Peter Smiley, the lawyer for the plaintiffs, Dominant Enterprise Holding Inc., one of a dozen alleged fraud victims of Arash Missaghi and his associates, speaks to media outside of the courthouse in Toronto, on June 25.Cole Burston/The Globe and Mail
In the 18 years prior to Arash Missaghi’s shooting death last month, Crown attorneys deployed courtroom manoeuvres that weakened three major criminal cases against the accused serial fraudster, court proceedings and interviews with those involved in the cases show.
Decisions by the Crown to withdraw two big cases against Mr. Missaghi, and to exclude potentially contentious evidence in a third case in which Mr. Missaghi was acquitted, meant the 54-year-old accused in civil and criminal courts of defrauding millions of dollars from dozens of people was never held to account.
On June 17, Mr. Missaghi was killed along with associate Samira Yousefi in their North Toronto office.
Prosecutors in the failed criminal cases did not consent to interviews when contacted by The Globe and Mail. But an expert in Canada’s criminal justice system said prosecutors may lack persistence when it comes to complex fraud cases.
“Crowns don’t want to take risks. They want to win. If they don’t win it looks bad on them,” said Christian Leuprecht, director of the Institute of Intergovernmental Relations in the School of Policy Studies at Queen’s University. He added that major fraud cases routinely fall apart in Canada’s criminal courts because these cases are complex and time-consuming for police and prosecutors, often inviting myriad pretrial challenges where defence lawyers fight to exclude evidence.
The first known large-scale criminal probe to falter against Mr. Missaghi was a bust the police had called Project Tic Toc. The 2006 joint investigation involved extensive surveillance of Mr. Missaghi and at least 20 others, who were arrested for allegedly running an elaborate cargo theft ring in Ontario that stole transport trucks and sold the goods internationally.
When the charges went to trial, prosecutors elected not to enter extensive wiretap evidence against Mr. Missaghi, according to a retired officer familiar with the case. The officer said the wiretaps would have undermined several witnesses testifying in Mr. Missaghi’s favour, but the Crown expressed concern about facing Garofoli applications, motions brought by the defence to exclude police evidence that may have been obtained unlawfully. The Globe and Mail is not naming the officer as he was not authorized to speak publicly about the case.
Mr. Missaghi was acquitted of fraud, conspiracy to commit an indictable offence and two other charges, according to the Ontario Ministry of the Attorney General. The Crown assigned to the case did not respond to an interview request.
Years later, Ontario Provincial Police detectives alleged Mr. Missaghi and his associates operated a criminal organization that existed to perpetrate frauds in a Northern Ontario community.
In 2015, the OPP laid charges alleging people and entities were bilked of $6-million. But in 2017, prosecutors brokered a plea deal. They agreed to drop all charges against Mr. Missaghi and his co-accused in return for fraud findings made against one of his corporations.
Court audio proceedings of the final pretrial hearing indicate Mr. Missaghi’s lawyers presented the court with a cheque for $32,500 in compensatory damages for victims and that the defence said some lawsuits arising from the same frauds had been settled.
A prosecutor noted a judge’s pretrial ruling suggesting the frauds did not belong in criminal courts, but rather that they were civil court matters.
The next year, in 2018, Toronto Police charged Mr. Missaghi and three others with being behind $17-million worth of frauds. Project Bridle Path, as the investigation was known, was a five-year probe of transactions involving large houses in Toronto’s wealthy Bridle Path area, as well as other properties located in similar neighbourhoods. The scheme, police said, dated back to before 2013 and involved enticing private lenders to hand out money for mortgages for people or companies that were posing to be the owners of expensive homes. The mortgages were never registered and police alleged false documents were used to seal the fake deals.
But in July, 2021, on the eve of a scheduled trial, the Crown withdrew its case and the four were free to go.
Court audio obtained by The Globe show prosecutors were vague about the reasons.
“It is apparent that it is no longer in the public interest to proceed with these charges,” Crown Attorney Mitchell Flagg said during the hearing. Among the reasons for scuttling the case, he said, was because of “certain potential outstanding disclosure issues, which were brought to the attention of the Crown and the police many months after the charges were laid – and which crystalized recently.”
Mr. Flagg declined to elaborate when contacted in June by The Globe. Serge Hamel, the prosecutor in Northern Ontario, also declined to comment.
The decision to withdraw the Bridle Path case frustrated lawyer Doug Bourassa, who represented victims in that alleged fraud scheme, especially since he said a lawyer implicated in the frauds who was later disbarred was prepared to testify.
“It was a lamentable and disappointing decision that ensured that Missaghi would be free to perpetuate his frauds,” Mr. Bourassa said in an interview. He said his clients remain “incredibly disappointed.”
At times, Mr. Missaghi boasted of being a master manipulator who could not be contained by lawyers, police or prosecutors. Records obtained by The Globe show he had been unsuccessfully sued many times and that he may have been wealthier than anyone realized.
“Mr. Missaghi just advised me ... his over 70 companies manage over $700-million in investment funds,” criminal lawyer David Bennett said during a 2015 bail hearing for the accused fraudster in the Northern Ontario case.
Shortly after Project Bridle Path ran its course, Mr. Missaghi and his associates entered into a mortgage deal with a man named Alan Kats.
Mr. Kats’s body was found by police in the same office where Mr. Missaghi and Ms. Yousefi were found dead. He left behind a suicide note. His widow, Alisa Pogorelovsky, has since alleged that their family was defrauded of more than $1-million.