor said he gave little weight to a psychological report that concluded Silva, who had no prior criminal record, was a very low risk to reoffend.

“I find this at odds with the facts of this case,” Kantor said. “Mr. Silva continued a pattern of fraudulent and deceitful behaviour for close to a decade, right up to the point he was caught.”

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.

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 totalling more than one million kilograms 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.

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.

Court heard Silva did not suffer from a drug or gambling addiction and was not in financial difficulty when he embarked on the fraud.

Defence lawyer Jonathan Pinx said Silva has strong family supports and will abide by an order that he pay $189,000 in restitution.

“I accept Mr. Silva is remorseful for his actions… and has very good prospect for rehabilitation,” Kantor said.

dean.pritchard@freepress.mb.ca