Charbonneau Commission hears how criminals took over on-the-level businesses
Published Wednesday, December 4, 2013 2:06PM EST
Last Updated Thursday, December 5, 2013 8:16AM EST
The Charbonneau Commission is investigating how unqualified companies managed to obtain construction contracts in Quebec and the techniques criminals used to take over construction companies, which otherwise belonged to law-abiding citizens.
Witnesses explained Wednesday how companies with valid work permits could be transformed into shell companies, sometimes with devastating results.
Bernard Bellavance owned one such company, named Riche-Lieu, formed after he had declared bankruptcy.
With no employees and no office his company lay dormant for years, because he was busy with other projects -- but it maintained a valid work permit.
Bellavance told the inquiry on Wednesday that an acquaintance, accountant Clement Desrochers and another man named Normand Dubois approached him, asking if he would allow them to use his construction permit because they had contracts and workers, but no permits. Bellavance agreed and was paid for his company's name by Dubois.
“It was a 50-50 deal,” explained Bellavance, who left all responsibilities to his new associates. At first, it appeared everything was going well.
“The bank statements showed transactions. Cheques were being cashed, and taxes were being paid,” he said.
He could see money moving in and out of his company accounts. Bellavance was paid $5,000 for his work, which amounted to signing cheques and documents as the legal owner, but he made no decisions.
It appeared to work well, on the surface, until 2004, when Revenue Quebec noticed irregularities and conducted an audit.
Bellavance said it was at that point he came face to face with the realization he no longer controlled his company.
When he approached Desrochers and Dubois about the audit, he was rebuffed.
“(I was told), ‘Keep quiet and nothing will happen to you and your family,’” he said, testifying that the partners were not paying their taxes.
Bellavance told the inquiry that he was told to shut up for his own safety, and to let Dubois and Desrochers take care of the audit.
The duo ended up leaving him in the lurch, and Bellavance was forced to declare bankruptcy for a second time after being stuck with a $2 million bill.
Desrochers and Dubois were later arrested and charged with fraud by the anti-corruption unit.
Amazingly, Bellavance retained his business licence and has since worked with Desrochers "on occasion" to make ends meet.
On the stand Wednesday afternoon Investigator Guy Desrosiers outlined how Fortier Transfert was bought by Grues Guay, a company with links to biker gangs.
Other practices in the construction industry attracted the attention of investigators, including money would disappear into off-shore bank accounts, the inquiry heard.
The Charbonneau Commission continues Thursday.