Sudbury

Crown says Atlas Copco accused fraudster claimed ill-gotten millions on his taxes

The Crown prosecutor in the $24 million Atlas Copco fraud trial told the jury this morning that, while witnesses might lie, numbers do not.

Crown says frauds often end because 'offenders get greedy and don't know when to stop'

It's alleged a $24 million fraud scheme was run by employees at Atlas Copco's Sudbury office in the Walden Industrial Park. (Erik White/CBC)

The Crown prosecutor in the $24 million Atlas Copco fraud trial told the jury this morning that while witnesses might lie, numbers do not.

Over the last two days Paul Caron, the Montreal insurance broker representing himself, and Ralph Steinberg, the lawyer for former Sudbury office manager Dirk Plate, have argued that the Crown's key witnesses are "shady", self-serving and not to be believed, especially Leo Caron and David Hillier, the two former Atlas Copco employees who have already admitted to stealing millions from the mining supply company.

Income discrepancies

But Assistant Crown Attorney Philip Zylberberg urged the jury on Wednesday to focus less on the witness testimony and more on the thousands of pages of financial records presented to the court.

He says the documents show how Atlas Copco was over billed for employee benefits between 2001 and 2007, how four co-conspirators personally profited and how it began to unravel when two of them moved to new positions in the company and when the amount being stolen started to climb.

"That's often how frauds get found out," Zylberberg told the court. "The offenders get greedy and don't know when to stop."

Assistant Crown Attorney Philip Zylberberg told a Sudbury jury that a Montreal insurance broker's tax filings show he made $13 millio between 2004 and 2007, when his only source of income was his contract work for Atlas Copco.

'No room for honest error'

The prosecutor went through documents that he says show that Paul Caron sent Atlas Copco bills for $32 million in employee health benefits, where the actual costs were closer to $7 million.

Zylberberg also detailed how between 2004 and 2007 Paul Caron claimed his taxable income as $13 million, when his "sole source of income" was the work he did for Atlas Copco, which he claimed at other times paid him about $53,000 a year.

"That seems like a very large gift to Revenue Canada," Zylberberg told the court, adding that those tax filings in themselves are an admission of guilt.

During his closing arguments on Monday Paul Caron gave a handout to the jury containing what Zylberberg described as a "new set of calculations" that "appears to have no founding in the evidence at all."

Paul Caron also told the jury to not feel bad for the company, since it will recover all its lost money through an insurance claim, which Zylberberg said was true but  "entirely immaterial. It does not excuse his actions."

'Criminal enterprise'

Zylberberg told how the scheme unraveled in 2007 when Hillier and Plate left the Sudbury office for other positions in Atlas Copco and how their replacements started asking questions, eventually leading to Paul Caron being fired as the company's insurance broker. Under the new provider, the annual benefits costs dropped by about $10 million.

​He said that Paul Caron did provide some hand-written notes to Atlas Copco executives to explain the missing money but "they are so far off the truth there is no room for honest error."

Plate's lawyer Ralph Steinberg told the jury that Leo Caron and David Hillier gained nothing by inviting Plate into their "criminal enterprise," but Zylberberg argued that it was better to have him on board so he would not "question employee benefit costs no matter how high it got."

Zylberberg also focused what he called a "very powerful piece of evidence": three cheques totaling  $98,000 that Paul Caron's company paid to Plate in 2001

The prosecutor said they don't know for sure what the cheques were for, which leaves some doubt. He says the jury may also have doubts about the testimony of Hillier and Leo Caron when it comes to Plate's involvement, "but it's much harder to doubt them as a group."

This is day 41 of the trial, but it will be at least a few more before the jury heads into sequester to come up with a verdict. ​

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