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David and Natasha Sharpe, of Bridging Finance Inc. are photographed in the company's downtown Toronto offices on Apr. 11, 2019. Bridging was placed in receivership in late April of this year and the Sharpes were removed from the company shortly after.Fred Lum/The Globe and Mail

As the Ontario Securities Commission began to probe Bridging Finance Inc., a family trust created by the private lender’s top executives allegedly moved misappropriated money offshore, court records show.

Court and public filings also show that a Bridging borrower, Adrian Montgomery, served as the trust’s director from its creation in April, 2018, until December, 2020. Around the time he stepped down, money was transferred from the family trust to a law firm’s trust account, and that money was subsequently allegedly funnelled to an asset manager in Liechtenstein, which is a known tax haven.

There is no evidence that Mr. Montgomery was aware of the full extent of the trust’s business dealings, and he declined to comment for this story. However, his involvement in the trust adds to the complex web of transactions between David and Natasha Sharpe, who ran Bridging as a married duo, and those who borrowed millions of dollars from Bridging.

Bridging Finance failed to account for bad loans, potentially boosting its management fees: Receiver

Bridging was placed in receivership in late April of this year and the Sharpes were removed from the company shortly after. Bridging, which specializes in private debt and manages investment funds with roughly $2-billion in assets, is now under the control of PricewaterhouseCoopers LLP. The OSC is investigating the lender and has alleged it had conflicts of interest with a number of borrowers.

In one instance, Bridging lent more than $200-million to companies controlled by Winnipeg businessman Sean McCoshen. The OSC has alleged that a company controlled by Mr. McCoshen transferred a total of $19.5-million into David Sharpe’s chequing account between 2016 and 2019. PwC is tracing what became of that $19.5-million, which is how auditors learned that a portion of those funds flowed to the family trust, and subsequently, to Liechtenstein.

In January, 2017, a company Mr. Montgomery ran called Quantum Murray, or QM, borrowed $5-million from Bridging, The loan has since been repaid. Mr. Montgomery was also an officer of Aquilini GameCo Inc. alongside businessman Francesco Aquilini, who owns the Vancouver Canucks, when it borrowed $20-million from Bridging in August, 2019.

Aquilini GameCo has since merged with another company to form Enthusiast Gaming, where Mr. Montgomery is chief executive. Enthusiast’s loan from Bridging remains outstanding and was recently increased to $24-million, but is considered one of Bridging’s better-performing loans.

Mr. Montgomery has also served as chair and interim CEO of cannabis company MJardin, which is one of Bridging’s largest and most troubled loans. MJardin ran into financial difficulty before Mr. Montgomery joined the board.

In April, 2018, the Sharpes created a family trust known as the 182 Crescent Road Trust and named Mr. Montgomery as director. Trusts are often used by high-net-worth individuals for tax and estate planning purposes, and are usually overseen by professionals, such as a lawyer. When someone places their assets into a trust, those assets are, in theory, no longer under their control, but rather, the responsibility of the trustee. Although not a practising lawyer, Mr. Montgomery is a registered member of the New York State bar.

The trust is named after the address of the Sharpes’ family home in Toronto’s Rosedale neighbourhood, and the property was transferred into the trust two weeks after it was created, public filings show.

New court documents allege that the trust also held a bank account, and at least $4-million of the $19.5-million that Mr. McCoshen deposited into Mr. Sharpe’s chequing account was transferred into this bank account. “Certain funds” were subsequently transferred from the trust’s bank account to First Trust Management, located in Liechtenstein, according to the receiver. PwC is attempting to recover those funds.

The OSC started probing Bridging’s affairs last year and in May, 2020, the regulator asked the lender to provide a list of all loans made since 2017, court filings show. The OSC also asked Bridging to indicate whether a borrower or its directors, officers and/or shareholders “was ever a related party of BFI [Bridging] and, if so, the dates when this relationship existed.”

In response, Bridging submitted a table that included a column addressing whether loans were made to a related party. For both loans taken out by Mr. Montgomery’s companies, Bridging wrote ‘No.’ The OSC is still investigating Bridging and has not made any formal allegations against the company or the Sharpes.

The family trust for which Mr. Montgomery was the director has come to light because PwC recently learned the Sharpes’ home was being privately marketed for sale. On Friday, PwC said the home has been sold, but the receiver entered into an agreement with lawyers for the Sharpes that stipulates proceeds will be held in a law firm trust account.

David and Natasha Sharpe did not respond to requests for comment for this story. Canaccord Genuity Corp., which brokered the 2019 loan between Bridging and Aquilini GameCo., declined to comment. Canaccord Genuity has also served as Enthusiast Gaming’s lead financial adviser, and has been a financial adviser to MJardin, the cannabis company where Mr. Montgomery was board chair and interim CEO.

Through a spokesperson, Francesco Aquilini told The Globe he had no knowledge of the numbered company that controlled the Sharpe family home and declined further comment. A Bank of Montreal financial adviser who allegedly managed the Sharpes’ family trust did not respond to a request for comment.

Editor’s note: Clarification: This story has been updated with additional comment from a spokesperson for Francesco Aquilini. An earlier version of the story said Mr. Aquilini had declined to comment.