A bank froze the account of a Toronto resident working as an Uber driver under the suspicion that he improperly obtained over $4.5 million in Covid-19 relief meant for businesses.
According to the Globe and Mail, the case, which unfolded in an Ontario court, shined further light onto the abuse of pandemic fiscal programs introduced at the height of Covid-19.
According to Ontario Superior Court Justice Michael Penny’s ruling against the accused, Rabih George Barake tapped into the funding under false and fraudulent pretenses.
As a result, Penny ordered Barake to repay the more than $4.5 million he received from the bank, along with interest and costs, in addition to punitive damages amounting to $1.5 million.
Barake, along with his legal representation, has not responded to requests for comments.
Affected programs include the Canada Emergency Business Account (CEBA) and the Highly Affected Sectors Credit Availability Program (HASCAP).
Barake was granted a total of $4.58 million in funding, court documents show.
The accused is alleged to have used a total of 16 businesses to apply for loans which he then revived with a web presence before successfully being granted the loans.
It’s worth noting that regulators have had difficulties in retrieving Covid-19 funds obtained via fraudulent means, even as federal authorities aggressively pursue repayments under the Canada Emergency Response Benefit (CERB).
In response to Barake’s activities, Scotiabank froze over a dozen of the accused’s accounts in January 2022, and in March 2022, the investment agency Scotia Capital blocked access to $1.3 million in his investment accounts.
Barake then took the bank to court alleging $80 million in damages, citing losses due to the freeze.
However, Justice Penny sided with Scotiabank, finding his applications to the programs to be fraudulent.
It remains unclear what quantity of misappropriated funds have been successfully reclaimed from Barake.
While the Ministry of Finance refused to comment on Barake’s case, a spokesperson for Finance Canada reiterated the federal government’s commitment to preventing fraud and holding ineligible businesses accountable.
“Businesses that ultimately did not meet the eligibility criteria for a CEBA loan have been contacted and are required to repay their loans in full by December, 2023,” spokesperson Caroline Feggans told the Globe and Mail.
