It is the turn of the lawyer for the Caisse de depot et placement du Québec to cross-examine the former CEO of Otéra Capital. Alfonso Graceffa had to explain on Wednesday the reasons that led him to meet a man with a criminal past in his office even to receive $ 15,000 in cash, in 2017.
This meeting was part of his efforts to “help his brother”, to whom the sum was owed, he explains. The catch: the individual in question, Jean-Denis Lamontagne, had a criminal record for drug trafficking.
He was also virtually bankrupt. However, it is forbidden for an insolvent person to repay a creditor without going through a trustee or a controller. “It would be a preferential payment,” said Caisse lawyer Mason Poplaw.
He mentioned before the judge a series of emails and reports sent to Graceffa, mentioning his criminal past and his poor financial situation. These messages also suggested that his brother, who had obtained a judgment against Lamontagne to be reimbursed, was threatening to have his spouse and mother questioned in an attempt to recover his debt of $79,043.
Mason Poplaw asked the ex-CEO of Otéra several times if he remembered having seen these documents, which landed in his inbox. “I don’t remember,” repeated Graceffa.
Under pressure, Lamontagne showed up at his office to give him part of the sum, namely $15,000. The former CEO of Otéra assures that he knew nothing of his criminal past and his insolvency.
Mason Poplaw asked him if it had “entered into his mind” to check on Lamontagne before receiving him at the Caisse, if only by reading the reports he had received.
“My brother had a deal,” he replied, before adding, “I didn’t realize he was coming to give me cash!”
“And when he handed you the envelope, why didn’t you refuse it?”
“I gave him a receipt. I had nothing to hide! replied Graceffa.
The ex-strongman of the Caisse in the real estate loan also had to describe the way in which he gradually took control of his brother’s company, Constructions Sainte-Gabrielle (CSG), without ever declaring his interest to the ethics officers. “An oversight,” he said.
Over the years, he became a 50% shareholder and its largest creditor, having loaned the company two million. At the time Graceffa left Otéra, the company still owed him $1.8 million.
He tried to convince the judge that for him, CSG was just an “investment” and that he didn’t make decisions. “He was my brother. It was a one-man show, and it’s a small company. »
Mason Poplaw pointed out to him that he was writing checks for CSG. He even got the power to act in place of his brother, “who was not doing well.”
The ex-CEO of Otéra then assured that he had never used this power. Judge Andres Garin himself then pointed out that his signature appears on a resolution he had seen. “That was a mistake,” Graceffa replied.
Mason Poplaw then addressed the business relationship that the former CEO of Otéra had with Thomas Marcontonio.
This businessman was both a client of Otéra, which granted him financing for his projects, and a supplier of loans for Otéra, as a mortgage broker. He is also an old “business friend” of Graceffa, a partner in his real estate projects and in mortgage financing for more than 25 years.
The Caisse’s lawyer notably mentioned a loan of 2.15 million that Graceffa granted through his partner’s company in 2016. An amount for which Marcantonio had guaranteed.
Mason Poplaw suggested that these multiple layers of relationships with him, through Otera and his own personal business dealings, risked raising “awkward questions” in the audience.
The Caisse’s lawyer pulled an old transaction out of his sleeve to discredit the ex-CEO of Otéra. In 2010, when he was vice-president of credit at Otéra, Graceffa allegedly granted a loan of $50,000 with his money to Louis-Robert Lemire, convicted of insider trading two years earlier by the Decision Bureau and review in securities.
The Fund is trying to demonstrate that Graceffa’s ethical excesses amply justified his dismissal. The ex-CEO of Otéra is suing his former employer for 6.9 million for “wrongful dismissal”.
According to him, the Caisse “threw him under the bus” to clear his reputation, following a five million dollar internal investigation, commissioned after a series of reports by the Journal de Montreal in 2019 on bad governance. at Otera.
In particular, they revealed that a subsidiary of Otéra, the MCAP Financial Corporation, had granted more than $9 million in loans to Graceffa’s personal real estate companies. Otéra had also lent 44 million to the company of his partner Marcantonio.
