R v Ellis, 2023 ABKB 26

Court of King’s Bench of Alberta Citation: R v Ellis, 2023 ABKB 26 Date: 20230117 Docket: 210605358Q1 Registry: Edmonton Between: His Majesty the King Crown - and - Nickolas Donovan Ellis Accused _______________________________________________________ Reasons for Decision of the Honourable Justice John T. Henderson _______________________________________________________ I. Overview [ 1 ] Nickolas Donovan Ellis (“Mr.

Ellis” or the “Accused”) is charged on a 17 count Amended Indictment with fraud, use or trafficking in forged documents, identity fraud (personation) and falsely representing himself to be a peace officer. [ 2 ] The Crown alleges that from February 2016 to March 2019, Mr. Ellis engaged in an elaborate scheme in which he presented several investment opportunities to eight of his friends, neighbours, and co-workers. The investment opportunities were interconnected with several investors participating in more than one opportunity. Some but not all these investment opportunities related in some way to Mr.

Ellis’ interest in sports memorabilia and his actual or purported business and personal connections with at least one well known retired National Hockey League (NHL) player. The promoted investments all promised significant returns for minimal risk within a relatively short time. Some, but not all the investments purported to be “guaranteed” by Mr. Ellis. [ 3 ] The Crown submits that all the investment schemes were fraudulent and were perpetrated by Mr. Ellis using several deceptive

practices including the use of forged documents and false email accounts. [4] The Crown asserts that because of the fraudulent conduct of Mr. Ellis, the Complainants have lost more than $1.7 million. The Crown seeks convictions on each of the counts on the Amended Indictment. [5] Mr. Ellis acknowledges permitting the Complainants to participate in a series of investment opportunities that were availableto him during the relevant time. However, he denies that he knowingly participated in any deceptive practices or any fraudulent activity. Mr.

Ellis submits that he may have been the victim of the fraudulent actions of others. [6] Moreover, Mr. Ellis submits that the Crown case is based on evidence that is largely circumstantial and it has not met its onusto prove the elements of the offences beyond a reasonable doubt. Mr. Ellis seeks an acquittal on each of the counts on the AmendedIndictment. [7] One of the counts on the Amended Indictment is unrelated to the investment schemes. That count charges that Mr. Ellissubmitted claims for reimbursement of expenses to his employer and that those expenses were fraudulent. Mr.

Ellis denies that the claimswere fraudulent. [8] I conclude that the investment opportunities presented by Mr. Ellis were a house of cards built on a foundation of deception. None of the investment opportunities were real and all were designed to generate substantial funds for Mr. Ellis at the expense of theinvestors. For the reasons that follow, I find Mr.

Ellis: • Guilty on each of the eight counts of fraud over $5,000 (counts 1, 5, 6, 8, 9, 10, 12 and 13), • Guilty on three counts of use or trafficking in a forged document (counts 19, 21 and 23), • Guilty on three counts of identity fraud (counts 18, 20 and 22) and [9] I find Mr. Ellis not guilty: • On the single count of attempted fraud over $5,000 (count 7), and • On the single count of fraud under $5,000 (count 15) • On the single count of falsely representing himself to be a peace officer (count 24) II. Legal Principles

a) Burden of Proof [10] The starting point in any criminal trial is that the accused is presumed innocent until proven guilty. This means that aconviction can only be entered if the Crown has tendered sufficient evidence to prove the guilt of Mr. Ellis beyond a reasonable doubt. The burden remains on the Crown throughout the trial; it never shifts to the defence. Conversely, if a reasonable doubt exists as to theguilt of Mr.

Ellis, he must be acquitted. [11] The Supreme Court of Canada in R v Lifchus, (SCC), [1997] 3 SCR 320 and in R v Starr, 2000 SCC 40,explained that a reasonable doubt is a doubt that is based on reason and common sense that is logically connected to the evidence, or theabsence of evidence. It is not a doubt that is based on sympathy or prejudice toward or against anyone. Proof beyond a reasonable doubtnecessarily requires a higher level of proof than probable guilt, but it does not require proof to an absolute certainty.

It does not requireproof beyond any doubt, but rather proof beyond a doubt that is not imaginary or frivolous.

b) Circumstantial Evidence [12] The Crown relies on circumstantial evidence to prove some of the elements of the offences charged. In this regard, the Crownsubmits that the totality of the evidence, when properly assessed, permits inferences to be made to support a finding of guilt on each of thecounts on the Amended Indictment. [13] The Supreme Court of Canada in R v Villaroman, 2016 SCC 33 (Villaroman) provided guidance in relation to circumstantialevidence. The Court explained the relationship between proof by circumstantial evidence and the requirement of proof beyond reasonabledoubt.

Villaroman makes it clear that the Court must consider whether any inference urged by the Crown is the only reasonable inferencethat may be drawn from the circumstantial evidence. The Crown must negative other “reasonable possibilities”; it does not, however, needto negative “every possible conjecture ... which might be consistent with the innocence of the accused”: Villaroman at para 37. TheSupreme Court also noted that “inferences must be reasonable given the evidence and the absence of evidence, assessed logically, and inlight of human experience and common sense”: para 36.

Alternative inferences must be reasonable and rational, not just possible: R vLazzaro, 2016 ABCA 353 at para 8, citing R v Dipnarine, 2014 ABCA 328. [14] When assessing circumstantial evidence, it is important to consider the totality of the objective facts proven by the evidencealong with the absence of evidence. “A gap in the evidence, or an absence of evidence, may support a reasonable inference other thanguilt”: R v Bjornson, 2018 ABCA 282 at para 22 (Bjornson).

An accused is not required to provide explanations other than guilt, as thiswrongly puts an obligation on an accused to prove facts, and “is contrary to the rule that whether there is a reasonable doubt is assessed byconsidering all the evidence”: Bjornson at paras 22-23; R v King 2020 ABCA 425 at para 30. [15] In R v Lehner, 2020 ABCA 248 at paras 28 and 29, the Court of Appeal provided a useful

summary of these principles:

… Villaroman is an excellent reminder to a trier of fact about too readily drawing inferences of guilt by overlooking reasonable alternativeinferences. The trier of fact is mandated to consider other plausible theories and other reasonable possibilities that are inconsistent withguilt. The Crown may need to negative those reasonable possibilities, but certainly does not need to negative every possible conjecturewhich might be consistent with the innocence of the accused.

Although the line between plausible theory and speculation is not always easy to draw, the basic question is whether the circumstantialevidence, viewed logically and in light of human experience, is reasonably capable of supporting an inference other than the guilt of theaccused. ... It was noted in Villaroman that “‘[c]ircumstantial evidence does not have to totally exclude other conceivable inferences’;that the trier of fact should not act on alternative

interpretations of the circumstances that it considers to be unreasonable; and thatalternative inferences must be reasonable, not just possible”: at para 42, citing R v Dipnarine at paras 22 and 24-25. [16] Where the criteria in Villaroman are properly applied, circumstantial evidence can be used to prove one or more of theelements of an offence, including that the accused person before the court was the person who committed the offence: R v Hassan Ali,2021 ABCA 21; R v Eide, 2021 ABCA 70; R v Habte, 2020 ABCA 476, R v Matchee 2019 ABCA 5; R v Brazeau, 2018 ABCA 170.

c) Elements of Fraud – s 380 [17] Eight of the counts on the Amended Indictment charge that Mr. Ellis committed fraud over $5,000 contrary to s 380(1)(

a) of theCriminal Code, RSC 1985, c C-46 (the Code), which provides: 380. FRAUD —

(1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within themeaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or anyservice, (

a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of theoffence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or [18] The actus reus of the offence is described by the Supreme Court in R v Olan (SCC), [1978] 2 SCR 1175 and inR. v Théroux, (SCC), [1993] 2 SCR 5 at para 16: (

i) the offence has two elements: dishonest act and deprivation; (ii) the dishonest act is established by proof of deceit, falsehood or "other fraudulent means”; (iii) the element of deprivation is established by proof of detriment, prejudice, or risk of prejudice to the economic interests of thevictim, caused by the dishonest act. [19] The concept of “other fraudulent means” in s 380(1) was discussed in R v Zlatic (SCC), [1993] 2 SCR 29 atpara 31 where the Court noted that this category of fraud has been used to support convictions in several situations where deceit orfalsehood cannot be shown.

These situations have included the use of corporate funds for personal purposes, non-disclosure of importantfacts, exploiting the weakness of another, unauthorized diversion of funds, and unauthorized arrogation of funds or property.

Zlatic citedthe following authorities in support of those examples: R v Black and Whiteside, (ON CA); R v Shaw, (NB CA); R v Wagman, (ON CA); R v Rosen, (ON SC), R v Côté and Vézina (No. 2), (QC CA); R v Hansen, 1983 ABCA 68 ; R v Geddes, (MB CA); R v Currie & R v Bruce, 1984CarswellOnt 1237 (ON CA), and R v Kirkwood, (ON CA). [20] In R v Iyer, 2020 ABCA 439 at para 46, the Court explained what is meant by “deprivation” within the meaning of s 380: The element of deprivation is satisfied on proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim.

It is notessential that there be actual economic loss as the outcome of the fraud: Olan at 1182.

Deprivation can also exist where an opportunity toprevent loss is taken away: see R v Gaetz, (NS CA), affirmed (SCC), [1993] 3 SCR 645; or, where anopportunity to profit is extinguished: see R v Kirkwood, (ON CA). [21] The mens rea of the offence is described by Justice McLachlin (as she then was) in Théroux at para 24: The mens rea would then consist in the subjective awareness that one was undertaking a prohibited act (the deceit, falsehood or otherdishonest act) which could cause deprivation in the sense of depriving another of property or putting that property at risk.

If this is shown,the crime is complete. [22] Justice McLachlin also noted that no defence arises based only on the accused’s hope that the deprivation would not take place,or that the accused may have felt there was nothing wrong with what he or she was doing.

d) Elements of Use or Trafficking in Forged Documents – s 368 [23] Three of the counts on the Amended Indictment charge that Mr. Ellis used or trafficked in forged documents contrary to s368(1)(

a) of the Code that provides: 368.

(1) Everyone commits an offence who, knowing or believing that a document is forged, (

a) uses, deals with or acts on it as if it were genuine. [24] To establish the offence the Crown must prove beyond a reasonable doubt that the document was forged, that the accused knewit was forged and that he or she used, dealt with or acted on the document as if it were genuine. The offence does not require an intent todefraud or to cause prejudice: R v Valois, (SCC), [1986] 1 S.C.R. 278, at pp. 282-3; R v Sebo 1988 ABCA 200

(leave to appeal refused [1988] S.C.C.A. No. 309); Manning, Mewett & Sankoff, Criminal Law, 5th ed (LexisNexis) at ¶23.28-23.58.

e) Elements of Personation (Identity Fraud) – s 403 [25] Three of the counts on the Amended Indictment charge that Mr. Ellis personated three different persons contrary to s 403(1) ofthe Code which provides: 403. IDENTITY FRAUD —

(1) Everyone commits an offence who fraudulently personates another person, living or dead, (

a) with intent to gain advantage for themselves or another person; (

b) with intent to obtain any property or an interest in any property; (

c) with intent to cause disadvantage to the person being personated or another person; or (

d) with intent to avoid arrest or prosecution or to obstruct, pervert or defeat the course of justice.

(2) CLARIFICATION — For the purposes of subsection (1), personating a person includes pretending to be the person or using theperson’s identity information — whether by itself or in combination with identity information pertaining to any person — as if it pertainsto the person using it. [26] The actus reus of the offence is that the accused person fraudulently personated a person. This can include an accused personpretending to be the person – s 403(2).

It is not necessary that anything actually be obtained as a result of the personation and the offencecan occur with or without an improper use of another person’s identity information. However, the person who is personated must be a realperson, living or dead: Manning, Mewett & Sankoff at ¶23.134. [27] The mens rea element is specified in subsections (

a) to (d), and can be made out in any one of those ways.

f) Elements of Impersonating a Peace Officer – s 130 [28] Mr. Ellis is charged with one count of impersonating a peace officer contrary to s 130 of the Code which provides that: 130. PERSONATING PEACE OFFICER —

(1) Everyone commits an offence who (

a) falsely represents himself to be a peace officer or a public officer; or ... [29] To obtain a conviction under this

section the Crown must prove beyond a reasonable doubt that the accused person maderepresentations that he or she was a peace officer when in fact that was not the case. [30] The mens rea element requires that the Crown prove that the accused person intended to make the representations knowing thatthey were false.

g) Assessment of Conflicting Evidence [31] Mr. Ellis does not have an onus to prove anything. For this reason, he was not required to testify. Despite this, he elected totestify and provide the Court with evidence relating to his involvement with the events that give rise to the allegations against him. Hisevidence conflicts in many material ways with the evidence tendered by the Crown. It is therefore necessary to assess Mr. Ellis’ evidencein accordance with the direction of the Supreme Court in R v W(D), (SCC), [1991] 1 SCR 742 (W(D)), as explained by Rv Ryon, 2019 ABCA 36 at para 51 and R v Achuil, 2019 ABCA 299 at para 18. This direction is as follows: (

i) The burden of proof is on the Crown to establish the accused’s guilt beyond a reasonable doubt and that burden remains on the Crownso that the accused person is never required to prove his innocence or disprove any of the evidence led by the Crown. (ii) In that context, if the accused’s evidence denying complicity or guilt (or any other exculpatory evidence to that effect) is believed, oreven if not believed still leaves the jury with a reasonable doubt that it may be true, then the jury is required to acquit. (iii) While I must attempt to resolve conflicting evidence bearing on the guilt or innocence of the accused, a trial is not a credibility contestrequiring me to decide that one of the conflicting versions is true.

If, after careful consideration of all the evidence, I am unable to decidewhom to believe, I must acquit. (iv) Even if I completely reject the accused’s evidence, I may not simply assume the Crown’s version of events must be true. Rather, Imust carefully assess the evidence I do believe and decide whether that evidence persuades me beyond a reasonable doubt that the accusedis guilty. Mere rejection of the accused’s evidence cannot be taken as proof of the accused’s guilt. [32] Mr.

Ellis testified that he used the monies invested by the Complainants to legitimately pay the persons who were required to bepaid so that the investments could proceed. In addition, Mr. Ellis expressly denied most or all the allegations that have been made againsthim by the Crown. [33] To properly understand the evidence of Mr. Ellis and to put it in the proper context, it is important to consider the nature of theallegations that have been made against Mr. Ellis. For this reason, before I address the details of the evidence of Mr.

Ellis, I will begin byidentifying the individual investors and the amounts that they contributed to the investments. Thereafter, I will assess the evidence of Mr.Ellis and determine if he should be believed or whether, even if not believed, his evidence, along with the other exculpatory evidence,gives rise to reasonable doubt.

III. Some Background on the Investors

a) The Investors [ 34 ] Each of the investors had known Mr. Ellis for a relatively short period of time prior to making their investment. Some met Mr. Ellis for the first time when he moved to a residential community adjacent to the Northern Bear Golf Course south of Sherwood Park, Alberta in or about 2015. Other investors met Mr. Ellis when he began his employment with Wainbee Canada Inc (“Wainbee”) in September 2015 or when Mr. Ellis became the General Manager of Barcol Doors and Windows Ltd (Barcol) in September 2017. i. Randy Blackburn [ 35 ] Mr. Blackburn met Mr. Ellis in September 2015 when Mr.

Ellis was hired by Wainbee as the VP for Saskatchewan and Alberta. Mr. Blackburn was a long-term employee of Wainbee, having worked there for more than 20 years. Very soon after Mr. Ellis arrived at Wainbee, he and Mr. Blackburn became friends. The friendship continued even after Mr. Ellis left Wainbee in July 2016. Mr. Blackburn described Mr. Ellis as his best friend. ii. Terry McLean [ 36 ] Mr. McLean is a millwright and businessman who owned and operated HTS Hydraulic Technical Service Inc (HTS) for 30 years until he sold the business to Wainbee effective December 31, 2015. Mr. McLean worked closely with Mr.

Ellis in closing the transaction and for a period of six months after the sale of the business. This was to ensure a smooth transition of the HTS business operations into Wainbee and also to ensure the successful integration of the HTS staff into Wainbee. During their time working together Mr. Ellis and Mr. McLean also developed a good friendship. iii. Boris Makowecki [ 37 ] Mr. Makowecki retired in 2014 from his position as Executive Vice President of Hyduk Energy Services Inc, a publicly traded corporation. Prior to that he was involved in several other business ventures.

Since his retirement he has managed investments through his private holding companies including Makow Properties Corp Ltd (Makow Properties). [ 38 ] Mr. Makowecki and Mr. Ellis were neighbours, both residing at the Northern Bear Golf Course. Mr. Makowecki began residing at Northern Bear in about 2014 and Mr. Ellis and his wife Jennifer began living there in or about 2015. Mr. Ellis and Mr. Makowecki also developed a close friendship and spent time golfing, socializing, fishing, and going to hockey games. iv. Darcy Deleeuw [ 39 ] Mr.

Deleeuw is a businessperson who has owned and operated Road Gear Sportswear Ltd. for the last 30 years. He also lived at the Northern Bear Golf Course and was a neighbour of both Mr. Makowecki and Mr. Ellis. Mr. Deleeuw also developed a friendship with Mr. Ellis that involved golfing, fishing, and socializing. v. Kent Halliday [ 40 ] Mr. Halliday was the director of marketing for ZCL Composites in Edmonton. In March or April 2017, he was introduced to Mr. Ellis through two of his golf partners, Mr. Makowecki and Mr. Deleeuw. Mr. Halliday and Mr. Ellis also became friends. vi. Stewart Lee [ 41 ] Mr.

Lee worked for Steelcraft Door Products Ltd (Steelcraft) and its subsidiary, Barcol. He was an 11-year employee and occupied the position of human resources manager. Mr. Lee met Mr. Ellis when Mr. Ellis was hired in September 2017 as the General Manager of Barcol. Mr. Lee’s relationship with Mr. Ellis was that of a co-worker. vii. Robert Hawman [ 42 ] Mr. Hawman had a career in the military which he left in 2017. Mr. Lee had been one of his former colleagues in the military and encouraged Mr. Hawman to consider Barcol as an employment opportunity. This led to a meeting with Mr. Ellis and resulted in Mr.

Hawman joining Barcol in November 2017. Like Mr. Lee, Mr. Hawman’s relationship with Mr. Ellis was purely as a co-worker. viii. Dusan Nikicevic [ 43 ] Mr. Nikicevic was a very long serving employee of Steelcraft, having started his career with that company after receiving an accounting diploma from NAIT in 1983. By 2017 he had been transferred to Barcol as the Controller and for a time was the interim General Manager of Barcol. When Mr. Ellis joined Barcol in September 2017 as General Manager, Mr. Nikicevic began reporting to him. Mr. Nikicevic’s relationship with Mr.

Ellis was that of a co-worker who reported to Mr. Ellis.

b) The Investment Contributions [ 44 ] Each of the investors contributed substantial amounts to the projects that were promoted by Mr. Ellis. The earliest and largest of the projects, in terms of the amount invested was the Dynasty Project in which Mr. Blackburn, Mr. McLean and Mr. Makowecki invested a total of more than $1.189 million.

[ 45 ] The Reebok Jersey Program was the second in time of the investment opportunities and was also the second largest of the investments. Six of the investors participated in the Reebok Jersey Program. A total of more than $319,000 was invested in this program by these investors. [ 46 ] The remaining investment opportunities came later in time and involved investments by only one investor each. For example, Mr. Nikicevic was the only investor in the Bridge Financing Project. Mr. Halliday was the only investor in the Barcol Acquisition project and Mr. Makowecki was the only investor in the Telus and Gretzky projects. With one small exception, all of the funds invested were lost. [ 47 ] A

summary of the amounts invested is as follows: Dynasty Project Reebok Jersey Program Bridge Financing Barcol Acquisition Telus/ Gretzky Total Blackburn 193,735 193,735 McLean 399,102 145,210 544,312 Makowecki 596,409 45,625 125,274 767,308 Deleeuw 39,375* 39,375* Halliday 39,375 49,475 88,850 Lee 25,000 25,000 Hawman 25,000 25,000 Nikicevic 40,250 40,250 Total 1,189,246 319,585 40,250 49,475 125,274 1,723,830 *Mr. Deleeuw received a return of $21,165 from Mr. Ellis in May 2018 IV. The Evidence of Mr. Ellis [ 48 ] Mr. Ellis is an intelligent and well-educated man.

He has a university education, including an Executive MBA from Queen’s University. Mr. Ellis is also an experienced business leader with a history of involvement in mergers and acquisitions, although as he explained, most major business transactions in the modern era involve acquisitions rather than mergers. His experience included participating in a 2009 acquisition that had a value of approximately $1 billion. [ 49 ] Mr. Ellis was highly regarded by those he worked with, including some of the Complainants. For example, Mr. Blackburn worked with Mr.

Ellis at Wainbee and described him as a high energy person with many good business ideas. He was impressed by the work that Mr. Ellis had done for Wainbee. [ 50 ] Mr. Ellis acknowledges having received more than $1.7 million from the Complainants in relation to investment opportunities. Mr. Ellis testified that on receipt of those monies “... I gave it to the people that it needed to go to”, meaning that he did not improperly keep the funds for his personal use. [ 51 ] Mr. Ellis acknowledges that most of the investors have not received a return of their investment funds. However, Mr.

Ellis denies knowingly participating in any fraudulent activity.

a) The Dynasty Project [ 52 ] Mr. Ellis testified that he was approached by a software developer by the name of “Dean” who was attempting to raise “seed money” for the further development and sale of an “app” technology which was to be licenced. The technology involved a mechanism to communicate via a subscription service with athletes before and after games. These chats or streams were intended to provide the customer with a more in-depth understanding of the athlete at different times. The plan for the technology included a partnership with sports leagues. [ 53 ] Mr.

Ellis testified that he met “Dean” in the following manner: I met him through associates of my ex-wife who was in the computer world --- nothing like that. She didn’t design anything. She was actually an IT person that fixed computers. A friend of a friend of hers – and she told me that maybe I should talk to this person. So I went into Sherwood Park and met this person at Starbucks on Wye Road. And they sort of explained it to me. There was someone else with him that day which I never met again. And he kind of rolled it out to me and explained to me.

Showed me a lot of stuff on a computer screen that didn’t completely make sense to me but I was understanding what they were telling me and where they wanted to go and what they wanted to be. [ 54 ] Mr. Ellis testified that he could not remember “Dean’s” last name. Mr. Ellis did not testify as to when the Starbucks meeting took place. [ 55 ] Mr. Ellis testified that after his meeting with “Dean”, he was contacted by Tom and Frank Tiebert. The Tieberts represented themselves to be lawyers from Ontario who were acting on behalf of the Dynasty Project. Their work included attempts to get “sign off” from the leagues.

Mr. Ellis’ first contact with the Tieberts was via email, following which Mr. Ellis had many phone calls and emails from the Tieberts. In addition, he and Mr. McLean met in person with Tom Tiebert in Edmonton at a Starbucks Restaurant for a short visit. Mr. Ellis testified that he has never met Frank Tiebert.

[ 56 ] Mr. Ellis acknowledged receiving from each of Mr. Blackburn, Mr. McLean and Mr. Makowecki substantial funds for investment in the Dynasty project. The plan was that each of the investors would receive very large returns (millions or billions of dollars) on the closing of the sale of the technology to Microsoft. The closing was originally contemplated to take place within a short timeframe after the investments were made, but the closing was delayed on numerous occasions for the reasons given in emails from the Tieberts which Mr. Ellis passed on to the investors.

At various times the Tiebert emails represented that some or all of the funds for closing were in a trust account. [ 57 ] Mr. Ellis testified that there were several variations of the “app” that were being developed by the computer programmers, thus giving rise to three “different versions” of the technology. He explained that they were “separate and different”. He testified that Mr. Blackburn, Mr. McLean and Mr. Makowecki each invested in different variations of the app. [ 58 ] Mr. Ellis denied that he sold the very same interest in the technology three different times to Mr. Blackburn, Mr. McLean and Mr.

Makowecki, as suggested by the Crown. He testified: Q. Okay. And you never thought to disclose to the other complainants involved in different versions of the Dynasty Group that actually you had three versions of the Dynasty Group Partnership? A. I don’t know that it would be any of their business. Q. Well, don’t you think that it would be confusing in terms of what they understood that they owned? A. No. They knew what they owned. They knew that they owned that piece that was that property. Q. I am going to suggest to you that that’s nonsense, that’s just a fiction. A. I disagree with you 100%. [ 59 ] Mr.

Ellis testified that all his information regarding the Dynasty Project came from “Dean” and from the Tieberts. He testified that he was just as frustrated as Mr. Blackburn, Mr. McLean and Mr. Makowecki that the project did not progress on the timeline originally anticipated. He also shared their frustrations when meetings were delayed or cancelled. However, he continued to have confidence in the legitimacy of the project. [ 60 ] Banking records from his accounts at the Royal Bank of Canada (RBC) have been admitted by Mr. Ellis.

Specifically with respect to the Dynasty Project the banking records show that almost $1.2 million was deposited into Mr. Ellis’s RBC accounts by Mr. Blackburn, Mr. McLean and Mr. Makowecki. [ 61 ] The Dynasty Project began in approximately February 2016. Mr. Ellis testified that the project continued until approximately March 2019 when Mr. Blackburn, Mr. McLean and Mr. Makowecki just “stopped talking” to Mr. Ellis. This was at the time when the investors made complaints to police and the fraud investigation began. The closing of the Dynasty Project had not taken place by that time.

Nor did the closing ever take place. i. Tieberts Request Investor Contributions [ 62 ] During the first two and one half years of the project, many emails were sent by the Tieberts to Mr. Ellis asking for additional funds for various purposes in relation to the Dynasty Project. Those emails were passed on by Mr. Ellis and funds were then provided by the investors to Mr. Ellis who then deposited the funds into one of his accounts at RBC. Mr.

Ellis testified that he received these monies but then passed the funds on to the Tieberts as he was required to do. [ 63 ] The Crown submits that the Tieberts were not real persons, and that Mr. Ellis was responsible for creating the Tiebert email account. The Crown also submits that Mr. Ellis was responsible for creating the email messages which he sent purporting to be the Tieberts, all as part of a fraudulent scheme to extract substantial additional contributions from the investors in the Dynasty Project. [ 64 ] When testifying, Mr.

Ellis forcefully denied that he created the Tiebert email account, and he also forcefully denied that he was the author of any of the Tiebert emails. [ 65 ] Mr. Ellis testified that he did not send any emails holding himself out to be Tom Tiebert. [ 66 ] Mr. Ellis testified that he did not send any emails holding himself out to be Frank Tiebert. [ 67 ] Mr. Ellis testified that he has no knowledge of whether his wife or any other person used his cell phone or any other device to send or receive email messages that might be relevant to this case. ii. The Scotiabank Account [ 68 ] The Crown submitted that Mr.

Ellis received large amounts of money from the investors in the Dynasty project, but that Mr. Ellis did not properly deal with those funds by passing them on to the Tieberts or other persons who were to be the proper recipients. [ 69 ] In partial response to those assertions, Mr. Ellis testified that in or about early 2017, he opened and maintained a bank account at Scotiabank (the “Scotiabank Account”). Mr.

Ellis testified that the Scotiabank Account held significant funds at times and that he used the Scotiabank Account for processing payments with respect to some of the investments that are the subject of this litigation. [ 70 ] Mr. Ellis testified that he couldn’t be sure but he “wanted to say” that he paid the Tieberts from this account.

He testified that he also paid the Tieberts funds in unconventional ways including cash drops, transfers of securities, the use of payday loans and by paying inflated purchase prices at a coin and stamp business in West Edmonton Mall (presumably with the excess funds being passed on by the

merchant to the Tieberts). [ 71 ] The Crown tendered extensive banking records from RBC, Scotiabank and credit card companies that been obtained by a Production Order. In response to the Production Order, Scotiabank responded with affidavits disclosing the records that they held in relation to Mr. Ellis. These records did not disclose any bank account as described by Mr. Ellis. [ 72 ] The Crown submits that the Scotiabank Account did not exist. [ 73 ] Mr.

Ellis insisted that the Scotiabank Account was real and that he used the account in relation to the investments that are the subject of the present charges. iii. Mike Bossy and the Dynasty Project [ 74 ] Mike Bossy was a retired professional hockey player who passed away in the Spring of 2022. Prior to his death, Mr. Bossy made several paid personal appearances at events organized by Mr. Ellis including a “Fins and Skins” golf and fishing event, a Barcol golf tournament in the summer of 2018 and an Edmonton Oilers hockey game. Mr. Bossy was introduced to each of Mr. Blackburn, Mr. McLean and Mr.

Makowecki at one or more of these events. [ 75 ] Mr. Ellis testified that Mr. Bossy was never involved in any way with the Dynasty project. An Agreed Statement of Facts confirms, among other things that “Bossy has never been involved in the ‘Dynasty Project’ or any form of software or social media development, either with the Accused or with any other person”. [ 76 ] Despite Mr. Bossy not being involved in the Dynasty Project, each of Mr. Blackburn, Mr. McLean and Mr. Makowecki received communications from an email address, bossym573@*****.

The person sending the email messages represented that he or she was Mike Bossy and provided input regarding the Dynasty Project. [ 77 ] The Agreed Statement of Facts makes it clear that Mike Bossy did not know of and had never used the bossym573@***** email account. As a result, messages from this email account from a person pretending to be Mr. Bossy were not actually from Mr. Bossy and in this way the messages were dishonest and deceitful. [ 78 ] The Crown argues that the fake Bossy email account was fraudulently created and used by Mr.

Ellis to further manipulate the investors and entice them to make ongoing investments into the Dynasty Project. [ 79 ] Mr. Ellis testified that he did not create the fake Bossy email account. [ 80 ] Mr. Ellis testified that he did not use the fake Bossy email account to send messages to any of Mr. Blackburn, Mr. McLean or Mr. Makowecki. iv. Bruce Geiger – Miller Thomson [ 81 ] Bruce Geiger is a lawyer practicing in the Edmonton office of the law firm of Miller Thomson LLP. Neither Mr. Geiger nor Miller Thomson LLP had any involvement with Mr.

Ellis or with the Tieberts or with any of the events that give rise to the criminal charges against Mr. Ellis. [ 82 ] Mr. Ellis testified that he first became aware of Miller Thomson and Mr. Geiger sometime in late April 2018. [ 83 ] Mr. Makowecki testified that he received an email from Mr. Ellis dated May 1, 2018. This email forwarded an email from Frank Tiebert dated May 1, 2018 which, in turn, attached a letter from Miller Thomson dated April 30, 2018 purportedly signed by Mr. Geiger.

The Miller Thomson letter confirmed that $33,015,513.86 was being held in an interest-bearing trust account for the benefit of B&G Group Ltd and Makow Properties Ltd (Mr. Makowecki’s holding company). [ 84 ] The B&G Group referred to in the Miller Thomson letter is not a corporate entity. Instead, it is a trade name that Mr. Ellis registered with the Alberta Corporate Registry on March 22, 2017. After registering B&G as a trade name, Mr. Ellis opened a bank account in the name of B&G Group at RBC on or about March 28, 2017. In the RBC account opening documentation, Mr.

Ellis represented that B&G Group was a sole proprietorship and that he owned a 100% interest in the proprietorship. [ 85 ] It is admitted that the Miller Thomson letter is a forgery. [ 86 ] There is an inconsistency in Mr. Ellis’s evidence as to whether he received the May 1, 2018 Tiebert email or the April 30, 2018 forged Miller Thomson letter. Nevertheless Mr. Ellis was consistent in denying responsibility for the Miller Thomson letter. [ 87 ] Mr. Ellis denied that he was the author of the Tiebert email dated May 1, 2018. [ 88 ] Mr.

Ellis denied that he was the author of the forged Miller Thomson letter dated April 30, 2018. [ 89 ] Mr. Ellis denied that he was responsible for the signature of Mr. Geiger on the forged Miller Thomson letter. v. “RCMP Officer” Paul Desjardins [ 90 ] Mr. Makowecki testified that after learning in mid September 2018 that the Miller Thomson letter was a forgery, he met with Mr. Ellis to apply some pressure and to discuss concerns with the Dynasty Project. According to Mr. Makowecki, Mr.

Ellis disclosed that his brother and a banker had been engaged in some type of fraudulent activity in relation to the Dynasty Project, the RCMP were investigating, and arrest warrants were being executed. According to Mr. Makowecki, Mr. Ellis told him that a RCMP member by the name of Paul Desjardins would be contacting him in relation to the investigation.

[ 91 ] Over the next six weeks Mr. Makowecki had several text communications with a person holding himself out to be an investigator by the name of Paul Desjardins and that several meetings were scheduled, including meetings at a restaurant in Mexico where Mr. Makowecki was holidaying. None of the meetings took place. [ 92 ] It is admitted that Paul Desjardins is not a member of the RCMP and that the RCMP were never investigating Mr. Ellis’ brother or a banker in relation to fraud allegations. [ 93 ] Mr. Ellis testified that he had never seen the text messages between Mr. Makowecki and Paul Desjardins. [ 94 ] Mr.

Ellis testified that he did not write any of the text messages that purported to come from Paul Desjardins. [ 95 ] Mr. Ellis testified that he is not associated with the telephone number used by Paul Desjardins to have text communications with Mr. Makowecki. [ 96 ] Mr. Ellis testified that he has never held himself out to be Paul Desjardins.

b) The Reebok Jersey Program [ 97 ] It is admitted by the Crown and the Defence that beginning in the 2017-18 NHL season (which commenced in October 2017), the league switched from Reebok-branded team jerseys to Adidas-branded team jerseys. As a result, any remaining stocks of Reebok- branded NHL team jerseys would not be considered current. [ 98 ] Mr. Ellis testified that the Reebok Jersey Program involved the purchase of some of the Reebok team jerseys, having the jerseys framed and then reselling the jerseys for a profit. [ 99 ] Mr.

Ellis testified that project began when he was in contact with a person named “Jack” through the “collecting world”. He did not know “Jack’s last name, but Mr. Ellis had seen “Jack” at a few events. Mr. Ellis did not explain the month or the year in which this contact took place. [ 100 ] Mr. Ellis testified that “Jack” had some connections with Upper Deck, a sports memorabilia distributor in the United States. Mr. Ellis described the development of the Reebok Jersey Project as follows: ... he [Jack] had given me a couple of Upper Deck jerseys that I took away. And then that’s how that was formatted.

And that kind of exploded – it was sort of three different entities; jerseys from Canadian teams, game used jerseys, and then there was some potential of some equipment as well as jerseys. [ 101 ] At some time following their first contact, “Jack” provided Mr. Ellis with a four-page

schedule listing over 1,000 jerseys (both home and away jerseys of over 150 NHL players) that would be available for use in the Reebok Jersey Program. The list also included other hockey equipment that would be available. [ 102 ] Mr. Ellis testified that Mr. Wei Wong became involved in the Reebok Jersey Program. Mr. Wong operated a business in Edmonton, Vestate Canada Inc (Vestate), which, among other things, framed sports jerseys and other sports memorabilia. Mr. Ellis testified that Mr.

Wong’s involvement in the Reebok Jersey Program was for the purpose of framing jerseys prior to their sale to the ultimate customer. Mr. Ellis arranged for each of the investors in the Reebok Jersey Program to tour the Vestate manufacturing facility. All agreed that the facility was impressive. [ 103 ] Mr. Ellis testified that he had used Mr. Wong’s services in the past to very good success and that the quality of Mr. Wong’s work was better than anything that he had ever seen. Mr. Ellis testified that he spoke to Mr. Wong regarding the Reebok Jersey Program. As explained by Mr.

Ellis: We had discussed very briefly one time on his ability to handle a significant number of jerseys and it was a non-issue. He said just bring them and let me do them. [ 104 ] Mr. Ellis testified that from 2016 to 2018 or 2019, Mr. Wong framed between 80 and 100 jerseys for him. Later he estimated that in total for all the projects, more than 100 and less than 150 jerseys were framed by Mr. Wong. [ 105 ] In cross-examination the Crown suggested that the Jersey Project was a fiction. Mr. Ellis emphatically disagreed. [ 106 ] Also in cross-examination, the Crown suggested that Mr.

Ellis had sold the very same interest in the jersey project three times to different investors or groups of investors. Once again Mr. Ellis emphatically disagreed.

b) The Bridge Financing Project [ 107 ] The Bridge Financing Project began in late 2017. Mr. Nikicevic invested two amounts in the project, $24,500 on November 1, 2017, and $15,750 on December 5, 2017. Both amounts were deposited into Mr. Ellis’ B&G account at RBC. [ 108 ] Mr. Ellis described his involvement with the project by saying “there were a group of guys” that he knew from the golf course. The plan was described by Mr. Ellis in the following way: We – so there was a group of them and then Dusan [Mr.

Nikicevic] invested into me because that’s what I was explained by one of the other guys is that he had people invest in him. I believe it was his brother-in-law. And then they would give all the money to the guy buying the property. And then his brother, I believe, was the real estate agent. An then we would bridge the financing in between two buildings or three buildings.

[ 109 ] Mr. Ellis testified that the investment group in relation to the Bridge Financing Project “had nothing to do with hockey players”. Specifically, Mr. Ellis testified that Kevin Lowe and Craig MacTavish were not involved. [ 110 ] Mr. Ellis was not able to identify the persons in the group who were participating in the Bridge Financing Project. In cross- examination he testified as follows: Q. Okay. And in terms of bridge financing at some point the different investors’ funds need to come together at some point, right, for the actual financing to work.

So who ultimately was in control of the financing project in which Mr. Nikicevic was brought in? A. One of the other guys. Q. What’s his name? A. A bunch of guys I should have never gotten involved with. His name was Brad. Q. Brad? A. I don’t know. Q. It wouldn’t be Brad Sevryn (phonetic) the accountant? A. No. No. Q. And how did you – A. Brent. Brent, not Brad. Brent. Q. And how did you pay Brent? A. Cash that’s how I got involved with these buys in the first place. [ 111 ] Mr. Ellis testified that at some point after Mr. Nikicevic made his investments, he reported to Mr.

Nikicevic that the project had been profitable and that Mr. Nikicevic’s share of the profit was $75,000. However, Mr. Ellis also told Mr. Nikicevic that he had reinvested the funds. [ 112 ] Mr. Ellis testified that Mr. Nikicevic has been repaid his investment in the Bridge Financing Project. He explained that the repayment was made by giving Mr. Nikicevic access to a townhouse in Arizona for a few days during a soccer tournament. Mr. Ellis also said that Mr. Nikicevic was paid by the delivery of some cash, although he did not specify the amount. Finally, Mr.

Ellis testified that on his arrest he was in possession of $21,455 that was seized by police and subject to civil forfeiture. Mr. Ellis attributes this as a repayment to Mr. Nikicevic. [ 113 ] The Crown submits that the Bridge Financing Project was a sham that never existed. [ 114 ] Mr. Ellis denies that this is the case.

d) The Barcol Acquisition Project [ 115 ] Mr. Ellis began his employment as the General Manager of Barcol in September 2017. Several months later he was promoted to the Chief Operating Officer of Steelcraft. In those positions he became familiar with the affairs of Barcol and Steelcraft. In Mr. Ellis’ view, Barcol required some structural changes to make it more efficient. In particular, he observed that there was a problem with the whole relationship between Steelcraft as the parent company, and Barcol the subsidiary.

The identified problem was that Barcol could only sell Steelcraft products and was therefore “beholden to Steelcraft”. For this reason, and given his background in acquisitions, Mr. Ellis felt that Barcol was an acquisition target. [ 116 ] Mr. Ellis testified that he began discussions with the owner of Barcol and Steelcraft, Kim Mihalcheon. He testified that he asked Ms. Mihalcheon whether she was interested in selling Barcol. Her response was that “anything is for sale”. Mr. Ellis further elaborated on Ms. Mihalcheon’s willingness to sell by testifying: ...

I guess a bit of a joke in that world that when you ask someone if they are for sale, there are only two answers. Number 1 is yes and the other one is absolutely not but if I was, how much do you think its worth? And that is where we were with Kim [Ms. Mihalcheon]. [ 117 ] Mr. Ellis emphasised that Ms. Mihalcheon did not have an emotional attachment to Barcol because it wasn’t in the family. He explained that Ms. Mihalcheon’s father had originally been a small shareholder in Barcol and later acquired the interests of the other shareholders until he owned the entire company. [ 118 ] Based on this Mr.

Ellis testified that he initiated a process for a potential acquisition of Barcol. He began by separately approaching Mr. Makowecki and then Mr. Deleeuw in or about mid to late 2018. He explained to them that Ms. Mihalcheon was seriously ill with cancer and wanted to sell Barcol. Both Mr. Makowecki and Mr. Deleeuw were interested in participating in the venture but ultimately neither went further with the investment opportunity. [ 119 ] Mr. Ellis testified that he also approached Mr. Halliday regarding the purchase of Barcol. As was the case with Mr. Makowecki and Mr. Deleeuw, Mr. Ellis explained that Ms.

Mihalcheon was seriously ill and for this reason was a motivated seller. Mr. Halliday’s interest in Barcol was greater than simply as an investor because, in or about September 2018, he resigned from his employment with ZCL Composites and was very interested in working with Mr. Ellis and becoming a senior member of the Barcol management team.

[ 120 ] Mr. Ellis and Mr. Halliday entered into an agreement in writing dated January 24, 2019 by the terms of which Mr. Halliday purchased a 50% interest in “B&G Group Ltd” for a payment of $25,000 from Mr. Halliday to Mr. Ellis. The agreement also provided that: B&G Group Ltd. is in the process of acquiring 93.75% ownership of Barcol Door Ltd. and an additional stake in Steelcraft Door Ltd of 23.5%. Ellis and Halliday will be partners in this venture. [ 121 ] Mr. Halliday made a second investment in the Barcol acquisition project on March 8, 2019.

The amount of the investment was $24,475. [ 122 ] The Crown submits that the Barcol Acquisition project was not real but was simply a scheme to enrich Mr. Ellis at the expense of Mr. Halliday. [ 123 ] Mr. Ellis denies any fraudulent activity in relation to the Barcol Acquisition.

e) Other Investment Opportunities [ 124 ] In 2018, Mr. Ellis sought and secured additional funds from Mr. Makowecki in relation to two other projects. The first was related to software development for Telus for which Mr. Makowecki paid Mr. Ellis $30,375. The second entailed limited merchandise related to Wayne Gretzky. Mr. Makowecki paid a total of $94,899 to participate in the Gretzky opportunity. [ 125 ] The Crown submits that both projects were shams designed to enrich Mr. Ellis at Mr. Makowecki’s expense. [ 126 ] Mr. Ellis denied any wrongdoing in relation to these projects. V. Assessment of Evidence of Mr.

Ellis [ 127 ] It is first necessary for me to assess Mr. Ellis’ credibility. I must determine whether I believe his evidence and thus whether he should be acquitted on that basis. [ 128 ] The thrust of Mr. Ellis’ evidence is that all of the investment projects were legitimate business opportunities and that all the funds he received from the investors were passed on to those who were properly entitled to receive them. He denies that he sold the same interest in the Dynasty Project or the Reebok Jersey Program to different sets of investors.

He denies any dishonesty or fraud in relation to the investment opportunities. [ 129 ] I do not believe Mr. Ellis. [ 130 ] I do not find Mr. Ellis to be a truthful or a credible witness. [ 131 ] Mr. Ellis gave evidence that is demonstrably false on material issues. His evidence was inconsistent with facts admitted in the Agreed Statement of Facts, is internally inconsistent and, in many respects, his evidence defied reason and common sense. [ 132 ] I will describe some of the examples of Mr. Ellis’ lack of credibility. [ 133 ] Mr.

Ellis testified that the Reebok Jersey program was sold to three groups of investors and that each of the three groups purchased a different “piece”. That evidence is demonstrably false. The falsehood is made clear by a comparison of two of the Joint Venture Agreements signed by the parties. That comparison establishes that the Joint Venture Agreement signed by Mr. Makowecki and Mr. Deleeuw in November 2017 (later to include Mr. Halliday) and the Joint Venture Agreement signed by Mr. Lee and Mr.

Hawman in April 2018 both contain identical language to describe the scope of the joint venture: Clause 2 The business name of the Venture will be Reebok Jersey Program Clause 3 The exclusive purpose of the Venture will be the NHL Jersey and Equipment Purchase and Resale . Clause 4 This venture will begin starting ... and continue in full force and effect (the “Term”) until the occurrence of the following event: o As agreed upon, all jerseys that are wanted have been purchased based upon first right of refusal.

Clause 7 The Members have appointed Nick Ellis to act as manager (the “Manager”) for the Venture (emphasis added) [ 134 ] The scope of these agreements is identical. There is no room to suggest that these two groups of investors were purchasing different “pieces” of the Reebok Jersey Program. Mr. Ellis lacks credibility when he suggests otherwise. [ 135 ] Moreover, the Joint Venture Agreements of November 2017 and April 2018 were executed long after Mr. McLean had invested in the Reebok Jersey Program in September 2017. Mr. Ellis did not testify that he imposed restrictions on the scope of the agreement with Mr.

McLean. After having sold the Reebok Jersey Program to Mr. McLean there was nothing left to sell to the two groups of joint venturers in November 2017 and April 2018. [ 136 ] Mr. Ellis explained that Mr. McLean moved from the original Reebok Jersey Program to the Upper Deck “piece”. This explanation potentially has some support because Mr. McLean’s name appeared as a party to the November 2017 Joint Venture

Agreement but was seemingly removed from the agreement when Mr. Halliday purchased Mr. McLean’s interest in the Joint Venture Agreement in February 2018. This is potentially consistent with Mr. Ellis’ evidence that Mr. McLean was moving to the Upper Deck “piece”. However, Mr. Ellis’s evidence in this regard cannot be assessed in isolation but instead needs to be considered in the context of the other evidence, including the evidence of Mr. McLean that he never signed the Joint Venture Agreement, that his signature on the agreement is a forgery and that he was never in a joint venture with Mr. Makowecki and Mr.

Deleeuw as described in the November 2017 Joint Venture Agreement. When viewed in context, Mr. Ellis is not believable when he said that Mr. McLean’s September 2017 investment in the Reebok Jersey Program somehow transitioned into the Upper Deck “piece”. In any event, as I will describe later, the Upper Deck “piece” was fictional. [ 137 ] I conclude that Mr. Ellis was not being candid when he testified that each of the three groups of investors were sold different “pieces” of the Reebok Jersey Program. [ 138 ] Similarly, Mr.

Ellis was not being candid when he repeatedly testified that each of the three Dynasty Project investors had purchased different “pieces” of that project. When Mr. McLean first invested in the Dynasty Project in March 2016, a guarantee was given by Mr. Ellis in relation to Mr. McLean’s investment. The guarantee disclosed that Mr. McLean was purchasing 40% of Mr. Ellis’ interest in the Dynasty Group. The guarantee includes these additional handwritten words: Terry will own 40% of all Holdings Involved Including Intellectual Property – Dynasty Group, Dynasty 79 Group and any Holdings owed by Nick Ellis. [ 139 ] Mr.

Ellis testified that these words were added to the guarantee to ensure that Mr. McLean would be “included in everything”. Mr. Ellis testified: It was actually Terry who said we should do something like this. He had been on a couple of opportunities where they had invested in some very specific technology and then other things branched out. And then he was told oh, the piece that you were in was only small. Everything else made money. So he wanted to ensure that he would be included in everything. [ 140 ] Having agreed to provide a guarantee on terms that were intended to make it clear that Mr.

McLean was “included in everything”, Mr. Ellis’s testimony that Mr. McLean had only purchased one of three “pieces” of the Dynasty Project is simply not believable. [ 141 ] Moreover, Mr. Ellis acknowledged in cross-examination that the evolution of the Dynasty Project into three pieces did not take place until at or around the time that Mr. Makowecki invested in the Dynasty Project. That was more than six months after both Mr. Blackburn and Mr. McLean invested in the Dynasty Project in February 2016 and March 2016 respectively. Thus, even if Mr.

Ellis’s evidence on the evolution of the Dynasty Project is true, the transition into three “pieces” did not take place until after he had sold the same interest in project to both Mr. Blackburn and Mr. McLean. [ 142 ] I do not believe Mr. Ellis when he testified that he sold separate “pieces” of the Dynasty Project to the three investors. [ 143 ] Mr. Ellis was also inconsistent in his evidence on material points. For example, in his direct evidence he testified that he was aware that a letter dated April 30, 2018 from the law firm of Miller Thomson had been given to Mr. Makowecki.

That letter certified that the law firm was holding more that $33 million in trust for the benefit of B&G and Makow Properties Ltd (Mr. Makowecki’s holding company). By an Agreed Statement of Facts, it is admitted that the Miller Thomson letter was a forgery. However, in cross-examination, Mr. Ellis denied knowing anything about the letter. This was directly inconsistent with his examination-in-chief on a material point. Mr.

Ellis lacks credibility when he asserts a lack of knowledge regarding the forged Miller Thomson letter. [ 144 ] The involvement of Mike Bossy as an investor in the Dynasty Project was also a material issue on which Mr. Ellis was inconsistent. Mr. Ellis repeatedly testified that Mike Bossy was not involved in the Dynasty Project. This is confirmed in the Agreed Statement of Facts. Despite these admissions, Mr. Ellis testified that he received an email from Frank Tiebert dated July 13, 2017 which he passed on to Mr. Makowecki. The Tiebert email specifically refers to Mr.

Bossy as having a 10% interest in the project and that Mr. Ellis and Mr. Makowecki each had a 45% interest. The inconsistency between the admitted facts and what Mr. Ellis led Mr. Makowecki to believe in 2017 regarding Mr. Bossy’s involvement undermines Mr. Ellis’ credibility. [ 145 ] Mr. Ellis was cross-examined regarding the disposition of the funds he received from Mr. Nikicevic in relation to the Bridge Financing Project. He testified that the funds were paid to Frank and Tom Tiebert.

However, there was no evidence that the Tieberts were involved in any of the investments other than the Dynasty Project and the Telus Project. Moreover, Mr. Ellis also testified that Mr. Nikicevic’s investment in the Bridge Financing Project represented a purchase of a portion of Mr. Ellis’ interest in the project which, if true, would suggest that he was entitled to keep the proceeds of that sale and not pass them on to the Tieberts or anyone else. Mr. Ellis’s evidence regarding this investment was circular and not credible. [ 146 ] Mr.

Ellis was cross-examined on the statement he provided to police following his arrest. He testified that prior to police proceeding with the interview he had not been cautioned by police regarding his right to remain silent. However, the recording from the interview clearly demonstrates that the proper caution was given. [ 147 ] During the police interview Mr. Ellis was asked what had happened to the $1.8 million he had received by the investors. Mr. Ellis responded by saying that he had never had the money. The banking records and Mr. Ellis’ own evidence proves that this was false. [ 148 ] Mr.

Ellis testified that a $120,000 payment was to be made to the Edmonton Oilers in connection with the Reebok Jersey Program. He explained that this was to be “our first big purchase through the Oilers”. Mr. Ellis showed Mr. McLean the cheque of B&G Group dated October 5, 2017 in the amount of $120,000 payable to “Edmonton Oilers Hockey Club”. This led Mr. McLean to believe that $120,000 was being paid to the Oilers. However, the cheque was never given to the Oilers and certainly was not negotiated. Mr.

Ellis’s evidence in relation to a $120,000 payment to the Oilers is in direct conflict with the Agreed Statement of Facts which proves that the Oilers have never had any discussions with or been involved with Mr. Ellis or B&G in any investment or business including the bulk sales of team jerseys or equipment. Mr. Ellis is lacking in credibility when he testified that $120,000 was to be paid to the Oilers for jerseys.

[ 149 ] Mr. Ellis had a meeting with Mr. Makowecki on January 14, 2019. During that meeting Mr. Ellis represented that Mr. Deleeuw was no longer part of the Reebok Jersey Program and that he had been paid $60,000 in relation to the investment. If true, this would have meant that Mr. Deleeuw received a 50% profit on his investment. Mr. Ellis’ representation was not true. Mr. Deleeuw was paid $21,156 in May 2018. This resulted in Mr. Deleeuw’s loss being reduced from $39,375 to $18,219. [ 150 ] Mr.

Ellis is also lacking in credibility when he testified that after receiving the investment monies from the investors “... I gave it to the people that it needed to go to”. The banking records are admitted by Mr. Ellis. The records demonstrate that 100% of the $1.7 million invested by the Complainants were deposited into one of four accounts at RBC: a joint account with his wife (account ending ... 9249), a savings account (account ending ...0438), a second savings account (account ending ...7905) and a B&G account (account ending ... 0677).

The banking records show no evidence that funds were passed on to anyone who was intended to be the ultimate legitimate recipient. To the contrary the banking records show that the funds received from investors were primarily used to paydown Mr. Ellis’ lines of credit, loan payments and personal credit card balances. [ 151 ] I conclude that I cannot believe the evidence of Mr. Ellis and, as a result, I cannot acquit at the first stage of W(D) . [ 152 ] Even though I do not believe the evidence of Mr.

Ellis, I still need to consider whether his evidence denying guilt leaves me with a reasonable doubt. [ 153 ] One of the grounds on which the Crown submits that fraud has been established is that none of the investment schemes were real and that they were all shams. Mr. Ellis denied that this was the case. He emphasized that the investment programs were legitimate. In assessing whether this assertion creates a reasonable doubt, I need to consider the totality of his evidence. [ 154 ] When describing the investment programs, Mr.

Ellis was not able to identify the actual name of any of the persons he was dealing with. For example: • In relation to the Dynasty Project, Mr. Ellis testified that he met with “Dean” though a friend of a friend of his wife. The meeting took place at a Starbuck’s restaurant. He did not know “Dean’s” last name. • In relation to the Reebok Jersey Program, Mr. Ellis testified that he was in contact with a person named “Jack” who was a person he had met in the “collecting world”. Mr.

Ellis testified that did not know “Jack’s” last name, but that he had seen “Jack” at a few events. • Also in relation to the Reebok Jersey Program, Mr. Ellis testified that he was contacted by “someone” with the Edmonton Oilers and made arrangements to purchase an inventory of jerseys in exchange for $15,000. Mr. Ellis testified that he paid the amount in cash to “Richard” but that he did not receive a receipt for the money, nor did he receive all of the jerseys he was entitled to. Mr. Ellis did not know “Richard’s” last name. • In relation to the Bridge Financing Project, Mr.

Ellis testified that he became involved in the project with “a bunch of guys” from the golf course. He thought the name of his contact was “Brad” but then later said it was “Brent”. There was no indication that he knew “Brent’s” last name. [ 155 ] Mr. Ellis did not have any obligation to testify. Nor does he have any onus or obligation to prove that the investment programs were real or legitimate. However, because he testified, his credibility must be assessed for the purpose of determining whether his evidence gives rise to reasonable doubt.

Reasonable doubt must be based on reason and common sense that is logically connected to the evidence, or the absence of evidence. The evidence given by Mr. Ellis regarding the persons he had direct contact with in relation to these investments is grossly suspect. There is no reason or common sense to his suggestion that he was involved in investment projects worth of millions of dollars without knowing the surnames of the persons he was dealing with. This evidence has no ring of truth.

It does not give rise to reasonable doubt. [ 156 ] A substantial portion of the investment funds were payable to the Tieberts to satisfy the request for funds to pay expenses in relation to the Dynasty Project. Yet the banking records do not disclose any payment to the Tieberts in any amount during the relevant period. Mr. Ellis testified that he couldn’t be sure but he “wanted to say” that he paid the Tieberts from Scotiabank Account he had opened in or about January 2017. However, 100% of the $1.2 million contributed by the Dynasty Project investors was deposited into Mr. Ellis’ accounts at RBC.

The RBC banking records do not show any transfers of any of the $1.2 million to the Scotiabank savings account. Reasonable doubt does not arise in relation to Mr. Ellis’ evidence that he paid the Tieberts monies from the Scotiabank Account. [ 157 ] Mr. Ellis testified that some of the payments to the Tieberts and others were made through unconventional means. For example, he testified to making cash drops, transferring securities from an RBC investment account, paying inflated prices for merchandise at a coin and stamp business at West Edmonton Mall with the difference being passed on to the person to whom Mr.

Ellis was to be paying. These types of payments do not give rise to reasonable doubt because they defy reason and common sense. This is simply not believable and does not give rise to reasonable doubt. Moreover, RBC responded to the Production Order and disclosed a large number of bank accounts, loan accounts, lines of credit, Visa accounts and Mastercard accounts, but there is no reference to the existence of any RBC investment account associated with Mr. Ellis. [ 158 ] Mr. Ellis made bare denials in relation to his involvement with false email accounts and a forged letter from a law firm.

These denials cannot be assessed in isolation and must be considered in the context of the whole of the evidence, which I will review later in these reasons. After conducting that review, I conclude that the bare denials do not give rise to reasonable doubt. [ 159 ] When determining whether reasonable doubt exists, I must also consider other potentially exculpatory evidence. Mr. Makowecki testified that in late 2018 he was told by Mr. Ellis that a banker and Mr. Ellis’s brother were involved in a fraud that in some way related to the Dynasty Project investments. Mr. Ellis told Mr.

Makowecki that the RCMP were investigating and that arrest warrants were being executed. According to Mr. Makowecki, Mr. Ellis also told him that that an RCMP investigator would be contacting him to further the investigation. If it were true that a banker and Mr. Ellis’ brother were engaged in fraudulent activity in relation to the Dynasty Project, then this could potentially give rise to reasonable doubt because Mr. Ellis might himself have been the victim of fraudulent conduct in relation to the Dynasty Project. However, the Agreed Statement of Facts directly contradicts Mr. Ellis’s statement to Mr. Makowecki.

The admitted facts prove that the RCMP were never investigating an alleged fraud involving Mr. Ellis’ brother or an employee of RBC.

This evidence cannot give rise to reasonable doubt. [ 160 ] When I consider the totality of Mr. Ellis’s evidence and other potentially exculpatory evidence, I am not left with reasonable doubt and therefore I would not acquit at the second stage of W(

D) with respect to the counts on the Amended Indictment charging fraud over $5,000, use or trafficking in a forged document or personation. However, as I will later describe, despite not believing Mr. Ellis, I have reasonable doubt with respect to counts 7, 15 and 24. VI. Assessment of the Whole of the Evidence [ 161 ] Even though I have concluded that I do not believe Mr. Ellis and that his evidence does not give rise to reasonable doubt, I cannot simply assume that the evidence tendered by the Crown is true. I must therefore assess the totality of the evidence to determine whether the Crown has met its burden to prove the elements of each of the offences beyond a reasonable doubt.

a) Credibility Assessment of Crown Witnesses [ 162 ] In undertaking this assessment, I need to firstly consider the credibility and reliability of each of the Crown witnesses. [ 163 ] Mr. Makowecki was interviewed by police in March 2019 regarding the allegations against Mr. Ellis. Mr. Makowecki provided police with relevant documents in his possession. Police asked whether he had any additional records that might be relevant, and he responded by saying that he had nothing further. Mr. Makowecki’s statement was not true. At the time of making that statement Mr.

Makowecki had in his possession tape recordings of two discussions he had with Mr. Ellis during the relevant time. After meeting with police, Mr. Makowecki recorded additional discussions that he had with Mr. Ellis. Those recordings were not disclosed to police. [ 164 ] On the morning that Mr. Makowecki was scheduled to testify, he approached the Crown and disclosed the existence of the recordings. This resulted in an adjournment of the trial to permit the Defence to consider the new disclosure and to determine what position would taken in response. When the trial resumed, Mr.

Makowecki explained that he did not disclose the recordings to police because he was concerned that his actions may have been unlawful and that he did not want to make admissions to police. He testified that the recordings were not made to trap Mr. Ellis but instead were made to simply have an accurate record of what was transpiring in the meetings with Mr. Ellis. [ 165 ] The Defence submits that Mr. Makowecki is lacking in credibility because of his untruthful statements to police. This is a factor that must be considered in relation to Mr. Makowecki’s credibility.

The fact that he was prepared to lie to police is a factor that causes me to view his evidence more cautiously. However, much of Mr. Makowecki’s evidence is corroborated by emails, cheques and bank drafts. As a result, while I view Mr. Makowecki’s evidence more cautiously than the other witnesses, I am satisfied that the evidence he gave is credible and reliable. [ 166 ] Kim Mihalcheon is the owner of Barcol and Steelcraft. She testified primarily regarding her dealings with Mr. Ellis and with respect to the Barcol and Steelcraft expense account policies. There was nothing in Ms.

Mihalcheon’s evidence that gave rise to any concerns regarding credibility. I am satisfied that she was attempting to be completely truthful in her evidence. However, there were some concerns regarding the probative value of her evidence in relation to expense claims. Ms. Mihalcheon was responsible for the operations of the business not only in Edmonton but also elsewhere. As a result, she travelled extensively and did not have daily direct contact with Mr. Ellis regarding the operation of Barcol. Nor did she have any direct dealings with Mr. Ellis regarding expense claims.

Her evidence in relation to expense claims described her personal expectations as to the appropriateness of expense claims rather than the policies and practices that had been implemented at Barcol. Her lack of involvement with the Barcol expense claims policies and procedures makes her evidence in relation to Mr. Ellis’ expense claims of little probative value. [ 167 ] The remaining Crown witnesses were honest and testified to the best of their ability regarding events that occurred several years ago. Their credibility was not challenged by the Defence.

The reliability of their evidence was assisted by extensive emails that were exchanged at the time and by copies of cheques, bank drafts and other banking records to demonstrate the amount of the investments and the dates on which the investments were made. The evidence of these witnesses was both credible and reliable.

b) Mr. Ellis’ email Account [ 168 ] Mr. Ellis acknowledged that nellis@***** is an email address that he has used for many years. The records reflect numerous emails to and from this account, some of which are email exchanges with the Tieberts and with each of the investors in the investment projects that are the subject of this litigation. [ 169 ] Mr. Ellis acknowledged sending and receiving many emails through this email account. However, Mr. Ellis denies that he is the author of several emails sent from this email address.

While he had no onus to prove that other persons had been using his email account, he testified that: • his wife had frequent access to his cell phone; • when he was at work, he often left his cell phone on his desk while he attended meetings with other staff; • sometime in 2017 the internet service provider gave his email account to someone else and it took Mr. Ellis six days to get the account back. [ 170 ] I do not believe Mr. Ellis when he testified that some of the emails from the nellis@**** * email account had not been sent by him. The content of the many of the emails which Mr.

Ellis disputes contain information and statements that resulted in additional investment in the projects. All the additional investment funds were deposited directly in Mr. Ellis’s RBC accounts and were used by him for his own purposes including the payment of lines of credit and credit card debt.

[ 171 ] Apart from speculation, there is no basis to conclude that emails sent from the nellis@***** email account were created by anyone other than Mr. Ellis. I find that all the emails sent from this email account were authored and sent by Mr. Ellis.

c) The Dynasty Project [ 172 ] The earliest and largest of the investment opportunities promoted by Mr. Ellis was known as the Dynasty Project. I make the following findings of fact in relation to the Dynasty Project. i. The Investments by Blackburn, McLean and Makowecki [ 173 ] I find that Mr. Ellis separately represented to each of Mr. Blackburn, Mr. McLean and Mr. Makowecki that he and several present or former NHL players, including Mike Bossy, had hired a computer programmer, or coder, to create technology that would provide “live” based software and applications pertaining to professional sports.

This technology was initially created for use in NHL games and was intended to provide, in real time, a way to enhance the experience of hockey fans. [ 174 ] Each of Mr. Blackburn, Mr. McLean and Mr. Makowecki invested in the Dynasty Project, but none were aware that the others were participating. Between February 2016 and August 2018, they collectively paid Mr. Ellis almost $1.2 million specifically with respect to the project. The amounts invested can be summarized as follows: Mr. Blackburn $193,795 Mr. McLean $399,102 Mr. Makowecki $596,409 [ 175 ] Mr.

Blackburn made his first investment of $18,000 in the Dynasty Project on February 6, 2016. Over the next 17 months ending July 2017, Mr. Blackburn made 31 additional investments in the Dynasty Project. The size of those additional investments ranged from a high of $28,127 to a low of $394. Mr. Blackburn made a final investment of $2,310 one year later in August 2018. [ 176 ] Mr. McLean made his first investment of $48,000 in the Dynasty Project on March 10, 2016. Over the next 17 months ending in August 2018, Mr. Blackburn made 29 additional investments in the Dynasty Project.

The size of those additional investments ranged from a high of $28,800 to a low of $5,500. Mr. McLean made one final investment almost a year later in August 2018 in the amount of $8,840. [ 177 ] Mr. Makowecki made his first investment of $76,813 in the Dynasty Project by way of a loan in September 2016. This was later converted to equity. During the period of October 2016 to June 2018, he made 19 additional investments in the Dynasty Project. The size of those additional investments ranged from a high of $48,333 to a low of $5,078. ii. The Tieberts are Fictional Characters [ 178 ] The investments by Mr.

Blackburn, Mr. McLean and Mr. Makowecki in the Dynasty Project shared significant common features. One of those features was that two purported Ontario lawyers, Frank Tiebert and Tom Tiebert, claimed to represent each of the investors by, among other things, negotiating for the sale of the technology to Microsoft and making other arrangements to attempt to facilitate the closing of the transactions. While the lawyers purported to represent Mr. Blackburn, Mr. McLean and Mr. Makowecki, there was virtually no direct contact between them and the lawyers. Instead, almost all communications flowed through Mr.

Ellis. [ 179 ] The one notable exception is that Mr. McLean had a short meeting with Mr. Ellis and with someone holding himself out to be Tom Tiebert at a Starbucks in Edmonton. The meeting was scheduled at a time when it was represented that Mr. Tiebert was passing through Edmonton. It took place at a coffee shop. Mr. Tiebert did not give Mr. McLean his business card or otherwise identify himself. The discussions were general in nature and no specifics were discussed. When viewing that meeting in isolation, it might seem reasonable to conclude that the person Mr. McLean met was Mr. Tiebert.

However, when I consider the totality of the evidence, as I will describe later in these reasons, I cannot find that the person Mr. McLean met was actually Tom Tiebert. [ 180 ] None of Mr. Blackburn, Mr. McLean or Mr. Makowecki had any real information regarding the Tieberts. For example, they did not know which law firm the lawyers were associated with. The investors were never provided with an address for the Tieberts’ law firm. Even when Mr.

McLean travelled to Toronto to attend a scheduled meeting with the Tieberts, he did not have their address but, instead, was to be picked up by a driver at his hotel to attend the meeting. Despite his travel to Toronto specifically for this meeting, it did not take place and Mr. McLean returned home without ever seeing or meeting the Tieberts. [ 181 ] None of the investors had a telephone number with which to contact the Tieberts. [ 182 ] What is also common to each of Mr. Blackburn, Mr. McLean and Mr.

Makowecki is that a significant number of additional investment contributions were required because the Tieberts sought additional funds for various purposes. The requests from the Tieberts came by emails that were sent to Mr. Ellis and then forwarded on to the investors. In the case of Mr. Blackburn, the additional funds were requested by the Tieberts for the purpose of purchasing the interests of other Dynasty Project investors including Mike Bossy and other professional hockey players. It was represented to Mr.

Blackburn that these hockey players had to dispose of their investment in the Dynasty Project because of a potential conflict of interest with the NHL. In addition, Mr. Blackburn’s cash contributions were required to reimburse the Tieberts for fees and costs, Canada Revenue Agency (CRA) expenses, accounting expenses and other expenses “to meet GAAP” (generally accepted accounting principles). In the case of Mr.

McLean, the additional funds were generally for injections into Tiebert’s operating account to fund travel expenses, as well as for other expenses such as “off-set” amounts recommended by an accounting firm, PricewaterhouseCoopers (PWC). In the case of Mr. Makowecki, the additional funds were primarily for purchasing the interests of other investors in the project so that he and Mr. Ellis would each have a 50/50 interest in the project.

[ 183 ] What is also common to each of Mr. Blackburn, Mr. McLean and Mr. Makowecki is that during the time that they were being asked to pay additional funds, the Tieberts were making representations regarding the significantly escalating values of the investments. For example: • In the case of Mr. Blackburn, by late July 2016, the Tieberts represented that the agreed sale price for the technology was $9.1 million, which amount was in their trust account waiting for disbursement. • In the case of Mr. Makowecki, the value of the investment was represented by the Tieberts to be as high as $33 million.

In May 2018 this amount was represented to be held in the trust account of Miller Thomson in Edmonton for the benefit of B&G (Mr. Ellis) and Makow Properties (Mr. Makowecki’s holding company). • In the case of Mr. McLean, the Tieberts represented in an email dated August 10, 2017 that “the guarantee to the Dynasty Group (McLean 50%; Ellis 50%) would be $32.75Billion USD”. [ 184 ] I find that the promise of millions (or billions) of

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