Empire built on kiting cheques: police

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This article was published 14/03/2009 (6240 days ago), so information in it may no longer be current.

The arrests this week of former Winnipeg businessman David Wolinsky and three others in what police say was a massive fraud scheme is seen as good news for a group of investors now suing him and Assiniboine Credit Union.

Lawyer Dave Hill said the evidence that comes out in the trial of the four men will help several Winnipeg individuals who lost millions by investing in companies that Wolinsky operated.

"The evidence that comes out at a criminal proceeding often times can help a civil case," Hill said.

Winnipeg police announced Friday that Wolinsky, the former chairman of Protos International and Maple Leaf Distillers, has been charged with fraud and conspiracy to commit fraud. Also charged are David Mollins, a former chief financial officer of Protos, Barry Milne, a former chief financial officer of Maple Leaf Distillers, and Clarke Culbertson, the former chief credit officer of Astra Credit Union, which has since merged with Assiniboine Credit Union.

Hill represents several prominent Winnipeggers — including Thomas Steen, plastic surgeon Dr. Ken Murray and consultant Max Feierstein.

Winnipeg police described the fraud as a cheque-kiting scheme where cheques totalling $300 million were circulated in and out of the accounts of three companies controlled by Wolinsky, between 2004 and 2006. The carefully timed movement of cheques gave the impression to Astra officials that the three companies had more funds than they actually did, allowing the three companies to increase their line of credit. It is alleged that the writing and cycling of cheques enabled Wolinsky to borrow more money than was authorized.

Police allege that as a result of the fraud, Astra lost $3.9 million.

The charges against all four individuals must still be proven in court.

Wolinsky, who moved to White Rock, B.C., was arrested by RCMP in B.C. and flown to Winnipeg to be charged.

Allen Godfrey, executive vice-president and chief financial officer at Assiniboine Credit Union, said the charges against Culbertson supports the credit union’s position that no other credit union employee was involved in the scheme.

"What we’ve been saying since the beginning is that there was one senior (Astra) official involved in something that was inappropriate," Godfrey said.

Godfrey said the credit union alerted Winnipeg police to its suspicions in 2006 and co-operated with the investigation.

Maple Leaf, once touted as one of the fastest-growing companies in Manitoba, was placed into bankruptcy last year. It was subsequently sold to a Trinidadian producer of rum and bitters, Angostura Ltd.

Salisbury House has since been taken over by new owners.

The charges are just part of the mountain of legal troubles facing Wolinsky. In addition to the civil action by the investors, he also filed for bankruptcy in B.C. last month.

aldo.santin@freepress.mb.ca