Lawyer accused of fraud says bad cheque didn't hurt the bank
The fraud trial for a suspended Ontario lawyer ping-ponged back and forth on whether TD Bank had suffered any harm or risk of loss as a result of a bad cheque the lawyer wrote.
Nicholas Cartel is self-representing on charge he wrote bad cheque to cover his firm's financial collapse
Zach Dubinsky · CBC News
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The fraud trial for a suspended Ontario lawyer ping-ponged back and forth Tuesday on whether TD Bank had suffered any harm or risk of loss as a result of a bad cheque the lawyer wrote.
Nicholas Cartel, a class-action and litigation specialist, is on trial on a single count of fraud over $5,000 relating to a $300,000 personal cheque he wrote in 2023, which prosecutors allege was done to help cover up the financial collapse of his and his wife’s law firm. That cheque bounced five days after being deposited into a TD bank account belonging to the law firm.
In the second day of testimony in provincial court in Toronto, a witness representing TD was grilled by both the defence and prosecution about what harm, if any, the bank incurred as a result. Proving fraud under the Criminal Code requires proving that someone either suffered a loss or was exposed to a risk of economic deprivation.
“There was no negative balance at the end of the day?” Cartel asked TD employee Tonya Cole in cross-examination.
“That’s correct, yes,” Cole replied.
Prosecutors Megan Rauser, left, and Dihim Emami converse outside court at the end of the first day of Cartel's criminal trial. (Aloysius Wong/CBC)
Cartel has not denied he wrote the bad cheque for $300,000 on a personal account at RBC — which he maintains was a joint account with his wife, Singa Bui. But he says his wife, not he, deposited the cheque to the TD trust account of their firm, Cartel & Bui LLP. And then she was the one, he says, who immediately after obtained a $2.2-million certified cheque from TD to send to a client of the firm.
Prosecutors allege the certified cheque couldn’t have been issued without the top-up from the $300,000 deposit, because the law firm’s trust account was already in shortfall. Bui had been embezzling money from it for years, according to her own evidence in a separate civil case.
When Cartel’s personal cheque from RBC bounced five days later, TD had to go into his firm’s trust account and take out the $300,000.
Prosecutor Dihim Emami focused on that in his re-examination of Cole.
“It's fortuitous that this account had funds subsequent for TD to recover their $300,000, correct?” he asked. “If this account was depleted … or for a whole host of reasons other influxes of money didn't come in, TD might never have recovered that amount, correct?”
“That's possible, yes,” Cole said.
Home buyers and sellers left in lurch
The collapse of Cartel & Bui LLP in December 2023 left more than 25 home buyers and sellers in southern Ontario in the lurch for amounts ranging from $66,000 up to $2.16 million, in the case of one couple — money they had either transferred to the firm's trust account to buy a home or were expecting in payouts after selling their home.
Bui has admitted in lawsuits against her and Cartel that she started pilfering money from the firm’s trust account as far back as 2014 to fund the couple’s "luxury lifestyle," in a Ponzi-like scheme where incoming funds from new clients would cover for amounts she had stolen. She and Cartel bought two Toronto homes for $6 million total, sent their children to private school, took "luxurious vacations" and, she said, “decorated our home and office with elegant furnishings and expensive art.”
Cartel has long maintained he didn’t know about the embezzlement until December 2023, but a Superior Court judge overseeing more than 15 lawsuits against the couple and their former law firm has questioned those claims, saying at one point in June 2024: “Did she pay for nice gifts for you? Did you buy a car that she paid for? Did she pay mortgage payments? How can you not know, when you're living with her and you've got a home together and you've got children together, where $6 million went?"
The judge later sent both Cartel and Bui to jail, for 30 days and 20 days respectively, for contempt, ruling that they "have taken active steps to hide their finances and to frustrate the court."
Now-disbarred real estate lawyer Singa Bui leaves a Toronto courthouse in October 2024 after being sentenced to 30 days in provincial prison for civil contempt of court. The sentence was later reduced to 20 days. (Aloysius Wong/CBC)
A Law Society of Ontario ruling in April 2024 suspending Cartel from practising law commented that “while it is conceivable that Ms. Bui acted alone and that Mr. Cartel had no knowledge or involvement, there are good reasons to believe otherwise,” including that various of Cartel’s explanations were “difficult to accept.”
Bui has since been disbarred while the Law Society’s disciplinary case against Cartel has yet to come to a final hearing.
Bogus signatures
In his criminal trial, Cartel is representing himself after a falling-out with his former defence lawyer Richard Posner.
Court records from a separate case, where Cartel challenged Posner’s invoices, show Posner criticizing Cartel for being “arrogant and patronizing” toward staff at Posner’s firm. Posner also told Cartel he was “completely uncomfortable” with Cartel’s wish to interact mainly over email “given the tenor of your writing.” Cartel had made claims in emails to Posner's firm that, among other things, the prosecution in his case had drafted a fraudulent document to pressure Cartel into agreeing to certain facts ahead of trial.
Cartel, in turn, accused Posner of “deliberate willful blindness” to documents that would supposedly help exonerate him. He also said Posner’s assistant “forced condescending, unsolicited opinions of culpability onto” him.
In another email, Posner states that if Cartel is going to testify in his own defence, it will take “a few days” to coach him because “without extensive preparation, Mr. Cartel will not present well as a witness.”
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The dispute between them also reveals that Cartel put together documents that contained bogus signatures of another lawyer, George Tsimiklis. The signatures appear on the witness line of two affidavits Cartel swore in his dispute with Posner.
“Although the document bears my signature … I did not sign it either in person or electronically, and I did not authorize Mr. Cartel or any other person to affix or reproduce my signature on it,” Tsimiklis says in his own sworn statement filed in the case.
Cartel says the documents were only in draft form and he never intended them to be submitted to court.
Tsimiklis was a colleague of Cartel and has previously witnessed affidavits for him and represented Cartel’s wife, Bui.
Cartel told CBC during a break in his trial on Monday that he emailed the documents to a court clerk but only as drafts and he wasn’t formally filing them. He blamed the clerk for misunderstanding instructions and placing the affidavits with the bogus signatures into the court file.
Asked how the signatures got onto his affidavits in the first place, Cartel claimed it happened because different pages from different documents got compiled together by the court clerk, including some pages that had Tsimiklis’s genuine signature from past filings.
That explanation, however, doesn’t square with the fact that Tsimiklis’s bogus signatures don’t appear on their own page but rather at the bottom of the newly created affidavits.
Cartel is currently suing CBC, Toronto Life magazine and the Toronto Sun newspaper for their coverage of his and his wife’s ordeals.
His trial is scheduled to resume in November.
ABOUT THE AUTHOR
Zach Dubinsky is a CBC investigative journalist. His reporting on offshore tax havens (including the Paradise Papers and Panama Papers), political corruption and organized crime has won multiple national and international awards. Phone: 416-205-7553. Twitter: @DubinskyZach. Email zach.dubinsky@cbc.ca
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