People I have to say I’ve been silent about League not because I don’t have anything to say but because I just want to rent and manage new condos and not be bothered with the fucking cesspit of League. Every single time I think the latest update is the worst I end up discovering another layer of filthy psychopathy.
Screwing Over Past Employees
I now know of three higher up past employees that were constructively dismissed after asking questions. But there ended up being allegations of sexual harassment. So basically the CEO or Sales Manager would ask why they were using investor money to fund payroll or bills and the next day there would be allegations. This happened.
Then after that in one case at least Manny “Ethics” Arruda went online smearing the reputations of said persons under pseudonyms (fake names).
Cease Trade Orders
Back in 2007 there was 4 total cease trade orders I know about (there may be more) and during the time that there was cease trade orders, League collected checks and money and it was selling as usual, except those check got stockpiled and cashed once the CTO was lifted.
Investors may or may not have been told about the Cease Trade Orders.
This was revealed during court room testimony by Adam Gant and a copy of his testimony was given to the BCSC. It’s positively shocking.
7 776 Q And did the CTOs have any impact on the business of
9 A Yes. Yeah.
10 777 Q What impact?
11 A Well, not so much in Citizen or IGW Property’s
12 case, but in the REIT’s case, you know, we were in
13 the process of raising capital for some
14 transactions, and so we had to delay the
15 transactions until the cease trade was lifted.
This information was given to the BCSC and they did nothing.
Using Investor Funds For Payroll and Payables
This is Adam Gant’s own testimony verbatim as per court transcripts.
4 891 Q And my understanding is — obviously from my
5 client — that there were intense discussions on
6 how on earth the payroll would be met, for example,
7 given the small amount of cash and the state of the
8 payables. Have you been informed that there were
9 such discussions?
10 A Yes. Yeah, I remember there being some.
11 892 Q And at the time — do you understand now at the
12 time, that is, January and the first days of
13 February, there was not sufficient cash to meet the
14 payroll or deal with those payables?
15 A Sorry. What are you asking me? Was there cash?
16 893 Q Yes.
17 A I think we needed to — to get outside funding that
18 month. We had to inject more shareholders’ loans
19 into the company that month. So, no, there wasn’t
20 enough that month.
21 894 Q And did you tell my client that there was or was
22 not money to fund the payables and the payroll in
24 A I believe I told him that — I think I told him not
25 to worry about it. I w
1 I remember at the time hoping that they would find
2 a solution while I was away. I knew that if they
3 didn’t, when I got back, we would take care of it.
4 895 Q How did you?
5 A We put more capital into the company for the
7 896 Q Who is “we”?
8 A Myself and Emanuel.
9 897 Q Did you tell my client before the two of you did
10 that that there was 5 million in Mr. Reed’s trust
11 account to cover the payables and payroll and other
12 ongoing needs for money?
13 A January 2008 . . . I’d have to look at the trust
14 report to find out exactly how much cash was
15 sitting in the account at the time. But up to that
16 point, we were carrying usually a million or two in
17 trust funds.
18 898 Q I didn’t ask you that. Whatever was there, did you
19 tell my client, Hans, there is $5 million — or
20 words to the effect — Hans, there’s 5 million with
21 Keith Reed; don’t worry?
22 A I could have, yeah.
23 899 Q Is that true?
24 A Well, I’m sure I told him that there was money in
25 the trust fund because there was for payables for
1 the — the real estate entities.
2 900 Q Well, did — did you tell him the truth?
3 A Yes. Yeah.
4 901 Q So if you said 5 million, there was 5 million?
5 A Whatever number I told him there was at the time.
6 Like, the number that there was, I can get that for
8 902 Q I’m instructed that you, very shortly after telling
9 him there was 5 million, said there was 3 million.
10 A Okay. I –
11 903 Q Do you recall that?
12 A Again, I can’t recall the specific numbers, but it
13 was another one of the times where I said, Please
14 call Keith directly if you’d like to confirm the
15 number from — for yourself.
16 904 Q Do you recall giving him different numbers, like
17 significantly different numbers?
18 A If it was a — well, if it was — if it was while I
19 was away, I could have then checked and just
20 updated myself as to exactly how much there was, so
22 905 Q Did you tell him around the time of these
23 discussions that you wanted to teach Manny a
25 A Yes.
1 906 Q And what was that about?
2 A Well, like I said, I had hoped that they could find
3 a solution without me that week while I was away.
4 907 Q So what was the lesson that you wanted Manny to be
6 A Well, I just was hoping they’d come up with a
7 solution without me.
8 908 Q So in other words, did you mean by that that you
9 wanted Manny to figure out how to do it without
10 bothering you?
11 A Yeah, exactly. I just hoped that they could either
12 find a financing source that, you know, didn’t
13 involve me going out and — and doing it myself or
14 find a solution to it in the short term to, you
15 know, fulfill themselves.
16 909 Q And did you say words to the following effect to my
17 client around this time frame and about these
18 discussions about finances that, The accounting
19 girls are idiots; they don’t know how to move money
20 from A to B?
21 A I hope I didn’t use that term.
22 910 Q I’m not suggesting you’d be indicted for that if
23 you did so, sir. Did you use words to that effect
24 and say basically that?
25 A Possibly.
1 911 Q And what would you have meant by that? That there
2 was money available for them if they just moved it?
3 A Well, the funds — any funds in trust for the
4 entity can be moved up into our account for the
5 entity, and if they hadn’t done that, typically,
6 when I get back, I typically — you know, I’ll do
7 the cash flow projection and — and move the
8 capital from trust as we need it.
9 912 Q Sorry. “For the entity,” you mean the assets?
10 A The REIT or the — the LP for the specific project.
11 913 Q So do you mean monies invested for those could be
12 used to deal with payables and payroll of League?
13 A Yeah. I mean, if we’re — if we’re investing in a
14 project, subscription funds prior to that time had
15 typically flowed into Keith Reed’s bank account.
16 He would hold them until after the decision period,
17 and then once they were effectively released, we
18 could then use them to go and buy an asset or
19 invest into upgrading an asset or for whatever
20 particular — you know, it was just a whole — it
21 was one place or another where the cash was held.
22 So if we needed capital for, you know, some
23 invoices that we required, we transferred from
24 Keith’s account to our account. If we were going
25 to close a property and we’d raised some money but
1 had some in our account, we’d transfer from our
2 account to Keith’s account, so . . .
3 914 Q I’m not sure I follow, so let’s — let me ask you a
4 question or two on this. So if people sent money
5 in for subscriptions –
6 A Yeah.
7 915 Q — and were held for the period properly by
8 Mr. Reed –
9 A Yeah.
10 916 Q — after that period expired, did you understand
11 you could use those monies for payables of League
12 including payroll of League?
13 A We’re not talking –
14 MS. McNEIL: Just before you –
15 A — about the defendant.
16 MS. McNEIL: — before you answer –
17 A We’re talking about the entities.
18 THE WITNESS: Sorry. Yeah.
19 MS. McNEIL: — the question — sorry. Again, I just want
20 to ask you, Mr. Main, because you seem to be fairly
21 far-reaching here, how this relates to matters
22 raised in the pleadings.
23 MR. MAIN: I think it’s raised in the pleadings or at
24 least by allusion, and let me think aloud further.
25 My client, as I’m asking yours about, was disturbed
1 about or expressed concerns about some of the
2 aspects of operation of the business, and that
3 might be related to what led to his alleged
4 constructive dismissal.
And that is Adam Gant under oath testifying in a court of law about playing fast and loose with investor money. This court proceeding occurred in 2009 but the events occurred in 2007.