Man guilty in $1M livestock brokerage fraud

Former manager bilked Moosomin company by forging cheques to himself

REGINA The former general manager of a livestock brokerage has been found guilty of defrauding the Moosomin business of approximately $1 million.

In a decision handed down at Yorkton Court of Queen’s Bench earlier this month, Justice Janet Mcmurtry noted Gregor Gmerek was fired in December 2012 — approximately four years after he started as GM and comptroller — by the majority owner of three companies that own Prairie Livestock, a brokerage that deals primarily with feed cattle. Court heard Gmerek was fired after the owner found $763,000 in allegedly unauthorized payments to Gmerek.

A company accountant and a former GM came on board to help the owner pore through company records — the result of which was an assertion that Gmerek defrauded the business of more than $1,253,400.

At trial, Crown prosecutor Dana Brule alleged Gmerek created false invoices, forged the owner’s name on unauthorized cheques and created false accounts to back up each cheque. Gmerek claimed the owner authorized the payments in question, and that he provided “off-record” payments to employees, including Gmerek, who acknowledged receiving $965,531 in off-record income.

But the judge believed the owner, who denied the existence of an agreement to provide off-record income to Gmerek.

“I accept that Mr. Gmerek defrauded the company of approximately one million dollars...,” Mcmurtry said in a 24-page written decision, adding the man also committed theft.

“To commit theft and fraud, Mr. Gmerek forged the signatures of Mr. Sinclair and others on company cheques. He then used these forged cheques to pay himself company money to which he was not entitled.”

She said she was satisfied the Crown had proven charges of fraud, theft, forgery and uttering forged documents.

Records showed one method Gmerek used to receive off-record income saw him deposit a cheque for a sizable amount in his account, with the same cheque number and amount appearing in a ledger as an account payable to him. The ledger would then show the account payable to him was voided, but then reinstated as an account payable to the company and paid by a cheque with the same number.

“In the end, bank records show that Mr. Gmerek cashed the cheque ... while the company records indicate that the cheque to him was voided,” Mcmurtry said.

She noted Gmerek didn’t deny creating false transactions to pay himself, but claimed the owner authorized the payments. But the judge noted there is “no similarity between the (off-record) benefits allegedly received by (other) employees, and the payments received by Mr. Gmerek.”

She added if Gmerek’s off-record income was, as he claimed, a bribe to induce him to alter the company’s reports to the bank, she would have expected evidence of problems between the bank and the company. Such evidence wasn’t found.

She said there was “no air of reality” to Gmerek’s claim the owner was aware of the transactions in question.

Sentencing was set over to July 9 in Yorkton.

Bank records show that Mr. Gmerek cashed the cheque ... while the Company records indicate that the cheque to him was voided.