The Proverbial Fox in Charge of the Henhouse

"A reasonable person would not consider this to be a legitimate way to conduct business. He [the defendant, Gabriel Fung] chose to remain deliberately ignorant as to the source of those products."
"As the saying goes, if something is too good to be true, it probably is."
Judge Michael Emery, Toronto

"I'm lost for words."
"It's been quite an ordeal for me already, so I just don't want to make things worse."
"It's a life-changing thing."
Gabriel Fung, electronics store proprietor

The quantity of Minetto’s iPads and iPhones grew larger as Fung’s rolls of cash, bundled with elastic bands, became thicker. Over the next two and a half years, Fung purchased 5,321 iPads and 4,942 iPhones from Minetto.

As the accounting manager for Wescom Solutions Inc., located in Mississauga, Ontario, the software company depended in its employee, Nadia Minetto, whose job it was to approve payments on all of the company's American Express credit cards issued to its employees for business expenses, to simply do the work that was outlined in her job description. A year into her work with the company Ms. Minetto identified a bold plan of action to take advantage of the fact that not only was she to 'approve' and validate all other employees' expenses on the company's Amex cards, but her own.

Over a period of five years Wescom lost $6,832,834 because no one at the company thought there might be any reason to oversee the work that Ms. Minetto did on behalf of the company in accordance with her assigned tasks. That's the amount that she swindled Wescom out of. She misappropriated those funds on her personal buying spree of Apple products, iphones and tablets. Why would any one person need to have thousands of these products? Why, to sell them.

And Ms. Minetto linked into a serendipitous source of cash for iphones when she advertised the first of the thousands she had bought, for sale through a Kijiji advertisement, and Gabriel Fung responded. They met at a downtown Toronto shopping mall and the transaction took place, leaving two very satisfied people; Ms. Minetto with cash and Mr. Fung with an electronic device that he could sell for more than he paid at his very own electronics shop.

From that first sale and two mutually satisfied people, the transactions grew exponentially, with Ms. Minetto offering multiple and then growing numbers of devices at one fell swoop on a regular basis, and Mr. Fung prepared to scoop them all up, handing over thousands of dollars at a time. His little shop couldn't handle all the devices he bought, and his business expanded to selling the items to companies in Hong Kong or to eager wholesalers. His side business was thriving. Their collaboration made them both temporarily wealthy.

Until Wescom brought in a consultant to help guide them toward the goal of becoming publicly traded. The consultant, Kristine Pacy, came across spending irregularities in 2014, three years after the first meeting took place between Ms. Minetto and Mr. Fung. Ms. Pacy traced the records years back and found rampant spending by Minetto from 2009 forward; goods and services for personal use charged to the Amex card issued to Ms. Minetto and which she herself approved.

Of the 600 people employed by the company, 180 corporate credit cards had been issued. And the very employee whose position it was to oversee approval of expenses on all those cards was the one who embezzled $6 million of the company's capital in expenses. And no one noticed. Until Ms. Pacy came along. The company, for reasons known only to itself, struck a settlement permitting Ms. Minetto to pay back 'what she could'.

She was allowed to keep her house to "rebuild life for herself", but had to turn her Mercedes and Audi vehicles in, while allowed ownership of a $30,000 replacement car. "I don't know. I honestly don't know", she responded to company lawyers when they asked where all that money had gone. What she failed to reveal to them was a $10-thousand cash gift to a friend, seasons tickets for the Toronto Raptors worth $6-thousand, a car she sold to a colleague and a Los Vegas trip with friends.

In 2014, a judge gave the company authority to seize her house when the breaches became known. Had she been truthful she would still be in possession of her house, but why expect 'truth' from someone who saw nothing amiss in appropriating $6-million from a trusting employer? By 2017 the company had expanded its efforts for restoration and went to court to have Mr. Fung return money from the iPhone and iPad sales.

Ms. Minetto had received about $5.2-million in cash throughout the time of her transactions with Mr. Fung. However, Mr. Fung pleaded ignorance of Ms. Minetto's malfeasance; he had once asked her if the goods she was selling were stolen and he was assured by her that they were of legal provenance. That was all he wanted to hear, and their mutual business continued to flourish -- until it was so unfortunately disrupted.

Mr. Fung appealed the judgement pronounced by Judge Michael Emery who awarded Wescom over  $5-million against Fung and a business partner, and in turn awarded Fung his cross-claim for a like amount against Ms. Minetto. After appealing the judgement, the Court of Appeal for Ontario issued its decision, finding that while Judge Emery had erred in law in articulating the concept of wilful blindness, his judgement would remain unchanged.