Former Mount Real Corp. CEO Matteo ordered to report to prison
Lino Matteo is creating his very own definition of revolving door justice.
The former CEO of Mount Real Corp. was ordered Thursday to turn himself in within 24 hours to the Cowansville Institution, a medium-security federal penitentiary in the Eastern Townships. He is to resume serving the five-year prison term he received last November following his conviction in a case where he was found to have violated 270 counts of Quebec’s Securities Act.
If he does show up at the penitentiary on Friday as ordered, it will be the third time in two years as he continues to appeal his convictions in two major fraud cases.
A few weeks after he was sentenced last year, a judge agreed to a request that Matteo be freed while he appealed the case brought against him by the Autorité des marchés financiers (AMF), the provincial securities regulator. Matteo was found to have run what amounted to a Ponzi scheme through his firm as he bilked investors out of more than $130 million. Some of the 1,600 victims lost their life savings.
Matteo’s appeal did not challenge the evidence brought against him, but was based on a technicality. On Thursday afternoon, Superior Court Justice François Dadour dismissed the appeal and a lawyer from the AMF asked that Matteo be taken into custody immediately. She noted that the judge who agreed to allow Matteo to be released on conditions in December included a requirement that he be present in court when the decision on the appeal was delivered. The AMF lawyer argued the only conclusion to be drawn from that condition was that Matteo should be taken into custody right away if he lost the appeal.
Matteo’s lawyer, George Calaritis, countered that Matteo has respected all the conditions he has been ordered to follow since 2010, when he was charged in a criminal case involving investor fraud at Cinar Corp., and that if he failed to report to the penitentiary his family would risk a considerable financial loss through a bond his wife agreed to with the Court.
“He has always respected his conditions,” Calaritis said. “He wants to be able to say goodbye to his parents. They are of a certain age. They are over 80.”
Dadour agreed with Calaritis’s request after noting the AMF lawyers in the case offered no evidence that Matteo should have been taken into custody immediately.
The expression “revolving door” is used by criminologists to describe an offender’s recidivism. In 1988, it became a common expression in North America after it was used in an ad during the U.S. presidential campaign by the Republicans to help George H.W. Bush defeat Michael Dukakis.
In December 2016, Matteo was allowed to walk out of a federal penitentiary for the first time after a judge agreed he should be released while he appealed his conviction in the Cinar case. Matteo was sentenced to an eight-year prison term, during the summer of 2016, after he was convicted of fraud and forgery. In that case, investors were defrauded out of more than $120 million. The Quebec Court of Appeal is scheduled to hear the appeal next year.
Janet Watson, an investor who lost $68,000 by investing in Mount Real Corp., was present on Thursday when Dadour delivered his decision.
“I’m going to keep this up,” she said. “You have to see this through to the end.”