Ontario (Ministry of Finance) v., 2019 ONCJ 547

CITATION: Ontario (Ministry of Finance) v. 1375923 Ontario Inc. , 2019 ONCJ 547 DATE : July 5, 2019 ONTARIO COURT OF JUSTICE BETWEEN: Her Majesty the Queen in Right of Ontario as represented by the Ministry of Finance — and — 1375923 Ontario Inc. o/a Le Jardin Banquet and Conference Centre Inc., aka Le Jardin Special Event Centre Inc., aka Le Jardin Conference and Event Centre Inc., aka 622192 Ontario Ltd. o/a Chateau Le Jardin Conference and Event Venue, aka Chateau Le Jardin Inc., aka Chateau Le Jardin Catering Inc., and Carlo Parentela aka Carmelo Parentela Before Justice of the Peace R. S.

Shousterman Heard on August 20 and September 28, 2015; November 17 – 19, 2015; January 18 – 20, 2016; April 4 and 5, 2016; July 26 – 29, 2016; September 7 and 8, 2016; December 5 – 7, 2016; February 9, 10 and 14, 2017; April 10, 11 and 13, 2017; October 6, 2017; November 3, 2017; December 1, 2017 and February 5, 2018 Reasons for Judgment released on July 5, 2019 D. Ferland..................................................................... Counsel for the Ministry of Finance C. Argiropoulos.........................................................................

Counsel for the Defendants JUSTICE OF THE PEACE SHOUSTERMAN: 1. Introduction 1 Le Jardin operates a banquet hall located at 8440 Highway 27, Woodbridge, Ont. The venue hosts various events such as weddings and corporate functions, all of which attract retail sales tax.

Casual and full time employees are required to work at these events. 2 On October 6, 2010 and October 14, 2010 the Investigations and Inspections Branch of the Ministry of Finance (“the Ministry”) received a referral from the Health Tax Branch and Retail Sales Tax Audit Branch of the Ministry which prompted an investigation into the business affairs of 1375923 Ontario Inc. o/a Le Jardin Banquet and Conference Centre Inc. and Le Jardin Special Event Centre Inc. 3 Over the course of the investigation the Ministry discovered that between January 2007 and July 2012 the venue changed its operating name numerous times, initially operating as Le Jardin Special Event Centre Inc., then becoming Le Jardin Conference and Event Centre Inc. which was incorporated in 2008.

A third change was to Chateau Le Jardin Conference and Event Venue which name was registered to 622912 Ontario Ltd. in May 2011. 4 On September 12, 2012, the Investigations and Inspections Branch of the Ministry executed search warrants at 8440 Highway 27, Woodbridge and at the business premises of Le Jardin’s accountant, Walsh Business and Management Ltd. in Toronto.

Thousands of paper documents and electronic records were seized during the search as well as computers. 5 The Ministry’s review of the documents, electronic records and computers resulted in 1375923 Ontario Inc. o/a Le Jardin Banquet and Conference Centre Inc., also known as Le Jardin Special Event Centre Inc., Le Jardin Conference and Event Centre Inc., 622192 Ontario Ltd. o/a Chateau Le Jardin Conference and Event Venue, Chateau Le Jardin Inc., and Chateau Le Jardin Catering Inc., (collectively referred to as “Le Jardin”) and its director and officer, Carlo Parentela aka Carmelo Parentela, being charged with numerous offences under the Retail Sales Tax Act, R.S.O. 1990, c.

R. 31 (“ RSTA ”) and the Employer Health Tax Act, R.S.O. 1990, c. E. 11 ( “ EHTA ” ). Mara Vanin, the controller of Le Jardin was initially charged however those charges were stayed on December 5, 2016.

6 Mr. Parentela filed a Notice of Intention to File a Division 1 Proposal under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B- 3 (“ BIA ”) on July 31, 2015. 7 622192 Ontario Ltd. filed a Division 1 Proposal under the BIA on or about July 31, 2015. 8 1375923 Ontario Inc. assigned itself into bankruptcy on or about July 31, 2015. 2. The Charges 9 Le Jardin and Mr. Parentela are charged with 69 counts under the EHTA : (

a) Pursuant to s. 32: failing to deliver annual returns x 5, (

b) Pursuant to s. 35: failing to deliver statements and remittances x 63, and (

c) Pursuant to s. 31(5): wilfully evade tax x 1. 10 Le Jardin and Mr. Parentela are charged with 62 counts under the RSTA : (

a) Pursuant to s. 32(4)(d): wilfully evade tax x 1 (

b) Pursuant to s. 32(4)(a): making false or deceptive statements in returns x 28 (

c) Pursuant to s. 13(2): failing to remit tax collected x 1 (

d) Pursuant to s. 44(2): vendor failing to collect sales tax x 1 (

e) Pursuant to s. 41(1): failing to file returns within required time period x 31 11 Le Jardin Conference and Event Centre Inc. and Mr. Parentela are charged with two counts under the RSTA : (

a) Pursuant to s. 5(7): operating without a vendor permit x 1 (

b) Pursuant to s. 32(4)(d): wilfully failing to register as a vendor x 1 3. The Relationship of the Corporations (a) 622192 Ontario Ltd. 12 622192 Ontario Ltd. was incorporated April 25, 1985. Its business address was 8440 Highway 27, Woodbridge. On March 27, 1986 it registered the names Le Jardin De Toronto Restaurant and Up Town Comedy Cabaret. On June 4, 1992 it changed its name to Le Jardin De Toronto. On February 14, 1994 it also registered the name Canadian Soccer Federation. On February 1, 1995 the business name Le Jardin Enterprises was registered.

13 On May 31, 2011 the business name of the corporation was changed to Chateau Le Jardin Conference and Event Venue. 14 622192 Ontario Ltd. registered with the Ministry and was issued vendor permit no. 4561-0991 under the RSTA on May 9, 1985. The vendor permit account was closed February 29, 2000. The reason provided for the closure was that the corporation was no longer operating. 15 622192 Ontario Ltd. registered with the Ministry as an employer under the EHTA on October 26, 1989.

The registration was terminated October 24, 2003. 16 622192 Ontario Ltd. was the only company to hold a liquor licence between May 1, 2007 – June 30, 2010 at 8440 Highway 27, Woodbridge. 17 Mr. Parentela was the sole officer and director of the corporation. (

b) Parentela Holdings Ltd. 18 Parentela Holdings Ltd. was incorporated July 17, 1998. It is the owner of the property located at 8440 Highway 27, Woodbridge. Mr. Parentela was the sole officer and director from December 22, 2009; prior to that his parents Giuseppe and Teresa Parentela were the officers and directors from July 17, 1999 - December 22, 2009 and Mr. Parentela was the treasurer. Mr. Parentela remained treasurer after assuming the roles of sole officer and director on December 22, 2009. (c) 1375923 Ontario Inc. 19 1375923 Ontario Inc. was incorporated September 17, 1999.

It operated under the registered name Le Jardin Banquet and Conference Centre Inc. until December 16, 2004 when it changed its name to Le Jardin Special Event Centre Inc. On July 22, 2010 the corporation changed its name to 1375923 Ontario Inc. 20 The business addresses of 1375923 Ontario Inc., Le Jardin Banquet and Conference Centre Inc., and Le Jardin Special Event Centre Inc., were 8440 Highway 27, Woodbridge. 21 Mr.

Parentela was the sole officer and director of the corporation, its successor Le Jardin Special Event Centre Inc., and that company’s successor (1375923 Ontario Inc.) until September 17, 2010 when Orlando Catala was appointed officer and director. Mr. Parentela was appointed general manager July 13, 2011. 22 The corporation registered with the Ministry and was issued vendor permit no. 9525-8043 under the RSTA on March 17, 2000. The registration ceased June 30, 2010 with the advent of the harmonized sales tax (“HST”). 23 The corporation registered with the Ministry as an employer under the EHTA on July 6, 2005. (

d) Le Jardin Conference and Event Centre Inc. 24 Le Jardin Conference and Event Centre Inc. was incorporated January 15, 2008. Its business address was 8440 Highway 27,

Woodbridge. 25 Le Jardin Conference and Event Centre Inc. did not register with the Ministry and did not have a vendor permit under the RSTA . It did not register with the Ministry as an employer under the EHTA . 26 Mr. Parentela was the sole officer and director of the corporation. 27 On May 27, 2010 the corporation registered the business name Simcha Catering. 28 On June 30, 2010 the corporation registered the business name Preslin Hospitality Linen Services. (

e) Chateau Le Jardin Inc. 29 Chateau Le Jardin Inc. was incorporated December 3, 2010. On June 28, 2011 the corporation changed its name to Chateau Le Jardin Catering Inc. Mr. Parentela was the sole officer and director of the corporations. 30 The business addresses of Chateau Le Jardin Inc. and Chateau Le Jardin Catering Inc. were 8440 Highway 27, Woodbridge. 31 A vendor permit was not required due to the advent of HST. 32 The corporation registered with the Ministry as an employer under the EHTA on November 4, 2014. 4. The Audit (

a) The Evidence of Dawud Azaad Baksh 33 Dawud Azaad Baksh is a Certified General Accountant and a tax auditor employed by the Ministry of Finance. 34 Mr. Baksh testified that in mid-April 2010 he was assigned a file pertaining to an audit of 1375923 Ontario Inc. under the RSTA . 35 On April 17, 2010 Mr. Baksh spoke with Ms. Vanin who identified herself as the corporation’s bookkeeper. Mr. Baksh told Ms. Vanin the corporation had been selected for a Retail Sales Tax (“RST”) audit. Ms. Vanin provided him with the name of Orlando Catala, the general manager. 36 On April 27, 2010 Mr. Baksh spoke with Mr. Catala.

As a result of their conversation Mr. Baksh sent a Request for Records to Mr. Catala dated April 28, 2010 advising the audit would commence May 20, 2010. The audit was postponed because Mr. Catala advised there were no books and records available. 37 On May 20, 2010 a letter was sent to Mr. Parentela advising of the cancellation of the audit at the request of Mr. Catala. A new date was suggested for the audit. The letter advised that if no response was received an estimated assessment under s. 18(2) of the RSTA would be processed.

38 On June 9, 2010, Mr. Baksh and his team lead, Dilip Singh, met with Mr. Catala at the corporation’s business premises at 8440 Highway 27, Woodbridge. They were given a tour of the premises and advised that the records previously requested were with the external accountant, A.J. Sharma, who was out of the country. They were advised the records would be made available July 14, 2010. 39 Mr. Baksh sent a letter to Mr. Parentela advising him of the meeting with Mr. Catala and that the records would be made available July 14, 2010. Mr.

Parentela was advised that he needed to complete and signs letters of delegated authorization for the Ministry to speak with the external accountant. Mr. Parentela did not respond to the letter of June 9, 2010 so Mr. Baksh telephoned Mr. Parentela on June 18 and 23, 2010. Mr. Baksh left voicemails on both those dates advising Mr. Parentela he had not received the written authorization to speak with the external accountant. 40 Mr.

Baksh testified that there had been discussion of conducting a joint audit with the Health Tax Branch and so both branches sent out separate letters to the corporation advising they wished to

schedule a meeting for July 14, 2010. 41 On July 13, 2010 Mr. Catala contacted Mr. Baksh and indicated there was no point in meeting because there were no records. Mr. Catala was told to speak with Mr. Baksh’s team lead, Mr. Singh. Mr. Catala did not speak with Mr. Singh and, as a result, on July 14, 2010, Messrs. Baksh and Singh, as well as Samantha Dorish and her manager Manoj Sharma, attended at 8440 Highway 27, Woodbridge to conduct the joint RST and Employer Health Tax (“EHT”) audits. 42 The parties advised the receptionist they were to meet with Mr.

Catala and the books and records were to be provided so that they could do the audit. The receptionist was not aware of the meeting. She showed the Ministry’s representatives into a boardroom where they waited some 30 – 40 minutes. No one attended the boardroom and the Ministry’s representatives left after providing their business cards to the receptionist and requested that they be provided to Messrs. Catala and Parentela and that they contact the Ministry. The audits did not take place. 43 On July 15, 2010 a letter was sent to Mr.

Parentela advising that representatives of the Ministry had attended the business the previous day and that no one from the corporation was present to meet with them. The letter referenced the earlier June correspondence and advised that as a result of the failure to provide the documentation required for the audit, the Ministry had assessed RST owing from the period August 1, 2006 – June 30, 2010 of $3,790,577.31, inclusive of penalties and interest to July 14, 2010. The letter attached a tax and interest

summary and provided information as to how to object. The letter also advised that if the corporation wished to provide any other information it could do so until August 13, 2010. No response was received and the Ministry processed the estimated assessment. The corporation was notified of same on August 16, 2010. 44 When questioned how the Ministry came up with the almost 3.8 million dollar figure Mr.

Baksh advised that since the corporation did not comply with the request to produce the books and records, the Ministry looked at other information from August 2006 – June 2010 including inter alia: the 2006 financial statement for Le Jardin Special Event Centre Inc. which was the only one filed, information from the Liquor Licence Board relating to purchases, sales reported on the Liquor Licence Board’s system for the audit period, revenue reported on financial statements, information reported on monthly returns and available data up to June 2009 and calculated an error rate of 63%.

The error rate was applied to the amounts reported and tax was estimated on those amounts. No determination was made as to room rental, alcohol sold or food sold. 45 Mr. Baksh admitted that the estimate was high because it is always hoped that upon receiving the Notice of Assessment from the Ministry the taxpayer will provide the missing documentation so that proper figures can be calculated. 46 Mr. Baksh testified he eventually heard from Mr. Parentela. They met at a later date with people from the collections department. (

b) The Evidence of Samantha Dorish 47 Samantha Dorish is a senior field auditor with the Ministry of Finance.

48 Ms. Dorish testified that on June 14, 2010 she was assigned to conduct an EHT audit for Le Jardin Special Event Centre Inc. (1375923 Ontario Inc.) for the period of January 1, 2006 – December 31, 2009. 49 Ms. Dorish and her manager, Manoj Sharma, met with Messrs. Baksh and Singh on June 14, 2010. She was advised that a joint RST and EHT audit would be conducted on July 14, 2010. 50 Ms. Dorish contacted the corporation. She spoke with Ms. Vanin who advised that the external accountant was handling the RST audit. She advised Ms.

Vanin she required an authorization form to be completed for the EHT information so that Ms. Dorish could speak with the accountant. Ms. Dorish faxed the form to Ms. Vanin on June 14, 2010. 51 On July 14, 2010 Ms. Dorish attended 8440 Highway 27, Woodbridge. She noted numerous motor vehicles parked outside the premises. Ms. Dorish was accompanied by Messrs. Sharma, Baksh and Singh. They attended at the reception desk and identified themselves as being from the Ministry. They advised they had an appointment. The receptionist advised no one was there and indicated she would make a telephone call.

The parties were directed to a boardroom where they waited for some time. No one from the corporation attended and so they left after providing their business cards to the receptionist. 52 On July 15, 2010 a letter was sent to Mr. Parentela advising that representatives of the Ministry had attended the premises the previous day and that no one from the corporation was present to meet with them.

The letter referenced the earlier June correspondence and advised that as a result of the failure to provide the documentation required for the audit, the Ministry had assessed EHT owing from the period of January 1, 2006 – December 31, 2009 of $132,003.50. 53 A balance was owed of $67,646.11 and therefore the net balance due and owing after the audit was $199,649.61. 54 Ms. Dorish was asked how the assessment was calculated at $132,003.50. She advised that the assessment was based on the corporate tax returns.

She testified that since the last corporate return filed was for 2006, and since no records had been provided, the assessment was based on information from the RST audit. Ms. Dorish admitted that the statement of account indicates the amount is an estimate and is done to prod the taxpayer into providing the requisite information so that the correct amount can be calculated. 55 Ms. Dorish never received a response to the July 15, 2010 letter. 5.

The Search Briefing 56 As a result of the unsuccessful attempts to conduct both audits, in October 2010, Nicole Burley, a senior forensic accounting investigator with the Ministry of Finance, received referrals regarding EHT and RST pertaining to 1375923 Ontario Inc. 57 Ms. Burley reviewed the audit reports and the assessments including the notices of assessments. She noted the RST referral also referenced another numbered company and Le Jardin Banquet and Conference Centre Inc., and that there were a series of business cards attached to the audit information. 58 Ms.

Burley conducted numerous preliminary searches in which she discovered the following: i. there were numerous related companies operating at 8440 Highway 27, Woodbridge; ii. the companies changed names and at least on one occasion, the name change from Le Jardin Banquet and Conference Centre Inc. to Le Jardin Special Event Centre Inc. was not registered with the Ministry; iii. Mr. Parentela was listed as the sole officer and director of those companies; iv. Le Jardin had filed EHT for 2003, 2004 and 2005. The EHT returns were signed by Mara Vanin. One return was filed in 2006 but

no remittance had been made. The amount owing for EHT for 2006 was $15,000; and v. 1375923 Ontario Inc. was registered as a vendor for the purposes of RST. The corporation had filed returns from March 2003 – January 2007 in a timely fashion. The returns for February 2007 – 2008 were filed in 2008. The corporation continued filing the RST returns, albeit late, until October 2009 when they stopped providing the RST returns. Specifically, no RST returns were filed by Le Jardin for the period October 1, 2009 – June 30, 2010. 59 Ms. Burley searched Ministry of Transportation records and learned the following: i. Mr.

Parentela’s first name “Carlo” did not come up; instead the name “Carmelo” was shown as the first name. The home address was 125 – 5 Marine Parade, Etobicoke. Six motor vehicles were registered: a motorcycle, two vans, a 1984 white Jaguar, a Honda Accord and a Suzuki; ii. nine motor vehicles were registered to Le Jardin Special Event Centre Inc.: a BMW, Mercedes, Lincoln, Audi and Ford. Four of the nine motor vehicles were leased: a Land Rover, another Mercedes, a Ferrari and a Porsche; and iii. Mara Vanin resided at 12 Sheila Court, Rexdale. She owned a 2006 Chevrolet. 60 Ms.

Burley conducted an MPAC search on the Woodbridge address. She discovered the owner of the property was Parentela Holdings Limited. She conducted a corporate search and discovered the company had been registered in 1998. Its head office was located at 8440 Highway 27, Woodbridge. The officer and director was Mr. Parentela. The prior officers and directors were Teresa and Giuseppe Parentela whom Ms. Burley believed to be Mr. Parentela’s parents. They ceased to be officers and directors of the corporation in 2009. 61 Ms. Burley drove by 8440 Highway 27 on October 25, 2011.

She described it as a large two storey building in the shape of a castle with adjacent parking. There was signage on the side of the building indicating where the office was located. There were two signs off Highway 27: Le Jardin Way and Parentela Blvd. 62 Ms. Burley conducted further searches in November 2011. She discovered reference to Chateau Le Jardin Inc. and searched it. She learned that Chateau Le Jardin Inc. was never registered as an employer or vendor. She found a reference to a

schedule prepared by Andrew Walsh of Walsh Business and Tax Management Ltd. aka Walsh Business and Management Ltd. (“Walsh Business and Management Ltd.”). She searched Walsh Business and Management Ltd. and learned that Andrew Walsh is a financial analyst conducting business from 1287 St. Clair Avenue West, Suite 7, Toronto. 63 Ms. Burley contacted Mr. Walsh and they met. During the course of this meeting Mr. Walsh advised he had been hired by Mr.

Parentela to address the assessment issues and to update the tax filings. 64 On September 7, 2012, His Worship Griffith granted the warrants to search 8440 Highway 27, Woodbridge and Walsh Business and Management Ltd. at 1287 St. Clair Avenue West, Unit 7, Toronto. 65 On September 11, 2012, a search briefing was held at the Ministry’s Pickering office. Ms.

Burley, Susan Coates, Dean Leach, Libero Papagni, Stacey Gatti, David Verschurren, Collin Taggart, Scott Timmins, Julia Cautillo, Michael De Andrade, Andrew Van Oosten, Ronald Zimmerling, Randy Korn, Andrew Jourard, Jaswinder Brar and Tim Daley attended the briefing. Ms. Burley advised the members of the search team that they were going to be searching a company called 1375923 Ontario Inc., which was operating as Le Jardin Banquet and Conference Centre Inc. and as Le Jardin Special Event Centre Inc., as well as the offices of the company’s accountants, Walsh Business and Management Ltd.

She advised that the searches pertained to RST for the period of January 1, 2007 – June 30, 2010, and EHT for the period January 1, 2007 – July 31, 2012, as well as business records pertaining to the purchase and sale of alcohol at the premises located at 8440 Highway 27, Woodbridge and the purchase and sale of alcohol by 622192 Ontario Ltd. operating as Le Jardin De Toronto Banquet Hall for the period January 1, 2007 – June 30, 2010. 66 She outlined what the case was about and what the parties were to search for, namely any relevant documentary or electronic evidence that would support the investigation under the RSTA and the EHTA for the time frames mentioned above.

The members of the search team were told to review the search warrants to ensure the dates were correct and their names were spelled correctly on the warrant. Ms. Burley divided the group into teams, with one team searching Le Jardin’s premises and the other searching Walsh Business and Management Ltd. Mr. Brar was assigned the lead on the search of Walsh Business and Management Ltd. Messrs. Korn and Daley were assigned to accompany him. Messrs.

Brar, Korn and Daley were instructed that if their search of Walsh Business and Management Ltd. was finished early enough in the day they were to attend Le Jardin’s premises and assist in the search there.

67 A second search briefing was held the morning of September 12, 2012. Yemisi Beckley and Mary Chaffey attended the second briefing. They were advised by Ms. Burley what the case was about and what they were to search for. They were provided with the search warrants and told to review them to ensure the dates were correct and their names spelled correctly on the warrant. Two York Region police officers met with Ms. Burley and Ms. Coates. The officers were provided with the warrant to search Le Jardin’s premises. 6. The Search (

a) The Evidence of Nicole Burley 68 Nicole Burley is a senior forensic accounting investigator with the Ministry of Finance. She investigates allegations of tax evasion. Ms. Burley was the lead investigator on this matter. 69 Ms. Burley, Susan Coates and the two York Region police officers entered Le Jardin’s premises at 10:09 am on September 12, 2012. They proceeded upstairs. Ms. Burley identified herself to the receptionist, Ashley, and asked if Mr. Parentela was available. She was told he was not in. Ms. Burley asked if Orlando Catala was in and Ashley indicated she did not know who that was. Ms.

Burley asked if Ms. Vanin was available and Ashley pointed to Ms. Vanin’s office. 70 Ms. Burley entered Ms. Vanin’s office. Kathy Szubert was present. Ms. Burley identified herself to Ms. Vanin and served her with the warrant. Ms. Vanin was on the telephone and interrupted her conversation to receive the warrant. She appeared upset. Ms. Szubert contacted Mr. Parentela who indicated he would be attending the premises. 71 Ms. Burley called in the search team. Frank Salerno unlocked the doors. 72 Mr. Parentela arrived between 10:30 – 10:45 am. Ms. Burley showed him the warrant. Mr.

Parentela advised that 1375923 Ontario Inc. was no longer operating at 8440 Highway 27, Woodbridge. He further stated that there were no records on the premises. Ms. Burley cautioned Mr. Parentela who said he understood the caution and wanted to contact his lawyer, Gregory Kanargelidis at Blakes. 73 Ms. Burley testified she spoke with Mr. Kanargelidis. She identified herself to him, advised about the warrant and the nature of the investigation. At Mr. Kanargelidis’ request, she had Mr. Parentela scan him a copy of the warrant. Mr. Kanargelidis told Ms.

Burley that 1375923 Ontario Inc. was no longer operating and the records were not at the Woodbridge premises. 74 Ms. Burley spoke with Mr. Kanargelidis, Paul Schabas and Max Shapiro of Blakes at 11:34 am. They expressed concerns regarding the Ministry viewing items outside the scope of the warrant. They requested the search stop until Mr. Shapiro could attend the premises. Ms. Burley contacted her manager and counsel and the parties agreed that the search would stop for half an hour so that Mr. Parentela’s lawyers could examine the cloned hard drives of the computers. 75 Mr.

Shapiro and Zachary Silver of Blakes arrived at 12:45 pm. Ms. Burley showed them the warrant, took them to where the majority of the search team was situated, and introduced them to Andrew Van Oosten who explained the cloning process to them. Ms. Burley advised Messrs. Shapiro and Silver that she would prepare an inventory of items seized and seek a detention order. Messrs. Shapiro and Silver spoke privately with Mr. Parentela. 76 Ms. Burley testified she assisted Ms. Coates with her search. At 3:21 pm she found a file folder labelled “bank”. It contained bank statements and cancelled cheques.

She seized RST notices from the Ministry, liquor purchase orders, cheques payable to cash, brunch receipts, beer store receipts and staff schedules. She placed those items in an envelope labelled NB1 and then placed that envelope in a box labelled NB1. Ms. Coates placed her envelopes in that box as well.

77 Ms. Burley testified that all boxes were funnelled through her. At 4:40 pm Messrs. Shapiro and Silver started reviewing the boxes containing the items seized. Ms. Burley was present as the contents of each box were reviewed by counsel. 78 Ms. Burley testified eleven boxes of items were seized. Ten of the eleven boxes were secured by Tim Daley in his motor vehicle. One of the eleven boxes was seized from Ms. Vanin’s office. Six hard drives were taken and put into separate evidence bags. The hard drives were secured in a special vault. 79 On September 13, 2012, at the request of Mr. Shapiro, Ms.

Burley emailed the Information to Obtain to Messrs. Shapiro, Kanargelidis and Schabas, as well as to Tony Wong, at Blakes. (

b) The Evidence of Susan Coates 80 Susan Coates is a senior investigator with the Ministry of Finance. 81 Ms. Coates testified that she, along with Ms. Burley and two York Region police officers entered Le Jardin’s premises at approximately 10:08 am on September 12, 2012. Ms. Burley asked the receptionist for Mr. Parentela and was advised he was not in. She asked for someone else in charge and the parties were directed to Mara Vanin’s office. 82 Ms. Burley showed Ms. Vanin the search warrant and explained to her what the parties were going to be searching for. Ms. Vanin was on the telephone.

She appeared to be upset and indicated she had a personal crisis and left. Kathy Szubert was present and also left the office. Ms. Burley notified the rest of the search team that they could enter. 83 Ms. Burley returned to reception and provided the warrant to the receptionist. She requested that office doors be opened and was told that Frank Salerno had keys and could open the doors, which he did. Mr. Parentela arrived at 10:36 am and was shown the search warrant. 84 Mr. Parentela advised that 1375923 Ontario Inc. was no longer operating at 8440 Highway 27, Woodbridge.

He advised he was no longer a director of the company. Ms. Burley cautioned Mr. Parentela, asked him if he understood the caution and he indicated he did. 85 Mr. Parentela stated he wanted to telephone counsel. He spoke with counsel and provided the telephone to Ms. Burley to speak with his counsel. The search warrant was scanned to Blakes at 10:45 am. 86 Ms. Coates was assigned to search the office of Mary Lou Peruzza. She commenced her search at 12:10 pm. At 12:33 pm she was instructed by Ms. Burley to stop the search for a period of thirty minutes as Mr. Parentela’s lawyers were en route. At 12:50 pm Messrs.

Shapiro and Silver arrived. Messrs. Shapiro and Silver evinced concern regarding the cloning of the hard drives. Mr. Van Oosten explained the cloning process to them. 87 The search teams were instructed to resume the search. They were told counsel was going to stay until the search was concluded and that they wanted to review all documents that were being seized. 88 Ms. Coates returned to Ms. Peruzza’s office and completed her search of the desk, filing cabinet and shelving units. She found numerous records but they were outside the period of the search warrant and so she did not seize them. 89 Once done Ms.

Coates was assigned to search a shelf that she described as shelf number three in a cabinet. She seized the following items:

i. cheque stubs for August – December 2008 and January 2009, which she placed in an envelope and labelled; ii. 124 pages of staff schedules, Sunday brunch receipts from January – April 2009, as well as January 2010, and 355 pages of transaction by account reports which she placed in a box and labelled; and iii. receipts from The Beer Store, nine receipts from the LCBO, 25 receipts from wineries and liquor supply companies, a record of employment for Burnilda Bojay for 2008 – 2009, T4s for 2009 for four employees, a letter from the CRA about an audit, a financing statement, financial statements for 2007, RBC statements, Scotiabank statements, Canada Trust statements and line of credit statements, all of which she placed in an envelope and labelled. 90 Ms.

Coates placed her envelopes into Ms. Burley’s box labelled NB1. 91 Ms. Coates testified that counsel opened ten boxes of material that had been seized. They finished their review at 5:16 pm. Once the review was complete, Ms. Coates toured the premises with Messrs. Silver and Parentela to ensure that they were satisfied that the offices were in satisfactory order. She was advised they were. At 5:35 pm the search team removed the ten boxes from the premises. The boxes were provided to Tim Daley to transport back to the Ministry’s office and to be placed in a secure vault. 92 Ms. Coates remained with Ms.

Burley while the computer specialist continued his search. The search of Ms. Vanin’s office was completed by 6:24 pm and another box of seized material was taken. Six hard drives were cloned. Ms. Coates left the premises at 6:45 pm. (

c) The Evidence of Dean Leach 93 Dean Leach is a senior investigator with the Ministry of Finance. 94 Mr. Leach testified he entered Le Jardin’s premises at 10:15 am on September 12, 2012. He was assigned to search the main floor and basement for business records. 95 Mr. Leach went to the basement. He did not find any records in the basement. At 12:40 pm he was told to cease searching because the lawyers for Le Jardin and Mr. Parentela were en route. He was given permission to resume the search at approximately 1:15 pm. He searched the office of Nina Greco and did not find anything relevant.

He then went to search a tan filing cabinet located outside Louis Fernandes’ office. He searched the cabinet from 1:30 pm – 4:30 pm. 96 Mr. Leach described the filing cabinet as consisting of five drawers. The drawers contained a lot of paper. He searched the top drawer of the cabinet. He found documents pertaining to payroll transactions, vendor details, balance sheets, trial balances, income statements, alcohol purchases, two deposit books, sales documents and Ministry of Finance retail sales tax documents. He seized the documents and placed them in an envelope which he labelled DL1. Mr.

Leach placed the envelope in a box with other envelopes. He noted that these other envelopes had other person’s initials on them. 97 At 4:55 pm Mr. Leach provided the box to the lawyers for their review. The lawyers looked at the documents seized and the documents were subsequently returned to the box. (

d) The Evidence of Libero Papagni 98 Libero Papagni was an investigator with the Ministry of Finance until October 2015 when he became a forensic investigator with the Ontario Internal Audit Division.

99 Mr. Papagni testified he was partnered with Mr. Leach for the search. He entered Le Jardin’s premises with Mr. Leach at 10:15 am on September 12, 2012. They did a cursory search of the main floor of the premises and observed a number of locked doors marked “private”. At 10:55 am they performed a cursory search of the lower level of the premises. They did not find anything. 100 At 11:53 am Mr. Papagni was tasked to search the office belonging to Sandro Calcagno.

He found and seized event sales summaries for 2007 and 2008 and placed them in an envelope he labelled LP1. 101 At 12:32 pm he commenced searching the offices of Nina Greco and Gianluca D’Acchille. He did not find anything of significance. 102 At 1:33 pm he commenced searching a grey filing cabinet across from Louis Fernandes’ office and, again, did not find anything of significance. He went on to search a brown and then a black filing cabinet in what he described as storage room three and did not find anything of significance.

He searched a black filing cabinet located outside Carol Franceshinis’ office and, again, did not find anything of significance. 103 At 2:15 pm Mr. Papagni joined Mr. Leach in searching a tan filing cabinet. He searched the third drawer and seized the following documents: i. 2008 staff assignment forms. He placed those documents in an envelope labelled LP2; ii. 2008 invoices from the LCBO, the Beer Store and Vincor Wines. He placed those documents in an envelope labelled LP3; iii. 2008 and 2009 petty cash receipts. The petty cash receipts detailed LCBO purchases and miscellaneous payroll payments.

He placed those documents in an envelope labelled LP4; and iv. Scotiabank statements for part of 2007 and the early part of 2008. He placed those documents in an envelope labelled LP5. 104 Mr. Papagni subsequently placed all of the envelopes in a banker’s box which he labelled LP1. He placed the banker’s box in Tim Daley’s motor vehicle. He also placed Scott Timmins’ box labelled ST1 in Mr. Daley’s motor vehicle. He finished at 5:30 pm and left Le Jardin’s premises at 5:43 pm. (

e) The Evidence of R. Scott Timmins 105 R. Scott Timmins is an investigator with the Ministry of Finance. 106 Mr. Timmins testified that he was partnered with Collin Taggart to search Le Jardin’s premises. At 10:55 am on September 12, 2012 he commenced his search of the storage area belonging to the banquet manager, Massimo Melillo. 107 Mr. Timmins noted there were a number of boxes in the storage area. He seized items from two boxes. The first box was labelled “Café Espresso”. From that box he seized purchase documents and pay stubs. He placed those items in envelopes he labelled STA and STB.

The second box was not labelled. He seized similar documents to those found in the Café Espresso box and placed them in an envelope which he labelled STC. The envelopes were then placed into a banker’s box which he initially labelled banker’s box and then relabelled ST1. 108 At approximately 4 pm Julia Cautillo provided him with a series of envelopes labelled JC1 – 8. He placed the envelopes in the box labelled ST1. He was also provided with two envelopes from David Verschuuren labelled DVA and DVB. Mr. Timmins placed those envelopes in the box labelled ST1. He turned over the box to Ms.

Burley and left at approximately 4:30 pm.

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f) The Evidence of Collin Taggart 109 Collin Taggart is a senior investigator with the Ministry of Finance. 110 Mr. Taggart testified that he was partnered with Scott Timmins to search Le Jardin’s premises on September 12, 2012. He commenced his search of Mr. Melillo’s storage room at approximately 10:59 am and completed the search sometime after 3 pm. 111 He testified that he saw Mr. Parentela arrive, that Ms. Burley showed Mr. Parentela the search warrant and cautioned him. At 12:33 pm he was told to stop his search, which he did. He was told that the reason for the cessation of the search was because Ms.

Burley had been in contact with counsel. He was permitted to resume the search at 1:16 pm. 112 Mr. Taggart searched three bankers’ boxes on the floor of the storage room. He described the storage room as a regular office. Mr. Taggart seized RST statements, beer store invoices, email correspondence, staff assignment sheets, sales invoices, wine invoices and bank statements. He placed the items he had seized in an envelope and initialled it. 113 Mr. Taggart also searched a shelf in the hallway outside Darlene Rodrigues’ office.

He found a spreadsheet, seized it, placed it in an envelope and initialled the envelope. 114 He provided the envelopes to Ms. Burley at approximately 4:30 pm. (

g) The Evidence of Stacey Gatti 115 Stacey Gatti is an investigator with the Ministry of Finance. 116 Ms. Gatti testified she arrived at Le Jardin’s premises at 10:05 am on September 12, 2012. She entered at 10:15 am and was partnered with David Verschurren. 117 Ms. Gatti conducted a cursory search of the premises including the basement and the upstairs office area. She was assigned to search various offices in the upstairs back area. The first office she searched was that of Mr. Melillo. She did not seize anything from Mr. Melillo’s office.

She searched another storage office and, again, did not seize anything. 118 Ms. Gatti commenced searching Mr. Fernandes’ office at 11:44 am. She seized a document titled “Le Jardin Conference Event Centre Finalization Meeting Report” and placed it in an envelope she labelled SGA. 119 Ms. Gatti commenced searching Lori Bernardi’s office at 12:31 pm. She seized contracts for Turville Properties dated June 24, 2012, Wine Ladies and Minute Muffler. She placed these items in an envelope she labelled SGB. 120 Ms. Gatti then started searching a cabinet that the search team had described as Cabinet Number 2.

She seized payroll documents, function

summary reports with balances on them and placed the items in an envelope she labelled SGC. She subsequently seized staff assignment sheets, general ledger print outs, alcohol purchase documents, sales documents and a deposit report, all of which she placed in an envelope she marked SGD. 121 Ms. Gatti then placed all of her envelopes into a box labelled DL1. Prior to leaving Ms. Gatti showed Mr. Parentela’s counsel what she had seized.

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h) The Evidence of David Verschurren 122 David Verschurren is an investigator with the Ministry of Finance. 123 Mr. Verschurren testified he arrived at Le Jardin’s premises at 10:05 am on September 12, 2012. He observed Ms. Burley and Ms. Coates, along with other members of the search team and two York Region police officers enter the premises at 10:08 am. He entered at 10:15 am and was partnered with Ms. Gatti. 124 Mr. Verschurren testified he was introduced to the defendant, Mr. Parentela. Mr. Parentela asked him if it was okay to send a copy of the search warrant to his lawyer and Mr.

Verschurren told him that it was. 125 Mr. Verschurren conducted a cursory search of the basement and the main floor prior to attending the office area upstairs. At 10:52 am he began his search of Mr. Melillo’s office. He discovered a 3 ½ inch diskette that had the word “liquor” written on it. He showed the diskette to the computer experts and was told it was outside the parameters of the search period and so he did not seize it. 126 At 11:02 am Frank Salerno opened a padlock on the middle drawer of Mr. Melillo’s desk. He observed twenty sealed white envelopes with the names of various individuals on each.

The envelopes were semi-transparent and he observed they contained Canadian currency. He opened the envelope marked “Vincent Landolfi” and discovered it contained $495.00 in Canadian currency as well as hourly records for August and September 2012. As this was outside the search period he put the money and records back in the envelope, returned the envelope to the drawer and relocked it using the padlock. 127 Mr. Melillo arrived at 11:18 am. Mr. Melillo identified himself to Mr. Verschurren and Mr. Verschurren told him about opening the envelope. 128 At 11:44 am Mr. Verschurren and Ms.

Gatti attended the office of Louis Fernandes. He seized a list of full and part time server’s names and numbers dated June 20, 2007 and a Le Jardin labour report for the period ending March 13, 2011, and placed them in an envelope he labelled DVA. 129 At 12:31 pm Mr. Verschurren and Ms. Gatti attended the office of Lori Bernardi, the Director of Catering. They did not seize any documents from Ms. Bernardi’s office. 130 At 12:33 pm Ms. Burley instructed Mr. Verschurren to stop the search for approximately one half hour. Ms.

Burley told him he could resume the search at 1:15 pm. 131 At 2:15 pm he was assigned to search part of a beige cabinet outside Mr. Fernandes’ office.

From this cabinet he seized the following documents: i. statements of account dated April 27, 2007 and June 2, 2010; ii. a Ministry of Finance tax statement of accounts for Le Jardin Special Event Centre Inc. dated July 5, 2010; iii. letters from the Ministry of Finance Employer Health Tax Audit dated June 14, 2010; iv. a balance sheet and income statement for Le Jardin Special Event Centre for the year ended January 31, 2007; and v. a series of employee payments in 2010, all of which he placed in an envelope he labelled DVB.

132 At 4:10 pm he transferred the two envelopes to Scott Timmins who placed them into a box labelled ST1. He exited Le Jardin at 5:37 pm, carrying two boxes: one labelled MDA and the other MC1. He transferred the boxes to Tim Daley and left the premises at 5:40 pm. (

i) The Evidence of Julia Cautillo 133 Julia Cautillo is a Chartered Accountant and a Certified Public Accountant. She is a Certified Fraud Examiner. Prior to joining the Ministry of Finance she was employed at Ernst and Yonge as a Forensic Accountant. Ms. Cautillo is the Manager of Forensic Accounting at the Ministry of Finance. 134 Ms. Cautillo testified she was partnered with Mary Chaffey to search Le Jardin’s premises on September 12, 2012. Initially they were assigned to search an office marked S2 Event Planning. They entered the office at 10:31 am. Ms.

Chaffey spoke with a woman who identified herself as Rosemary Parentela, the sister of Carlo Parentela. Ms. Parentela advised the documents and computers in the office related to S2 Event Planning. As that business was not covered by the search warrant, Ms. Cautillo and Ms. Chaffey left the office. 135 Ms. Cautillo was then assigned, with Ms. Chaffey, to search Mr. Parentela’s office. Mr. Parentela arrived at 10:51 am, entered an adjoining office which was labelled Long Valley Productions, and unlocked the door to his office. Ms. Cautillo and Ms. Chaffey entered Mr.

Parentela’s office at 10:52 am and commenced their search. They started with two filing cabinets. Ms. Cautillo searched the cabinet on the right; the one on the left was searched by Ms. Chaffey. 136 Ms. Cautillo testified the cabinet contained a number of folders dated June 20, 2012 – May 20, 2015. She opened the folders and discovered they contained event contracts. She seized the folders labelled June 20, 2012 and July 20, 2012, as well as a price list for food and bar items and room rental. She placed all of the seized items in an envelope she labelled JC1. 137 At 11:28 am Ms.

Cautillo commenced searching a bookcase at the back of the office. She described this bookcase as containing five shelves. From it she seized the following: i. unaudited financial statements for Le Jardin Special Event Centre Inc. for the year ended January 31, 2009; ii. unaudited financial statements for Le Jardin Special Event Centre Inc. for the nine months ending October 31, 2008; and iii. unaudited interim financial statements for Le Jardin Special Events Centre Inc. for the nine months ending October 31, 2008, all of which she placed in envelope JC1. 138 Ms.

Cautillo also searched items on the floor between the bookcase and Mr. Parentela’s desk but she did not seize anything else. She exited Mr. Parentela’s office 12:19 pm and was assigned to search the office of Darlene Rodrigues, the corporate sales consultant. 139 Ms. Cautillo searched Ms. Rodrigues’ desk but did not seize anything. She then started searching a shelving unit where she seized a document titled “Sample Social Menu Revised October 2007” from a black presentation folder labelled “Chateau Le Jardin Conference and Event Venue”. She placed the document in envelope JC1. 140 At 12:39 pm Ms.

Cautillo was advised by Ms. Burley to stop searching. She exited the premises and resumed her search at 1:17 pm. At 1:33 pm she commenced searching a beige filing cabinet outside Louis Fernandes’ office. From this cabinet she seized the following documents:

i. a bundle of cheque stubs for the 2008 calendar year. She placed these items in an envelope she labelled JC2; ii. a bundle of redeemed gift certificates dated February 2007 which she placed in an envelope she labelled JC3; iii. an envelope containing deposit reports, credit card transaction slips and more cheque stubs which she placed in an envelope she labelled JC4; iv. credit card slips for the 2007 calendar year which she placed in an envelope she labelled JC5; v. deposit reports, credit card transaction slips and cheque stubs which she placed in an envelope she labelled JC6; and vi. envelopes containing items similar to those in (

e) above and which she placed in envelopes she labelled JC7 and JC8. 141 Ms. Cautillo gave her envelopes to Mr. Timmins who placed them in his box labelled ST1. 142 At 5:28 pm Ms. Cautillo was instructed by Ms. Burley to search Kathy Szubert’s desk. Ms. Cautillo seized a telephone list with a

schedule and placed it in an envelope she labelled JC9 and a manila folder with an invoice for an event on July 7, 2012. She placed the latter in an envelope she labelled JC10 and then gave both envelopes to Michael De Andrade who placed them in his box labelled MDC. (

j) The Evidence of Mary Chaffey 143 Mary Chaffey is a Certified Fraud Examiner. She is a senior investigator with the Ministry of Finance. 144 Ms. Chaffey testified that she initially attended at S2 Event Planning on September 12, 2012. She spoke with Mr. Parentela’s sister, Rosemary, and determined that it was a separate business. As such, she did not search it. 145 Ms. Chaffey was assigned to search Mr. Parentela’s office. She testified the door was locked and it was not opened until 10:52 am when Mr. Parentela opened it. She met Mr.

Parentela and they spoke about “Last Bride Standing”, a video being shot at Le Jardin. Once inside Mr. Parentela’s office Ms. Chaffey seized event contracts for 2010 and 2011 which she found in the garbage pail behind Mr. Parentela’s desk. She placed the contracts in an envelope she labelled MC1. 146 Ms. Chaffey was then told to stop searching so that Mr. Parentela’s counsel could attend. No one came within the thirty minutes she was told to stand down so after the thirty minutes were up she was instructed by Ms. Burley to continue the search.

She attended Carol Franchisini’s office and again was told to stop searching, which she did. When she resumed the search she seized several contracts dated January 1, 2007 – July 31, 2012. She placed those contracts in a box she labelled MC1. 147 Ms. Chaffey found more contracts for 2011 which she seized and placed in an envelope she labelled MC2. She also found employee schedules and work orders which she seized and placed in an envelope she labelled MC3. 148 Ms. Chaffey then attended the general hall where there were a lot of filing cabinets. She started searching a five drawer cabinet.

She found LCBO documents but they were outside the search parameters so she did not seize them. She found and seized loose cheque stubs dated 2008. She placed them in an envelope she labelled MC4. 149 Ms. Chaffey attended the banquet manager’s storage room where she found EHT remittance forms with a due date of August 15, 2008. She seized the forms as well as a function

summary report dated October 2008, retail sales tax returns, payroll for 2008, a trial balance sheet dated May 31, 2008, LCBO and wine purchases, a deposit book, two banking statements and cheques, all of which she placed in an envelope she labelled MC5. Ms. Chaffey also seized plastic bags with sales and payroll and placed them in an envelope she labelled MC6. 150 Ms. Chaffey then placed all of her envelopes into a box labelled MC1 and transferred custody of her box to Ms. Burley. She then assisted Mr. Parentela’s counsel with reviewing the documents she had seized and answered questions they asked of her. Once counsel

advised her she could leave she assisted Tim Daley in placing the boxes in his motor vehicle. (

k) The Evidence of Michael De Andrade 151 Michael De Andrade is an investigator with the Ministry of Finance. 152 Mr. De Andrade testified he was partnered with Yemisi Beckley. They entered Le Jardin’s premises at 10:16 am on September 12, 2012. Mr. De Andrade was assigned to search the reception area. He searched two storage rooms behind the reception area.

He seized a contact information sheet for Chateau Le Jardin Conference and Event Venue a division of 622192 Ontario Limited, as well as a black folder containing various brochures pertaining to activities conducted by Chateau Le Jardin Conference and Event Venue. He placed these documents in an envelope labelled MD1. 153 Mr. De Andrade testified he searched six offices. He did not seize anything from the first three offices. 154 Mr. De Andrade seized a personalized deposit record book with the initials “LJ” on it. This deposit book covered the period of March 10, 2010 – June 21, 2010.

He also seized two other deposit books and placed all three in an envelope labelled MD2. He then placed both envelopes in a box labelled MDA. 155 At 12:45 pm Ms. Burley advised him to cease the search. He resumed the search at 1:17 pm. He searched an office beside that of Mr. Iozzo as well as that of Michael Puzo, the executive chef and did not seize anything. 156 Mr. De Andrade then moved on to the banquet manager’s storage office. He described the office as containing a lot of bankers boxes.

He seized the following items: i. from a brown bankers box labelled 2009 he seized miscellaneous sales invoices for Le Jardin for 2009 and cheque stubs for the 2009 tax year for Le Jardin Conference and Event Centre Inc. which he placed in an envelope labelled MD3; ii. from a grey plastic crate three RST Statements of Account, one RST Notice of Assessment, a sales invoice indicating it was for event number 22430 and dated December 19, 2008, a deposit report dated July 23, 2007, three white envelopes containing sales information, and two ziploc bags containing sales information which he placed in an envelope labelled MD4. 157 Mr.

De Andrade subsequently placed the envelopes in the box labelled MDA. At 4:32 pm he transferred custody of the box to Ms. Burley. 158 Mr. De Andrade then sat with Mr. Parentela’s counsel as they reviewed the seized contents of boxes labelled MDA and MDB.

Once the review was complete he proceeded to Mara Vanin’s office where he seized the following documents: i. a financial statement for the period ending January 31, 2007 for 1375923 Ontario Inc.; ii. a financial statement for the period ending January 31, 2010 for 1375923 Ontario Inc.; iii. financial statements for the periods ending January 31, 2007, January 31, 2008 and January 31, 2009 for Le Jardin Special Event Centre Inc.; iv. a 2010 T4 return from the CRA; v. a 2009 T4 statement of remuneration paid; vi. a 2007 T4

summary; vii. a sales invoice for 2007;

viii. an interim financial statement for the year ending July 31, 2009; ix. an interim financial statement for the period ending October 31, 2008; x. a financial statement ending January 31, 2007; xi. an EHT prior year’s

summary; xii. an RST Statement of Account for 2007; xiii. four RST Notices of Assessment for 2007; xiv. tax returns for the periods ending January 31, 2009 and January 31, 2010 for 1375923 Ontario Inc.; and xv. a 2008 and 2009 statement of remuneration paid for Le Jardin Special Event Centre Inc., all of which he placed into an envelope labelled MD5. Mr. De Andrade then placed envelope MD5 into a box labelled MDC. He transferred custody of the box to Ms. Burley shortly thereafter. The contents of the box were reviewed by Mr. Parentela’s counsel. (

l) The Evidence of Yemisi Beckley 159 Yemisi Beckley is a Certified General Accountant and an investigator with the Ministry of Finance. 160 Ms. Beckley testified she was paired with Michael De Andrade to conduct the search at Le Jardin’s premises. She entered the building at 10:15 am on September 12, 2012 and was instructed to search the reception area. There were numerous filing cabinets in rooms behind the reception area from which she seized sales brochures and price lists. Ms. Beckley put the items she seized in an envelope she labelled YBA. 161 Ms.

Beckley also searched the credenzas behind the reception desk. She seized price lists for wine and beer and a lunch menu for Indian weddings, all of which she placed in the envelope labelled YBA. 162 Ms. Beckley searched an office beside Mr. Iozzo’s office. This office did not have a name affixed to it. From this office she seized sales reports for Le Jardin Conference Centre and placed them in an envelope she labelled YBB. Ms. Beckley then placed her two envelopes in Mr. De Andrade’s box which he had labelled MDA. 163 Ms. Beckley searched the office of Michael Puzo, the Executive Chef, and seized a function

summary report, work orders and invoices, all of which she placed in an envelope labelled YBC and which, in turn, she placed in box MDA. 164 Ms. Beckley then joined the search of the banquet manager’s storage room. She seized function

summary reports, LCBO invoices and staff lists, all of which she placed in an envelope labelled YBD. She also seized payable invoices and placed them in an enveloped labelled YBE. Ms. Beckley subsequently placed those two envelopes in the box labelled MDA. 165 At 4:55 pm Ms. Beckley attended Ms. Vanin’s office. Ms. Vanin was seated behind her desk. Ms. Vanin identified herself as the controller. Ms. Beckley told Ms. Vanin what she was searching for and Ms. Vanin indicated she should proceed. Ms. Beckley did not have further conversation with Ms. Vanin who remained in the office throughout the search. 166 Ms.

Beckley seized the following items from Ms. Vanin’s office: i. financial statements for Le Jardin Group and Le Jardin Special Event Centre for the period ended January 31, 2010, and function

summary reports, all of which she put in an envelope labelled YBF; ii. a financial statement for January 31, 2011 which she put in an envelope labelled YBG; and

iii. LCBO invoices and Notices of Assessment from the Ministry of Finance, all of which she put in an envelope labelled YBG. 167 Ms. Beckley then placed the envelopes marked YBF, YBG and YBH in a box labelled MDC. (

m) The Evidence of Andrew Jourard 168 Andrew Jourard is a Chartered Accountant and a Certified Public Accountant. Mr. Jourard is a senior forensic accounting investigator with the Ministry of Finance. 169 Mr. Jourard testified he entered Le Jardin’s premises at 10:15 am on September 12, 2012. He was instructed to go upstairs. He did a quick search of the lobby and did not seize anything. He searched the Kosher kitchen and did not seize anything. He was then assigned to search Mr. Parentela’s office. Mr. Jourard and Mr. Parentela had a conversation about an item he found which was outside the search parameters.

He completed his search at 12:13 pm. He did not seize anything from Mr. Parentela’s office. 170 At 12:16 pm he was assigned to search Darlene Rodrigues’ office. At 12:40 pm he was told to stop the search as it was temporarily suspended. He was notified at 1:17 pm that he could resume the search and he did. He seized a report of corporate functions for July 2008 – February 2009, which he placed in an envelope he labelled AJ1. 171 After completing his search of Ms. Rodrigues’ office, Mr. Jourard was assigned to assist in the search of a filing cabinet in the hallway near Mr. Fernandes’ office.

He seized cheque stubs, bank statements, deposit books and payroll reports, all of which he placed in envelopes labelled AJ2 and AJ3. He provided the envelopes to Dean Leach and saw Mr. Leach place them in a box he had labelled DL1. When his work was completed Mr. Jourard carried the boxes labelled CT1 and CT2 to Mr. Daley’s motor vehicle. (

n) The Evidence of Jaswinder Brar 172 Jaswinder Brar is a Certified Public Accountant. He has a diploma in investigative and forensic accounting. Prior to joining the Ministry of Finance, Mr. Brar was a manager at Arthur Anderson. He is a senior investigator with the Ministry of Finance. 173 Mr. Brar testified he participated in the execution of the search warrants at Walsh Business and Management Ltd. and at Le Jardin on September 12, 2012. 174 Mr. Brar arrived at the office of Walsh Business and Management Ltd. at 9:20 am. Randy Korn and Tim Daley arrived shortly thereafter. Mr.

Brar showed them the warrant and had them review it. They entered the office at 10:16 am and met with Andrew Walsh and his assistant, Rojerio Duarte. 175 Mr. Brar served the warrant on Andrew Walsh. He explained to Mr. Walsh what the warrant was for and the various business records being sought. Mr. Brar stated Mr. Walsh was cooperative and professional. He provided the business records sought. The records were not numerous and Mr. Brar believed they would fit into one banker’s box with room left over. 176 Messrs. Brar, Daley and Korn searched the office to ensure there were no other records.

Once satisfied there were no other records, Mr. Brar divided the paper records between himself and Mr. Daley to review as Mr. Korn was involved in reviewing the electronic records. Messrs. Brar, Daley and Korn completed their search of Mr. Walsh’s office at 12:50 pm. 177 Mr. Brar testified he arrived at Le Jardin’s premises at 3:05 pm and was assigned by Ms. Burley to search the banquet manager’s storage office. Mr. Brar searched what he described as a grey crate/big box and seized the following documents:

i. 2007 staff assignment sheets; ii. customer open balance for 2007; iii. employee time cards for 2007; iv. work orders for functions in 2007; v. copies of cancelled cheques for 2007; vi. deposit reports for 2008; vii. invoices for the LCBO and The Beer Store for 2007; viii. brunch reports for 2007; ix. cash and bar reports; x. RBC statements for a few months in 2007; xi. WSIB statements for 2007; and xii. 2007 CRA statements of account, all of which he placed in an envelope he labelled JB1. Mr. Brar then placed the envelope in Mr. Daley’s box labelled TPD2. The box was brought downstairs to Ms. Burley. He later assisted Mr. Daley in bringing the box to Mr. Daley’s motor vehicle. (

o) The Evidence of Tim Daley 178 Tim Daley is an investigator with the Ministry of Finance. 179 Mr. Daley testified he attended at Walsh Business and Management Ltd. with Messrs. Brar and Korn on September 12, 2012. They were introduced to Mr. Walsh and his assistant, Rojerio. 180 There were discussions with Mr. Walsh about the search warrant. Mr. Walsh was polite and cooperative. Rojerio retrieved the business records from the basement. Mr. Daley reviewed the records and seized two files pertaining to 1375923 Ontario Inc. labelled “Year End 2007” and “Year End 2008”.

The files contained tax returns, unaudited financial statements and trial balances. He placed the files in a banker’s box which he labelled TPD1. 181 Mr. Daley then assisted Mr. Brar in searching Mr. Walsh’s office. He seized six files which contained banking information. The first file he described as containing TD Canada Trust Bank statements for Le Jardin Conference and Event Centre Inc. for December 2009 and January 2010. Mr. Daley placed the six files, the documents seized by Mr. Brar and an envelope he received from Mr. Korn labelled RK2 in the box labelled TPD1. 182 Mr.

Daley entered Le Jardin’s premises at 3:15 pm and was instructed to search a room called banquet manager’s storage. He found numerous grey plastic storage boxes. He searched one of the grey storage boxes and seized sales documents, receipts and LCBO store receipts. He placed the seized documents in a banker’s box that he labelled TPD2. Mr. Brar provided him with an envelope and he placed it in the box labelled TPD2. 183 Mr. Daley testified that at 5:10 pm counsel completed their review of Mr. Daley’s boxes. He helped load the boxes into the government vehicles. Mr.

Daley transported the boxes labelled TPD1, TPD2, DL1, NB1, MDA, MDB, CT1, CT2, LP1, MC1 and ST1 to the Ministry’s Pickering offices, where he unloaded them and placed them in the vault.

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p) The Evidence of Randy Korn 184 Mr. Korn is a computer forensic investigator. Prior to joining the Ministry of Finance he was a bankruptcy analyst with the Canada Revenue Agency. He has an MBA. Mr. Korn’s involvement in the matters before the Court took place over a period of nine months, commencing with the pre-search briefing, the searches at Walsh Business and Management Ltd. and then at Le Jardin’s premises, followed up by the computer analysis of the material seized. 185 He attended at Walsh Business and Management Ltd. accompanied by Messrs. Brar and Daley on September 12, 2012. Mr.

Korn testified that Mr. Walsh maintained computerized records for the Le Jardin Group and numbered companies. They were in a folder labelled “Le Jardin Group”. He asked Mr. Walsh if he could copy the folder to the desktop of his computer and Mr. Walsh agreed. Mr. Korn was unable to run the hashing program on Mr. Walsh’s desktop computer so he copied the Le Jardin Group folder to an empty thumb drive. He placed the thumb drive into an evidence bag he labelled RK1 and sealed it. He also printed trial balances, placed those in an envelope he labelled RK2 and provided it to Mr. Daley. 186 Mr.

Korn testified he also attempted a cursory search of Mr. Walsh’s computer so as to ensure he had retrieved all relevant files. He got a “hit” however he determined the information was solicitor client privileged and, as a result, Mr. Korn did not conduct any further searches. 187 Mr. Korn finished his computer search at approximately 12:40 pm. He left Mr. Walsh’s business premises with Messrs. Brar and Daley. They went for lunch and then attended at Le Jardin’s premises. 188 Upon arriving at Le Jardin, Mr. Korn was instructed to search Mr. Melillo’s computer. He opened the computer and began his search.

He found bar records which gave him the grounds to seize the computer. Mr. Korn began cloning the hard drive of Mr. Melillo’s computer using imagery equipment. Mr. Korn seized the original hard drive of Mr. Melillo’s computer and a clone of the hard drive was put in Mr. Melillo’s computer. The hard drive was placed in evidence bag RK3 which Mr. Korn turned over to Andrew Van Oosten. Mr. Parentela later confirmed to Mr. Korn that Mr. Melillo’s computer was operating properly. 189 While Mr. Melillo’s hard drive was being cloned, Mr. Korn was instructed to search Mary Lou Perruzza’s computer.

He did not find anything relevant. (

q) The Evidence of Andrew Van Oosten 190 Andrew Van Oosten is a computer forensic investigator with the Ministry of Finance. 191 Mr. Van Oosten testified he entered Le Jardin’s premises at approximately 10 am on September 12, 2012. He was accompanied by Ms. Burley, Ms. Coates, Ron Zimmerling and two York Region police officers. He testified they secured the premises to ensure no one was attempting to destroy evidence. 192 Mr. Van Oosten searched four computers: Kathy Szubert’s, Darlene Rodrigues’ and the external hard drive of Mara Vanin’s computer.

He did not discover anything that would lead him to seize any of the three computers. On the fourth computer he searched, specifically the one belonging to Mr. Parentela, he found an excel spreadsheet. The spreadsheet was a yearly social sales spreadsheet containing RST information. As a result he seized Mr. Parentela’s computer. He did not print the spreadsheet. 193 At approximately 12:35 pm Mr. Van Oosten was instructed to stop searching as counsel wanted to review the warrant and ask him questions about the forensic search of the computers. He spoke with Mr. Shapiro and explained the forensic process to him.

In a nutshell, the computer forensic investigator copies the hard drive and places a clone into the computer. 194 Mr. Van Oosten cloned the hard drive of Mr. Parentela’s computer. It took over an hour for that process to be completed. He placed the hard drive of Mr. Parentela’s computer in evidence bag EA12195 which he labelled AHV1.

195 Mr. Van Oosten left Le Jardin’s premises at 6:45 pm. He had the hard drive in his possession and secured it in the vault. (

r) The Evidence of Ron Zimmerling 196 Ron Zimmerling is a Certified Public Accountant and a Certified General Accountant. He has had forensic training and conducts forensic examinations and analysis of computers and mobile devices for the Ministry of Finance. 197 Mr. Zimmerling testified he entered Le Jardin’s premises at approximately 10:12 am on September 12, 2012. He spoke with Ms. Szubert who advised that Mara Vanin would have details of the business’ computer system. Ms.

Vanin advised that the information sought pertaining to 1375923 Ontario Inc. was not on site but there were some accounting records on her computer. Mr. Zimmerling also spoke with Mr. Parentela who also advised that information pertaining to 1375923 Ontario Inc. was not on site. 198 Mr. Zimmerling commenced searching Ms. Vanin’s computer at 11:20 am. He described how he went about the process of initially searching and then cloning the hard drive of Ms. Vanin’s computer.

He discovered a Simply Accounting data file titled “LeJardinT42008.sai” and determined that the company was using the Simply Accounting (now known as SAGE) software package to record financial transactions such as payroll, sales, expenses and purchases. He commenced cloning the hard drive of Ms. Vanin’s computer at 12:10 pm. He sealed the hard drive of Ms. Vanin’s computer at 6:22 pm and placed it into evidence bag EA 158847. At 6:42 pm Ms. Vanin advised Mr. Zimmerling that her computer was working properly. 199 While Ms. Vanin’s computer was being cloned Mr. Zimmerling attended Mr. Ambrico’s office.

He commenced examining Mr. Ambrico’s computer at 12:18 pm and found a spreadsheet titled “November 12, 2007”. He discovered a function

summary report for Le Jardin Special Event Centre Inc. inside the spreadsheet. As a result of what he discovered he cloned the hard drive of Mr. Ambrico’s computer and sealed the hard drive in evidence bag EA 158848. At 5:47 pm Mr. Parentela advised Mr. Zimmerling that Mr. Ambrico’s computer was operating properly. 200 Mr. Zimmerling then attended the office of Sandro Calcagno. He shut down Mr. Calcagno’s computer at 1:54 pm and started to examine the hard drive. He discovered a file titled “ifine2007holidayparty.doc” regarding an event that took place November 24, 2007.

As a result of what he found he cloned the hard drive of Mr. Calcagno’s computer. The cloning of the hard drive was completed by 3:41 pm. He sealed the hard drive of Mr. Calcagno’s computer in evidence bag EA 158850. At 4:05 pm Mr. Parentela advised Mr. Zimmerling that Mr. Calcagno’s computer was operating properly. 201 Mr. Zimmerling next attended the office of Louis Fernandes. Mr. Fernandes’ computer was running. He shut it down and started his search. He discovered an excel file titled “labourreportjuly2007.xls”. As a result he cloned the hard drive of Mr.

Fernandes’ computer and sealed the hard drive in evidence bag EA 158849. Mr. Parentela advised Mr. Zimmerling that Mr. Fernandes’ computer was operating properly. 202 The hard drives in their evidence bags were secured in a case, returned to the Ministry’s office and sealed in the vault. 7. Post Search 203 Ms. Burley inventoried the items seized, including where the item had been seized from and the name of the seizing officer. She met with Ms. Vanin and Mr. Walsh and returned some records to them.

She then prepared a Report to Justice and obtained detention orders for the remaining items seized from Le Jardin’s premises as well as for the items seized from Walsh Business and Management Ltd.

204 On September 24, 2012 Ms. Burley sent a letter to Messrs. Parentela, Kanargelidis and Walsh advising of the detention order. She received a response from Mr. Shapiro requesting another week to review the cloned hard drives to search for solicitor client privileged documents. 205 On September 27, 2012 Mr. Korn was instructed to start reviewing the Le Jardin files. He described his task as sorting the documents, not performing any qualitative assessment of them. 206 From September 27 – 29, 2012 Mr. Korn imaged the seized hard drives on to the Ministry’s server.

Once done he placed the seized hard drives in evidence bags and returned them to the secure storage area in the Ministry’s office. 207 On October 19, 2012 Mr. Korn received a copy of a letter addressed to Ms. Burley from Blakes in which claims of solicitor-client privilege and litigation privilege were being made with respect to in excess of one thousand documents. The Ministry was provided with a list of the privileged documents including the computer the document was on and the name of the document. Mr. Korn testified that Blakes had opened up the documents and may have modified them.

As a result the hash values Blakes provided for each document were not the same that the Ministry had. Since the hash values were not the same Mr. Korn searched the privileged documents by taking the list of privileged documents, sorting them using Excel, determining a list for each of the hard drives, and then bookmarking the documents to see whether a claim for privilege was made regarding that specific document or not. If privilege was being claimed over the document Mr. Korn segregated the document and deselected it from those he bookmarked. 208 Privilege was not claimed over the Simply Accounting files.

On November 8, 2012 Mr. Korn utilized a virtualization tool to look at the Simply Accounting files. 209 Mr. Korn testified that other searches were done. For example on November 2, 2012 he searched “SHA”. That search produced over one million results. Mr. Korn stated it was too large to look at. He also searched terms found in some of the paper documents that had been seized. He testified that he received a number of hits in a computer program called Sales Logix. The Sales Logix material was found on the hard drive of Mr. Parentela’s computer. 210 On November 13, 2012 Mr.

Jourard received a CD and some files on a thumb drive from Mr. Korn. He prepared a concordance of the contents of the spreadsheet files and the PDF files for Ms. Burley’s review. 211 On November 20, 2012, Mr. Jourard started working with the Simply Accounting files. He produced various reports in a spreadsheet format including a trial balance, a list of transactions and a detailed transactional report. 212 Ms. Burley requested further detention orders on November 23, 2012, which were granted by His Worship Malik. 213 Ms. Burley then commenced her review of the banking information and invoices seized.

She was subsequently advised by Blakes that privilege was not being claimed on Ms. Vanin’s computer and so the Ministry began its review of the contents of Ms. Vanin’s hard drive. 214 Mr. Korn reviewed all six hard drives as well as the thumb drive taken from Mr. Walsh’s office. In November 2012 he provided Ms. Burley with CDs containing the Simply Accounting files and the Excel files from Ms. Vanin’s hard drive and the thumb drive from the search of Walsh Business and Management Ltd. In February 2013 Mr. Korn provided Ms. Burley with a disc containing the PDFs from the hard drives. 215 In February 2013 Mr.

Korn advised Ms. Burley that he had a spreadsheet from Mr. Parentela’s computer which containing a listing of sales from March 2007 – June 2010. This list contained the event number, name, price, date of event and sales person. From this spreadsheet Ms. Burley identified $32,982,109.54 in sales however based on the invoices she had as well as the information contained in the Simply Accounting software she only found $21,725,200.58 in sales for the same time period. 216 In February 2013 Mr. Korn virtualized Mr. Parentela’s hard drive. Ms. Vanin’s hard drive was also virtualized. Mr. Korn made copies for Ms.

Burley. He made a disc of what was on Mr. Walsh’s thumb drive. He made a disc of the Simply Accounting documents

on Ms. Vanin’s hard drive. 217 In May 2013 Mr. Korn prepared a report for disclosure purposes which combined the information from the CDs and DVDs into one report. This report included the Simply Accounting files from Ms. Vanin’s and Mr. Walsh’s computers, the Excel documents on Ms. Vanin’s computer, the Excel T documents, Word documents, RTF files and the PDFs that were found on the six hard drives and the thumb drive. Mr. Korn provided his report to Ms. Burley. 218 The Simply Accounting files and Excel documents that Mr. Korn found on Ms.

Vanin’s computer hard drive were entered into evidence as Exhibit 17. 219 Mr. Korn introduced Exhibit 19. This DVD contained over 6,000 documents transferred from the hard drives of the computers seized from Le Jardin and consisted of the following: i. 111 Excel documents from Mr. Parentela’s computer including inter alia Event Sales

Summary Reports, Le Jardin Corporate Sales and Social Sales, Accounts Receivables, Function

Summary Reports, Labour Reports and Recordings of employees and remuneration paid in cash; ii. 988 Excel accounting documents from Ms. Vanin’s computer including inter alia trial balances, Labour Reports, bank reconciliations and income statements; iii. 3,250 PDF documents consisting of inter alia quotes, contracts, work orders, invoices, menus and brochures; iv. 2,281 Word documents; and v. a Sales Logix Excel document found on Mr. Parentela’s computer’s hard drive recording sales for the period of February 1997 – November 2012. Mr. Korn testified the documents listed in (iii) – (

v) above were found on different hard drives of the seized computers from Le Jardin. 220 Mr. Jourard testified he also prepared a payroll report for 2009.

He explained how he reviewed the general ledger reports from the Simply Accounting software to summarize payments made to persons the Ministry knew were on payroll and aggregated that payroll information according to the general ledger and compared it to what was reported on the T4s that had been seized. 221 The report listed the name of the individual, the amount as per the T4, the payroll amount, the amount from the general ledger and then compared the difference between gross pay from the T4 and the general ledger.

He found there were differences between the T4s and the general ledger as the amounts in the general ledger were significantly higher than what was produced on the T4s. 222 Mr. Jourard completed the report in April 2013 and provided it to Ms. Burley. 223 On May 16, 2013 Mr. Jourard accompanied Ms. Burley to an interview with Andrew Walsh. The interview took place at Mr. Walsh’s office. 224 On May 14, 2015 Mr. Jourard accompanied Ms. Burley to an interview with Mara Vanin. The interview took place at Ms. Vanin’s home in Etobicoke. Ms. Burley, Ms. Vanin, Ms.

Vanin’s lawyer and her mother were present. 225 On Oct 20, 2015 Mr. Jourard accompanied Ms. Burley to an interview at the CRA office in North York to interview AJ Sharma. 8. The Continuing Evidence of Nicole Burley

226 Ms. Burley testified about the results of her investigation. I have attempted to categorize the different aspects of her testimony by topic. (

a) RST

(1) Document Review 227 Ms. Burley testified that in concluding that Le Jardin had collected $1,743,284.68 in retail sales tax from its customers between the period of May 1, 2007 – June 30, 2010, she reviewed the documents and business records seized pursuant to the search warrants. She concluded that Le Jardin had realized $32,690,162.53 in sales during the relevant time period although Le Jardin reported $13,688,629.32 in total sales to the Ministry of Finance. 228 Ms. Burley testified there were thousands of bills and contracts seized for the period of May 2007 – June 2010.

These documents had been found in, inter alia, the accounting office, the banquet manager’s room, the back hallway and Mr. Parentela’s office. As she indicated, some 53 invoices located in the garbage can in Mr. Parentela’s office were seized by Ms. Chaffey. She noted that every invoice also contained elements of EHT because staff were required to work the event. She testified that in coming to her conclusions she did not count any events that were cancelled. 229 Ms. Burley reviewed every invoice and event contract to determine whether taxes had been paid and collected.

She testified that as she reviewed the docum

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