Four people have been charged in a $48 million fraud scheme.
The Waterloo Regional Police Service (WRPS) said the accused were executives at Waterloo, Ont.-based company Trigger Wholesale Inc., a firearms distributor that claimed to supply large Canadian retailers, government agencies and law enforcement services.
WRPS have not named the people charged, but have identified them as a 52-year-old man and a 48-year-old woman who used to live in Waterloo, but now live in London, Ont.
A 56-year-old man from South Frontenac and a 64-year-old man from Guelph were also charged.
During a media conference on Tuesday, WRPS Det.-Const. Mike Payne told reporters the accused include Trigger Wholesale’s president, an owner, the chief financial officer and the chief operating officer.
They are facing charges of fraud over $5,000, forgery, uttering forged documents, falsification of business documents, possession of property obtained by crime, laundering proceeds of crime and identity fraud.
‘More than 19,000 fraudulent invoices’
Investigators claim the executives fabricated deals and sales to secure funding from their lender, Clearflow Commercial Finance Corp.
“Investigators determined that the suspect company submitted more than 19,000 fraudulent invoices for goods allegedly sold to major retailers,” Payne said.
Police believe the money from the lender was then used for personal luxury purchases, including property.
The alleged fraudulent activity happened between 2016 and 2020.
Police said, in addition to the fake invoices, the company also had fake shipping and delivery records, altered firearms inspection reports, fake email domains and voice technology that was used to impersonate employees of legitimate companies.
Payne said the money was used in a Ponzi-style scheme, where the money was cycled back to Clearflow to simulate legitimate payments.
The police investigation did not begin until about four years after the allegations first surfaced in 2020. He said Clearflow wanted to exhaust all civil options before moving forward with a criminal investigation.
A formal complaint was filed in 2023, but due to the fraud unit’s work load, the case wasn’t assigned until 2024.
Clearflow’s fate
Trigger Wholesale was placed into receivership in 2020. Extensive civil court documents outline allegations of fraud involving Mark Gdak and Jaimee Lynn Gdak, the directors and officers of Trigger Wholesale.
The documents include invoices that appear to be from large Canadian companies but contain spelling errors and other irregularities.
A number of assets were seized and liquidated during the bankruptcy proceedings and some money was recovered. Those assets included luxury cottages, a yacht, Sea-Doos, vehicles such as Land Rovers and high-end pickup trucks, and renovated homes. Payne said the properties were all in Ontario.
Meanwhile, Clearflow is no longer operating.
Sandy Kanichis, the company’s director of operations, told CTV News the situation had a “significant impact” on the business.
Kanichis said she and her business partners are relieved to hear the charges were laid and they hope justice will be served.
“They took advantage of our business relationship for their personal and business gains,” she said.
Investigators believe Clearflow was the only company targeted in this case.
The four accused are scheduled to appear in court in August.
