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Molson Canada has accused former managers of embezzling millions of dollars in an intricate fraud scheme that allegedly involves bogus salespeople, shell companies, the president of a major pub chain and a pair of married couples.
In documents filed Wednesday in Ontario Superior Court, the brewing giant claimed that former Molson Canada sales director Frank Ivankovic oversaw “a complex scheme to defraud the company of many millions of dollars” that later involved two subordinates.
Ivankovic “deceptively exploited his authority within the company” to approve fraudulent invoices from a pair of shell companies that in turn funneled secret payments to him and his wife Kelly O’Brien-Ivankovic, according to the lawsuit, first reported by the Globe and Mail.
The invoices, some labeled as “event planning,” have drained nearly $9.1 million from Molson Canada’s coffers since 2021, the company, a subsidiary of Chicago-based Molson Coors Beverage Co., said in court papers.
It also alleges that the two shell companies, Letz Go and a numbered company referred to in court documents as 466 Ontario, are controlled by pub chain Firkin Hospitality Group chairman Larry Isaacs and his wife Ellen Bacher.
“Acting through Letz Go and 466 Ontario, Bacher and Isaacs conspired with Ivankovic and received a portion of the proceeds of the fraud,” the statement of claim alleges.
None of the allegations have been proven in court.
A lawyer representing Isaacs and his wife said they rejected the allegations.
“My clients’ position is that the allegations made against them by Molson Coors are without merit and they intend to respond to those allegations in court,” Niklas Holmberg said in an email.
Firkin, a pub franchise with 20 locations in the Toronto area, according to its website, did not respond to questions about Isaacs on Thursday.
Resigned amid internal investigation
Neither Ivankovic, who according to court documents resigned from Molson in October amid an internal investigation, nor his wife could be reached for comment.
The lawsuit claims Ivankovic recruited two former employees in recent years. At least one of them, former account director Michael Conforti, issued false purchase orders linked to the two companies, it claims.
The scheme followed a pattern that allowed them to receive a fixed portion of any given payment, Molson claims.
“For example, Ivankovic received $3,655,779 in 63 payments from Letz Go, each representing 50 per cent of what Letz Go had fraudulently billed Molson Canada,” the lawsuit alleges.
The company claims Ivankovic’s wife had signing authority over a checking account held jointly by the Mississauga, Ont., couple through which they embezzled funds. O’Brien-Ivankovic, a chiropractor with “no known consulting experience,” also incorporated an entity called KO Consulting that acted as “a conduit for the misappropriation of funds from Ivankovic and O’Brien,” the lawsuit states.
The alleged scheme involved text messages and in-person meetings between Ivankovic and Firkin’s Isaacs that revolved around payments, with the two referring to Isaacs’ wife as “boss”:
“The boss says he hasn’t arrived yet”; “Got it: mail it or hand it to them?”; “Getting to know. I always like to get caught up”; “Love it – chat tomorrow and schedule the next meeting when you land.”
Relevant data deleted: complainant
The plaintiff further alleges that Ivankovic and Conforti intentionally deleted or blocked access to data relevant to the investigation.
Molson first realized something might be wrong when the company discovered an email from Ivankovic’s bank asking him to explain the source of deposits exceeding $276,000 from Letz Go and 466 Ontario in a personal account he had with his wife.
On December 28, Ivankovic texted his accountant asking for help with “bullet points” for his response. “The accountant helped Ivankovic with the response to the bank and then told Ivankovic to ‘tell the bank to fuck off,'” the lawsuit states.
Molson found an Excel spreadsheet in his email account that tracked his “fraudulent transactions” with Letz Go and 466 Ontario, the plaintiff alleges.
Ivankovic and his wife received more than $4,279,000 in Molson funds embezzled from the two companies since 2021, according to the documents.
The allegations include fraud, conspiracy, breach of fiduciary duty and unjust enrichment.
Molson Canada is seeking millions of dollars in damages.
