Brock’s concerns arise in part from information indicating that some of the money Cinar was seeking was in the funds that the founding couple had sent to the Bahamas to be invested. While most of that money was returned to Cinar, as much as $30 million (U.S.) was never recovered and the company’s new owners said the couple had made off with some or all of it.
Barrington Bank and Lochaven are small, obscure and secretive institutions. Both are run by Canadians. Little is known about Nassau-based Barrington, which now calls itself Heath Bank & Trust Ltd. Lochaven is run by a lawyer who is also CEO of Hallmark Trust Ltd., a trust company in the Turks and Caicos. According to a U.S. indictment, Hallmark was the bank from which a $220-million (U.S.) Ponzi scheme was run in the late 2000s. In a civil lawsuit filed in 2007, the U.S. Internal Revenue Service alleged that two American accounting firms advised clients to evade taxes by moving money out of the country using credit cards issued by Hallmark.
Acting on Voorheis and Brock’s work, Cinar won a court injunction in the summer of 2005 that froze all of Weinberg’s assets and bank accounts, including those offshore and any of his money in Groia’s trust account. Now Weinberg would have to go before a judge and ask to access his own money for living and legal expenses.
Eleven days after the injunction was granted, $500,000 from the Barrington Bank in the Bahamas was transferred to Groia’s trust account, which was almost empty at the time, for Weinberg’s use. Two days later, another $66,937 was transferred from a Montreal-based financial management company, Palos Capital Corp., to Groia’s account for the same purpose. The transactions are reported in a 2011 Quebec Superior Court judgment, which also noted that neither transfer was authorized by a judge.
A few weeks later, Weinberg filed a request in the Quebec courts to free up $1 million of his assets to cover his personal and legal expenses, according to the judgment, which notes that, at the time, Weinberg owed his lawyers (Groia presumably among them) and accountants $271,404. This request was withdrawn, according to the judgment, after Cinar’s lawyers said they planned to cross-examine Weinberg about the whereabouts of all of his assets.
Where had the money flowing into Groia’s trust account originated? Groia says that after Weinberg was cut off from his money and couldn’t pay his lawyers, he advised him to find a third party to cover his legal expenses—someone not covered by the injunction (which is legally permitted). “It’s very common while you are trying to sort out what’s going to happen for family members or friends to help out,” says Groia.
In this case, the third party would be Weinberg’s two twentysomething sons, Alex and Eric. The Superior Court judgment reports that Groia received a letter of opinion from one of Weinberg’s Montreal lawyers, Pierre Fournier (whom Weinberg owed $232,948 in fees), which was the basis for Groia releasing funds to pay Weinberg’s legal bills. Weinberg authorized that $359,583 be drawn out of Groia’s account, of which $168,995 went to Fournier. A few months later, Fournier also received $173,176 from Weinberg’s account at Hallmark Trust in the Turks and Caicos. All of this cash, asserted Weinberg, was lent to him by his sons. Groia concurs.
Voorheis and Brock were incensed, feeling that Weinberg was getting around the injunction and Groia was helping him do it. In fact, court documents say that Weinberg transferred $1 million to each of his sons through accounts in their names at the Barrington Bank in the spring of 2005. “If I am being sued or I owe a large amount of money, I cannot make myself insolvent by transferring all of my money to my children,” Brock declares. “That would be a violation of the creditors’ rights. If I transfer all my money to my kids without consideration and then my kids loan the money back to me, that’s a sham.”Report Typo/Error
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