Nova Scotia RCMP have ended their criminal investigation into a failed $3-million feta cheese importation business involving the Glooscap First Nation.
The Mounties found no evidence of criminal offences on the part of the band's private-sector partner in the scheme, Ilia Gourmet Inc., of Windsor N.S.
In 2020, the Glooscap First Nation said it discovered financial irregularities by Ilia Gourmet in a business venture to import, process and distribute 25 tonnes of feta cheese from Greece.
Glooscap launched a civil lawsuit claiming fraud and seeking damages.
It also complained to the RCMP, which spent a year looking into the allegations before ending the probe.
"On March 29, 2021, after an extensive investigation, the file was concluded as no criminal offences were identified," RCMP spokesperson Cpl. Chris Marshall said in an emailed statement. The RCMP was responding to a request from CBC News on the status of the case.
Ilia Gourmet lawyer Michael MacKenzie provided this response on behalf of the company:
"Ilia Gourmet Canada and its principals cooperated fully with the RCMP throughout and are pleased with their decision that no wrongdoing was involved on their part as alleged by Glooscap First Nations. They were confident from the beginning in their actions and are now focused on the matter presently before the Supreme Court of Nova Scotia, and in their intent to vigorously defend the allegations made against them," MacKenzie said in a statement to CBC News.
Band stands by position it was a victim
The civil lawsuit launched by Glooscap against former partners in the deal is ongoing. The band said witness examinations to obtain pretrial evidence in the case are slated for this fall.
Glooscap Ventures CEO Michael Peters said Wednesday the band stands by its position.
"We acknowledge the RCMP process and conclusion; we are proceeding with our legal action as we maintain that [Ilia] Gourmet Canada breached their legal obligations owed to Glooscap Ventures," Peters said in a statement to CBC News.
"As we understand, there will be further filings of defence and cross-claim that will be forthcoming as part of the legal administrative process. These are in response to Glooscap Ventures' January 2020 legal claim against Ilia Gourmet Canada, after we identified irregularities in their accounting practices."
Glooscap says over $3 million was under review.
Between 2017 and 2019, the federal government spent over $2 million on the project. ACOA was still owed $907,000 when the deal collapsed in 2019.
Asked if any of that has been repaid back, an ACOA spokesperson said Wednesday it would be "inappropriate" to comment. That was the same response it provided in 2020.
Equipment never materialized
In its lawsuit, Glooscap claimed it was the victim of fraud perpetrated by Ilia Gourmet, which was led by Peter and Dimitri Tsakanikas.
The band said it paid for processing equipment that never materialized and salaries and vehicles it later discovered were employed at other Tsakanikas businesses.
Two other companies and three individuals were also named in the suit, including Claude O'Hara, former vice-president of corporate development at Glooscap Ventures, the band's business development agency.
Defendants deny wrongdoing
Defendants in the case have denied any wrongdoing or harm caused by their actions and disputed some facts claimed by Glooscap.
They said Glooscap officials were aware of spending on the feta business, including the rental of a house and leasing of vehicles.
"At all material times payments were made for salaries of the employees that were being used on a full-time basis by Glooscap Ilia," the defence states.
In a separate defence, Claude O'Hara denied misleading the band when he was working for it.
He said an old lawsuit against Peter Tsakanikas was presented to the band in a background check.
Share of European free-trade quota
In April 2018, the Trudeau government awarded the band a quota under the Canada European Trade Agreement to allow Glooscap to import 25½ tonnes of feta cheese from Greece.
The 300-member band is located in the riding of Kings Hants, which was represented by Scott Brison, who was Nova Scotia's representative in the federal cabinet at the time.
Glooscap lost the quota when the venture failed.
The band says once pretrial discovery examinations conclude it will move to secure court dates for the trial that could occur in 2022 but more likely in 2023.
"We are confident that the legal process ahead will bring this matter to full resolution; we are committed to transparency and accountability," said Peters.
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