In the 12 years Greg Fenske worked for Peter Nygard, he never saw or heard anything suggesting the fallen fashion mogul was involved in the sexual abuse of multiple women and girls, he told a bail hearing Tuesday.
"I understand the allegations being made, I don’t agree," said Fenske, who until the fashion empire went into receivership last March, was a director of the Nygard Group of companies.
Nygard, 79, is facing possible extradition to the U.S. on multiple charges of sex trafficking and racketeering.
He appeared by video from Headingley Correctional Centre, and was breathing heavily and sniffling when he was escorted into an interview room to start the hearing.
Scott Farlinger, a lawyer for the attorney general of Canada, told court the federal government is opposing Nygard’s release on bail "irrespective of the strength of the plan" put forth by his lawyers, arguing Nygard poses a serious flight risk and could reoffend while out of custody.
Defence lawyer Jay Prober, who participated by phone, said keeping his client in custody is "nothing short of a death sentence," given his frail health and COVID-19 concerns in jail.
Fenske said Nygard doesn’t have the resources to flee.
Coverage of Winnipeg business icon Peter NygardClick to Expand
Posted: 11:45 AM Mar. 10, 2020
A class-action lawsuit alleges Winnipeg fashion mogul Peter Nygard lured women, many under the age of 18, to his Bahamian estate so he could assault, rape and sodomize them — part of a decades-long sex-trafficking scheme his companies helped him achieve.
"Mr. Nygard does not have access to personal funds on a daily basis," said Fenske, who has offered to be a surety for Nygard and allow him to live in a house he owns on John Bruce Road.
Nygard was arrested at that address last month and taken into custody. Fenske said he lives a seven-minute drive away and would be available to check on him every day and keep tabs on him via security cameras and motion detectors linked to his cellphone.
"I will do whatever it is the bail conditions require me to do," Fenske said.
Fenske said he bought the million-dollar house with money Nygard put into a numbered company Fenske owns.
Fenske, who was a director of the Nygard Group, told court he continues to work on Nygard’s behalf, paying himself $2,000 a week through his numbered company.
Farlinger asked why would he would do that.
"Because I believe in Mr. Nygard’s innocence and because we were working towards a process to reacquire assets of the companies," Fenske said, describing his relationship with his boss as strictly business, but "mutually respectful."
Farlinger cross-examined Fenske at length about the various company avenues Nygard might use to access funds. In one instance, Farlinger pointed to financial records showing Nygard companies overpaid a U.S. utility bill by $60,000, just before the companies were placed in receivership, alleging it was a ploy to recover and squirrel away money that would otherwise be entitled to the receiver.
Fenske maintained the overpayment was nothing more than a mistake.
He was also questioned about dozens of company vehicles that were transferred to employees, including Fenske and his son, just prior to the receivership.
Fenske testified the vehicles were transferred in lieu of bonuses, which the company could not afford.
The U.S. Attorney’s office for the United States District Court filed a nine-count indictment against Nygard last month, alleging sex-trafficking and racketeering offences spanning decades. The unsealed indictment alleges from 1995 to 2020, Nygard — alongside his business associates and co-conspirators — engaged in a "pattern of criminal conduct involving at least dozens of victims in the United States, the Bahamas, and Canada, among other locations."
Nygard is accused of raping and trafficking women and young girls, and keeping them quiet through "threats, false promises of modelling opportunities" and other coercive means."
Fenske said he "wholeheartedly disagree(d)" with an allegation by U.S. authorities he "facilitated" payments to Nygard "girlfriends" to maintain their silence. Fenske said Nygard was "very generous" with employees who needed help with medical or dental issues, and it was his job to make sure money was going to the right person.
"It was not my intention to subvert the intention of the subpoena." – Greg Fenske
"I was there as part of the payment-approval process," he said.
A subpoena connected to a U.S. class-action lawsuit filed against Nygard last year ordered that no company emails or documents be deleted or destroyed. But Fenske admitted to subsequently deleting an unspecified number of documents, claiming he didn’t believe they were "relevant."
"It was not my intention to subvert the intention of the subpoena," he said.
Steve Mager, a former Nygard employee, has also offered to be a surety for Nygard, but came under scrutiny Tuesday for his criminal past and ties to organized crime.
Mager, 43, was among 34 Hells Angels associates and gang members arrested in 2009 in what was described as one of the biggest drug and gang busts in Manitoba history. Mager later admitted to his involvement in a four-ounce cocaine deal and was sentenced to 5 1/2 years in prison.
Mager, a married father of two, told court he has since turned his back on crime. "I had a kid and figured it wasn’t the way to go."
Mager said he met Nygard while playing poker and in 2017 was offered a job working construction for him.
"He was talking about his Inkster (Boulevard) location needing help, so I helped him there and started a relationship with him," he said. "He looked past my criminal record and still hired me."
Mager was later made director of construction, he said.
At the time he lost his job last April, Mager was making $130,000 a year.
In an affidavit, Mager said he has equity of $300,000 in two homes, one a rental property and the other a family home he and his wife own.
Mager said he considers Nygard a friend and talked or visited with him almost every day before he was taken into custody.
In his affidavit, Mager said he was concerned for Nygard’s health in custody.
Asked Tuesday what he thought of Nygard’s appearance, Mager looked up at the large video screen and said: "He looks like crap," prompting a grin from Nygard.
The hearing resumes Wednesday.
Someone once said a journalist is just a reporter in a good suit. Dean Pritchard doesn’t own a good suit. But he knows a good lawsuit.