Court extends rare order to freeze up to $20M in crypto, cash donations to 'Freedom Convoy'
Injunction issued by Ontario Superior Court judge now runs until at least March 9
An Ontario Superior Court judge has extended a rare injunction that has frozen millions of dollars in cryptocurrencies and other financial donations to the so-called Freedom Convoy.
The Mareva injunction was issued on Feb. 17 by Justice Calum MacLeod. Law firm Lenczner Slaght brought this motion forward, acting for Champ & Associates, the law firm representing Ottawa residents in a proposed class-action lawsuit against convoy leaders and protesters.
On Monday, MacLeod extended the order until March 9 to give defendants more time to consult with their lawyer.
The injunction — restricting convoy leaders and its fundraisers from "selling, removing, dissipating, alienating, transferring, assigning" up to $20 million in assets raised around the world — stemmed from the proposed class-action lawsuit led by Ottawa public servant Zexi Li.
The lawsuit also includes Union Local 613 and local business Happy Goat Coffee, plus server Geoffrey Devaney, as plaintiffs. The class-action also brought about another injunction that helped silence incessant horn honking as hundreds of truckers and protesters poured into the nation's capital in late January, disrupting the lives of many downtown Ottawa residents.
The Mareva order freezes particular funds from its respondents: organizers Patrick King, Tamara Lich, Christopher Garrah, Nicholas St. Louis and Benjamin Dichter, alongside the non-profit Freedom 2022 Human Rights and Freedoms.
It orders respondents to provide a sworn statement within seven days that describes all assets (including cryptocurrencies) they received globally, associated with and intended to fund the convoy protests in or around Ottawa.
The order also targets banks, financial businesses, fundraising and cryptocurrency platforms, or those who manage cryptocurrency wallets, to freeze those assets — entities such as TD Canada Trust, Adopt-a-Trucker, GoFundMe Inc., Bull Bitcoin and TallyCoin, among others. This is to ensure that organizers can't redistribute those funds to keep them out of the court's reach.
In an emailed response on Monday, law firm Lenczner Slaght said none of the respondents have provided asset statements to this point.
"Whether or not they have to provide them will be decided at our next attendance on March 9," a spokesperson said.
Order is 1st of its kind, lawyer says
The order aims to potentially redistribute the donations to residents, businesses and employees of downtown Ottawa covered by the class-action lawsuit.
"It is not about stopping the Freedom Convoy from fundraising; it's about protecting assets so that class members who have been recovered can hopefully get some compensation," according to a document from Lenczner Slaght.
Justice MacLeod also said Monday the order has to do with civil damages and has "nothing to do with any criminal proceeding that may be ongoing." There are several ongoing criminal investigations related to the convoy protests.
The Mareva order is also separate from the order to freeze protesters' bank accounts, which was part of the federal Emergencies Act.
"This lawsuit is an entirely different animal," MacLeod said.
Lawyer Paul Champ said the order on convoy leaders is a "first of its kind" in Canada to freeze cryptocurrency and bitcoin. He added that Monday's hearing was a success.
"We were able to get some of the defendants to transfer all the bitcoin and cryptocurrency that was in their control to an independent escrow agent," he said.
"It was a great first step for us ... hopefully [for] compensation for the people and businesses and workers [in] downtown Ottawa."
Crypto, cash to be transferred to 3rd party
The order was extended for another 10 days to give the defendants' lawyer more time to consult with Lich, to get more information from respondents and institutions and to see if the respondents want to fight the order, Champ said.
Lawyer Norman Groot, who's representing all respondents except King, said three of the defendants have agreed to transfer their assets to a third-party account: Dichter, St. Louis and Garrah. Groot said he has not been able to get in touch with Lich, who was arrested on Feb. 17 and later denied bail.
That escrow account, which will be managed by Bobby Kofman with KSV Advisory, will hold those assets until further orders from the court.
Groot said he's not aware if Garrah has cryptocurrencies but confirmed he has cash donations in a designated bank account.
"Mr. St. Louis and Mr. Dichter are willing to co-operate, do whatever is necessary to transfer any crypto that they may control to the escrow," Groot said during Monday's hearing.
"I have not been able to confirm that may be able to satisfy all the crypto that was donated, but this is why I'm proposing we come back at a relatively soon date to update the court."
Lenczner Slaght told CBC News that it believes total crypto assets held by Dichter and St. Louis are worth about $1 million. Some of those assets "have since been moved to other cryptocurrency wallets, some of which have been claimed by truckers," its spokesperson said.
Champ estimates about $290,000 or more will be transferred within the next few days to the escrow account in the form of bitcoin and cryptocurrencies, as well as a "significant" amount of cash from Garrah's bank account.
The court still hopes to receive about $10 million of GiveSendGo funds in the escrow account, as well as another $1 million of the GoFundMe funds that "Ms. Lich had in her personal account," among others, Champ said.
A Mareva injunction is a powerful legal tool that was recently used to freeze hundreds of millions of dollars in worldwide assets of a former Saudi spymaster living in Toronto, as well as the assets of a Nova Scotia contractor who allegedly defrauded the Halifax Regional Municipality and an Ontario couple of more than $130,000.With files from Rachelle Elsiufi