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A former supervisor at a subsidiary of Enbridge Inc. allegedly diverted at least $6.3-million from the company through an elaborate scheme that involved creating four phony suppliers, according to documents filed in a Toronto court.

Toronto-based Enbridge alleges the scheme went on for six years and involved five other non-employees who laundered some of the cash through a series of numbered companies. The group allegedly used some of the money to purchase interests in 17 properties across Ontario, according to the filed documents.

Enbridge is suing the group for $10-million in damages and has asked for a court order to seize the properties. It has also referred the case to the Toronto police.

"This has been the focus of a long-term internal investigation," said Debbie Boukydis, an Enbridge spokeswoman. She declined further comment.

No allegations have been proved in court.

"The allegations at this point are unproven and they are clearly quite serious," said Symon Zucker, a lawyer representing the former supervisor, Michael Marinaccio. "We hope however to resolve them very, very quickly without much fanfare. The partiers are all co-operating with one another to find an expeditious and a reasonable resolution."

The lawsuit centres around Mr. Marinaccio, who has worked at Enbridge Gas Distribution since 1981. Enbridge Gas distributes natural gas to nearly 2 million residential and business customers across Ontario.

In January, 2001, Mr. Marinaccio became an operations supervisor, which allowed him to pay invoices from suppliers for amounts up to $5,000, excluding taxes, according to court filings. A year later, Mr. Marinaccio allegedly arranged to have four companies, Tarrco Construction, Tek-Con, Tekka-Ent and Provac, approved as qualified suppliers to Enbridge for inspection services, vacuum cleaning services and other parts and goods.

"In fact, the fraudulent vendor entities were shell entities that carried on no legitimate business whatsoever, and whose only source of income was the fraudulent invoices rendered to [Enbridge]from time to time over the six-year period between 2002-2008," court filings allege.

Enbridge alleges the four suppliers were controlled by Mr. Marinaccio and two business associates, Angelo Piro and Tony Montaldi. A lawyer for Mr. Piro called the allegations "unproven." Mr. Montaldi's lawyer was unavailable.

During the six-year period, Mr. Marinaccio allegedly used his position to approve the payment of invoices from the companies. He also forged accounting records to conceal the scheme, the documents allege.

Once the invoices were paid, the money was allegedly dispersed to the men and their wives. Some of the cash went to pay for stakes in properties located around Toronto and in Wasaga Beach, Meaford and Blue Mountain, Ont., according to allegations.

Enbridge launched an internal investigation earlier this year and appeared to keep it quiet so as not to alert Mr. Marinaccio.

The company won a rare court order in March, compelling the Toronto-Dominion Bank to turn over account records relating to Provac. When The Globe and Mail asked about the court order at the time, lawyers representing Enbridge had the file sealed by a judge to protect the investigation.

Enbridge filed its lawsuit on May 26 and dismissed Mr. Marinaccio around the same time.

A judge unsealed Enbridge's statement of claim last week but kept a seal on other parts of the court file.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
ENB-N
Enbridge Inc
+0.53%36.18
ENB-T
Enbridge Inc
+0.29%48.95

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