Following a trial that lasted 13 days, Diane Brazeau, the ex-wife of the mafia lender Roger valiquette shot dead in 2013, must reimburse $ 4 million to a retired Montreal lawyer.
Former family law lawyer Norman S. Kessner, 75, had invested all his savings in 2010 in what turned out to be a Ponzi scheme orchestrated by Roger Valiquette and Diane Brazeau.
Valiquette found investors for his company Express Finance Investissement inc. (EFI), which his wife Diane Brazeau managed. Investors were getting monthly dividends from investments from new investors.
The couple enjoyed a princely lifestyle by owning properties in Mexico, Florida, Paton Island, Laval, as well as a yacht. In 2012, Diane Brazeau further reported income of $ 626,468, and Roger Valiquette of $ 742,766.
The search for new investors for EFI ended with the assassination of Valiquette on December 18, 2013. Newspapers link him to organized crime.
But even before, as of December 31, 2021, EFI was in deficit.
“How can we pay creditors when there is no interest income? »Raises the lawyer of Mr. Kessler, Me Meryem Abouamal, from AMA Legal Solutions. The only possibility to pay is with the capital of other people or with your own money! “
The challenge of lifting the corporate veil
Former lawyer Norman S. Kessner has lost all his money. He sued EFI in 2015 under his company name to regain his investment, but EFI was sheltered from the bankruptcy law. EFI admits the debt of $ 2,800,000 as a result of Kessner’s loan, but cannot repay it.
“We had an admission of the amount claimed of 2.8 million plus additional interest, which brings the claim to approximately $ 4 million. Our goal was to seek responsibility for all the companies that make up the Express Finance group, ”explains Mr. Kessler’s lawyer, Me Meryem Abouamal.
Indeed, Diane Brazeau is the director of no less than 14 sister companies of EFI founded between 1988 and 2012, within which investor money circulated. If EFI is insolvent, these other companies are not, and could be held jointly and severally for reimbursement.
“Solidarity allows my client (Editor’s note: Norman S. Kessner’s company) to collect the amount of the judgment from any company that has been sued. The difficulty of the file was at the level of lifting the corporate veil and thus demonstrating the solidarity between sister companies which represent a complex corporate structure, ”explains Me Abouamal.
After hearing 20 witnesses, the Court came to the conclusion that “all these legal persons are used as alter ego of the Valiquette-Brazeau couple”.
Against all expectations, it was a defense witness who came to confirm that all these companies were one and the same group.
The couple’s chartered accountant, Johnny colonna, mentions in his testimony “loans made between companies linked by a common control, in this case Valiquette and Brazeau”. He confirms that all the companies were related.
“It’s really a rather strange coincidence: it was not even our witness! Exclaims Norman S. Kessner’s lawyer.
Other witnesses working for the couple add that all the companies are based at the same address in Laval, share the same employees, the same telephone number, the same stationery, the same fax machine.
“Of course we came to say that it was a fraud, which was determined by (the judge Aline UK Quach) by lifting the corporate veil ”, underlines Me Abouamal.
“In the case under consideration, the Court is of the opinion that the significant transfers of funds which were underway between the company EFI and its other sister companies constitute fraud and militates in favor of the lifting of the veil, in cascade , of all the companies which took part in it ”, one can read in the judgment.
Diane Brazeau defended herself by maintaining that she no longer took part in the management of these companies and that she had separated from Roger Valiquette in 2012, but the Court doubted her credibility.
On January 7, Justice Quach condemned the companies administered by Diane Brazeau jointly and severally to pay with interest the amount owed to former lawyer Norman S. Kessner.
The widow of Valiquette will only have crumbs.
A refund still uncertain
The appeal period will expire soon. But even if Diane Brazeau does not appeal, Me Abouamal doubts that her client will receive all of what is due to him.
Mr. Kessner’s business seized before judgment several real estate assets, including condos and land, a convertible Mercedes car, and share certificates for Ms. Brazeau’s businesses. As soon as the appeal period has passed, Mr. Kessner will be able to proceed with the liquidation in the hope that the sale of these assets will total $ 4 million.
“Me, I’m pretty sure that the things we have seized will not pay the debt, sighs his lawyer. If Madame goes to appeal, other interests will be added, and that also depends on the market value of those lands. But we will hope that we will collect (all)! “
Diane Brazeau’s lawyer, Me Gianluca Campofredano, confirmed to Droit-inc that his client would appeal the judgment. He declined to comment further.