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Investors say millions are missing and a businessman can't be found. How an alleged Ponzi scheme played out – CBC.ca

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A Toronto businessman accused in court filings of being one of two masterminds in a multimillion-dollar COVID-19-related Ponzi scheme can’t be located as angry creditors, their lawyers and shadowy figures with ties to illegal gambling rings try to find him and their money.

Mark E. Cohen, who previously worked in the rental car industry at Toronto’s Pearson International Airport, hasn’t been seen at his North York home since August, according to documents filed with the Ontario Superior Court of Justice. The documents also say that he hasn’t been in contact with investors for months.

While some of those investors have turned to the courts to challenge Cohen, others have taken matters into their own hands, CBC News has learned.

According to a source familiar with the situation, who is not authorized to speak publicly on the matter, some individuals with ties to illegal gambling rings in Woodbridge, north of Toronto, have made late-night visits to the 46-year-old’s former home, and the homes of his family members, making violent threats and demanding to know Cohen’s whereabouts to get their money back. 

Cohen is facing three lawsuits accusing him of convincing investors to help him buy used cars that would be resold at huge profits amid the pandemic-triggered vehicle shortage last year. 

None of the allegations against him or other defendants named in the filings has been proven in court.

Investors were promised returns of as much as 13 per cent a month on their investments. Some handed over more than $5 million before Cohen allegedly disappeared with their money, according to civil court filings. In total, lawyers for the plaintiffs allege Cohen stole more than $12 million.

COVID-19 has triggered supply chain disruptions and shortages, resulting in prices of new and used cars to surge. (Getty Images)

Locating Cohen has proven difficult. 

“I verily believe that Mark Cohen’s whereabouts are presently unknown,” wrote one plaintiff in an affidavit filed in court this past November. “He has refused to disclose his location since August 2021.” 

According to court records, Cohen has changed his phone number and blocked others from calling him. 

Lawyer Justin Anisman represents nine plaintiffs who are suing Cohen. 

“He’s avoiding participation in this lawsuit for whatever reason. He hasn’t fled the country but we haven’t been able to locate him in person,” Anisman said in an interview.

Instead, the court approved lawyers to serve Cohen by email as opposed to in person, which is the usual process.

He has not filed a statement of defence or shown up to a preliminary court proceeding.

Investors suing another businessman

Cohen isn’t the only one being accused of masterminding the used car rental proposal.

Another Toronto businessman, Josh Lieff, is being sued by another set of investors going after both him and Cohen.

Lawyer Robert Karrass is representing those investors.

They allege Lieff acted as the middleman, convincing them Cohen was trustworthy, his business legitimate and accepting the money on Cohen’s behalf without doing due diligence. 

“To date, we have not seen any evidence to suggest that this car scheme was in fact real, but rather that somebody was collecting this money and using it to pay off investors,” Karrass said.

To complicate matters, Lieff is also one of the plaintiffs in the lawsuit filed by Anisman against Cohen.

In a statement to CBC News, Lieff’s defence lawyer, Gary Caplan, said his client denies all allegations made against him.

“Mr. Lieff will defend any claim he’s somehow a mastermind in a Ponzi scheme,” said Caplan. He has not yet filed a statement of defence.

Last spring, Josh Lieff and others texted about ramping up their investments in Cohen’s business, according to affidavits and exhibits filed in court. The plaintiffs allege they were led to believe that in March their money had been used to purchase seven Honda Civics and 13 Toyota Rav 4s. (Submitted by Karrass Law)

Cohen and others began contacting investors to pitch what they said would be a lucrative business venture in the fall of 2020, according to a statement of claim filed last month. 

He and others allegedly promised he would be able to purchase used vehicles from rental companies across Canada. They included Jeeps, Toyota Camrys, Honda Civics and BMW X3s bought at below market value, according to the court documents.

The alleged plan was to resell them to dealerships at significantly higher prices to generate “extraordinary returns on investment,” the statement of claim says. 

“My clients allege Mr. Cohen took advantage of … the well-known fact that the used car market was very profitable around this time period to trick my clients into believing this investment was legitimate,” said Anisman.

They were promised a monthly return ranging between five and 13 per cent and in “typical Ponzi scheme fashion” pressured to keep their money and profits in the business so it would continue to grow, according to the lawsuit. 

In the beginning, investors would get back the promised high returns, which encouraged them to invest more, the statement of claim states. 

Word of the venture spread among Cohen’s associates in the area, including business owners, a lawyer and a dentist and their family members and friends in Richmond Hill, Thornhill and Vaughan, according to motion records filed in court.

One plaintiff said he learned of the opportunity from chatting with Lieff and another dad while watching their kids play basketball outside their school, according to his affidavit. He ended up investing a total of $800,000. 

Court records allege Cohen refunded money to some investors, but many were left empty-handed.

Investors became increasingly frantic trying to track down Cohen and their money this past fall, court documents allege. One plaintiff says Lieff provided a screenshot of text messages he’d sent to Cohen demanding to know what was going on with an order of used cars from Quebec. (Submitted by Karrass Law)

Cohen also allegedly drew in individuals known to be involved with illegal gambling rings in Woodbridge, according to the source.

Assets frozen. Search for millions is on

Meanwhile, the Ontario Superior Court of Justice has temporarily frozen Cohen’s assets and lawyers plan to get further court-ordered access to a trail of bank records in an effort to trace where the money went. 

Court documents allege significant amounts of money were transferred to Cohen personally and to numbered companies he controlled, as well as an investment brokerage.

One plaintiff alleges he discovered bank accounts shown above and associated with Cohen’s car business had been drained around the same time Cohen stopped responding to investors, according to an affidavit filed in court. (Submitted by Karrass Law)

Next month, lawyers for the plaintiffs will ask a court for a so-called Mareva injunction, which if granted would require Cohen to disclose all his assets in Canada and worldwide.

It would also compel Canadian financial institutions to reveal details of his accounts and transactions.  

Toronto lawyer Monique Jilesen, who is not associated with this case but is an expert in civil fraud, said the Mareva injunction is a “powerful legal tool” to trace where and to whom money has been sent within Canada.

If it’s sent offshore, however, she said, “it can be a very tedious, long and expensive process” to recover.

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Bank of Canada prepares for a long fight against inflation – The Globe and Mail

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Governor of the Bank of Canada Tiff Macklem at the Bank of Canada in Ottawa, on Dec. 15, 2021.Justin Tang/The Canadian Press

Canada is on the cusp of a series of rapid interest-rate hikes, with the central bank poised to start raising the cost of borrowing as early as next week, beginning a sustained push to bring high inflation back under control.

After nearly two years of extraordinarily low interest rates, the Bank of Canada has arrived at a pivot point. Consumer prices are rising at the fastest pace in three decades, straining the bank’s credibility as an inflation fighter. Meanwhile, there’s growing evidence that the economy is operating at or near full capacity and no longer needs emergency monetary-policy support.

The central bank’s governing council faces the biggest decision since Governor Tiff Macklem took charge in June, 2020: whether to pull the trigger next Wednesday and start the process of normalizing interest rates; or whether to hold off until March to provide additional stimulus through the Omicron wave of the pandemic.

Bank of Canada rate hikes are coming, but that doesn’t mean a recession will follow

Today’s inflation is a problem the Bank of Canada can’t tackle alone

The last time the central bank raised interest rates was in October, 2018. The coming rate-hike cycle, which will see the cost of borrowing rise steadily over the next two years, is needed to tamp down rising inflation expectations and to start building up an interest-rate buffer before the next downturn. But it will also test the strength of Canada’s economic recovery, as well as the vulnerability of heavily indebted households.

“Private-sector debt is something that the Bank of Canada has to keep an eye on, particularly because the rate hikes that we’ll do in the next two years could affect the rates that people pay in renewing mortgages in 2024 and 2025 that they may have taken out at very low interest rates,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said in an interview.

“And while we’ve put households to a [stress] test to ensure that they will be able to pay those higher rates, it will still put a big squeeze on their spending power,” he said.

Bank of Canada officials said in December that they did not expect to raise the policy rate – which has been held at 0.25 per cent since early in the pandemic – until April at the earliest. Since then, however, they have received a string of data releases showing the strength of the labour-market recovery, a record jump in home prices and a sharp rise in expected inflation and wage growth.

A central-bank survey of businesses, released Monday, found that two-thirds of respondents expect inflation to remain above 3 per cent for the next two years – a potent signal for policy makers. Meanwhile, 80 per cent said they intend to raise wages faster next year compared with last year to attract scarce labour. On Wednesday, Statistics Canada reported that the consumer price index rose 4.8 per cent in December, the fastest annual pace of growth since 1991.

This data pushed a number of analysts to revise their interest-rate forecasts. Economists at Bank of Nova Scotia, National Bank and Laurentian Bank pencilled in a rate hike for Jan. 26. Other private-sector economists expect a March liftoff, although most say a rate hike next week is possible.

Market pricing for overnight index swaps suggests an 83-per-cent chance that the bank moves next week, according to Refinitiv data.

“The bank basically has a free option [to raise rates next week],” National Bank rates strategist Taylor Schleich said. “The economy is screaming that we need interest-rate normalization, and now the banks and the markets are kind of allowing them to do it. So you may as well take it.”

Mr. Macklem has not spoken publicly since mid-December. But he used his last speech to tee up a possible shift in January, noting that inflation was “well above our target, and we are not comfortable with where we are” – strong language for a central banker.

The bank’s latest projection shows the rate of inflation falling to close to 2 per cent by the end of 2022, and bank officials believe that many of the supply chain problems that have been pushing up consumer prices will normalize over the coming year.

At the same time, Mr. Macklem and his team expressed concern in December that higher wage growth and rising inflation expectations could feed into “second-round” price pressures and become baked into higher inflation.

The Bank of Canada is not alone in manoeuvring into place for rate hikes. After spending much of last year arguing that high inflation would be relatively short-lived, central bankers in many advanced economies changed their tune in the final months of 2021. The most significant turn came from the U.S. Federal Reserve, which is dealing with the highest inflation of any advanced economy and strong wage growth.

At its December meeting, the Federal Open Market Committee decided to accelerate the end of its massive asset purchase program. Minutes from the meeting released in early January showed Fed officials expected to raise rates “sooner or at a faster pace than participants had earlier anticipated,” setting up a possible March rate hike.

This change in the Fed’s narrative spurred a sharp repricing in global markets. Fixed-income securities sold off in expectation of rate hikes. Equity markets stumbled, with notable declines in growth stocks that greatly benefit from ultralow interest rates when calculating future cash flows.

“The BoC probably does not look to the Fed for validation and they make decisions based on their policy frameworks and analysis,” Jason Daw, Royal Bank of Canada’s head of North America Rates Strategy, said in an e-mail. “But one area that a hawkish Fed makes it slightly easier for the BoC to raise rates is less appreciation pressure on the Canadian dollar than otherwise.”

It’s taken a long time for the Bank of Canada to get to the point where rate hikes are a possibility. It began shrinking its government bond-buying program, known as quantitative easing, in the fall of 2020, and ended the program in October. It is now in what it calls the “reinvestment” phase, where it’s only buying government bonds to replace maturing assets it already owns.

The central bank’s next move depends largely on whether it wants to wait until after the current COVID-19 lockdowns in Ontario and Quebec are lifted, said Mr. Shenfeld of CIBC. He added that the trajectory of rate hikes over the next few years matters more than whether the bank starts hiking in January or March.

“The exact timing of these rate hikes is important to people doing high-frequency trading. But not of that much importance to where the economy ends up a year or two down the road, which is what the Bank of Canada is really targeting,” he said.

Derek Burleton deputy chief economist at Toronto-Dominion Bank, said he expects the bank to bring its policy rate back up to around 2 per cent over the coming years, although policy makers could move haltingly.

“There may be a bit of probing, they may have to hike a few times, see how it plays out on the economy,” Mr. Burleton said.

“I think one of the questions, and this is more directed at central-bank tightening globally, is whether we go through periods of financial-market turbulence, and that could be a factor that could delay a steady tightening.”

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Evive Nutrition recalling smoothie product because of cyanide poisoning risk – CP24 Toronto's Breaking News

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OTTAWA — Evive Nutrition Inc. is recalling its Immunity Super Functional Smoothie because it contains raw elderberries that may cause cyanide poisoning.

The Canadian Food Inspection Agency says the recall of the product sold online was triggered by consumer complaints, noting there have been reported illnesses associated with the product.

The agency says raw elderberries naturally contain cyanogenic glycosdies, which can release cyanide after being eaten.

It says that while the body can process small amounts of cyanide, larger amounts can result in poisoning and could lead to death.

Symptoms of cyanide poisoning include weakness and confusion, anxiety, restlessness, headache, nausea, difficulty breathing and shortness of breath, loss of consciousness, seizures and cardiac arrest.

The agency says it is conducting a food safety investigation that may lead to the recall of other products.

This report by The Canadian Press was first published Jan. 22, 2022.

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COVID-19 antiviral treatment arrives in Nova Scotia – CBC.ca

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Nova Scotia says 900 treatment packages of the COVID-19 antiviral drug have landed in the province, but plans for prescribing Paxlovid are still being finalized.

The Health and Wellness Department said it is working to make the supply available “as soon as possible,” and details about the distribution of Pfizer’s Paxlovid are still being worked out with stakeholders including Nova Scotia Health.

Earlier this week, Health Canada approved the oral antiviral treatment designed to help the body fight off the virus, reduce symptoms from an infection and shorten the period of illness.

Dr. Lisa Barrett, who treats COVID-19 patients and will prescribe the therapeutic once it starts rolling out, said a plan for distribution could take another few weeks.

But she said the first 900 treatment packages will help 900 people. The drug is taken twice a day for five days. 

Dr. Lisa Barrett is an infectious disease specialist based out of Dalhousie University in Halifax. (CBC)

It will be made available to the most vulnerable, including those who are not fully vaccinated for one reason or another and people over the age of 50 who have a risk factor such as being a transplant or cancer patient. 

“We’re hoping that it’s going to make a difference for the most vulnerable people,” said Barrett in an interview on Thursday.

“This is for people at the highest risk of disease and we don’t want them to have to shield anymore at home.”

Barrett noted the medication is designed to reduce hospitalization and death. The hope is that it will help alleviate pressures on the health-care system, she said.

Recognizing the limitations

She also said the fact that the drug is only trickling into the province at this point does not concern her because it was studied on unvaccinated people who were at high risk with the Delta variant. 

“It’s not clear yet if there is as much of a benefit to preventing hospitalization and death in people who are partly vaccinated, but not fully, against Omicron,” said Barrett.

“I want people to be aware we’re not completely devastated that we don’t have hundreds of thousands of doses of this because we think it’s helpful but not for the whole population.

“It’s good to recognize the limitations of the data and where we sit right now.”

Barrett said those in the vulnerable population group should be tested as soon as possible if they have symptoms and report any positive results to Public Health and their doctor.

Doctors will be able to refer their patients to receive the drug. Those referrals will be reviewed and the patient will be contacted about how to receive the treatment.

She said outbreaks in hospitals and long-term care homes will also be monitored as a way of identifying people at risk who may need the treatment. 

Recent approval of drug ‘great news’

On Monday, Canada’s Chief Public Health Officer Dr. Theresa Tam said Health Canada’s approval was “great news” because Paxlovid could drive down severe outcomes in the current wave and beyond.

Paxlovid combines a new drug developed by Pfizer called nirmatrelvir with an existing antiretroviral drug named ritonavir, a low-dose HIV drug that helps nirmatrelvir remain active in the body longer.

After months of clinical trials, Pfizer reported in November that Paxlovid reduced the risk of hospitalization or death by 89 per cent compared to a placebo in non-hospitalized high-risk adults with COVID-19.

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