Canada COVER

On the trail of Eagleson’s money

The fallen czar may have up to $50 million

KIMBERLEY NOBLE January 19 1998
Canada COVER

On the trail of Eagleson’s money

The fallen czar may have up to $50 million

KIMBERLEY NOBLE January 19 1998

On the trail of Eagleson’s money

The fallen czar may have up to $50 million

KIMBERLEY NOBLE

STEVIE CAMERON

Clients he cheated call him a thief and a liar. People for whom he did favors insist he’s the salt of the earth, a fine and upstanding fellow, a good family man and all-around great guy. Somehow overlooked in the past week’s heated debate over Alan Eagleson’s motives and character is the bottom line. Whatever else he might be, Eagleson has always been first and foremost a financial wiz. He was smack in the centre of an enormous web of still-mysterious transactions involving many millions of dollars belonging to the individuals and organizations he managed for more than 20 years. A fair chunk of that money is still not accounted for. There is absolutely no question in the minds of investigators who have tracked his personal finances in recent years that Eagleson has squirrelled away enough of his own and other people’s money to make sure that when he walks out of jail later this year, the one thing that he’ll be for sure is a very rich man.

Exactly how rich may never be known—although estimates range from $5 million to $50 million. Eagleson spent years, and untold amounts of entrepreneurial energy, making, keeping and hiding money. He had a dozen different sources of income: his law firm, a sports agency business, « the hockey players’ union, international hockey tourna| ments, insurance agencies selling disability and other g sports-related policies, real estate, property rentals, directorships, various ventures such as a tailor shop and a car wash, even short-lived flings in boxing promotion and provincial politics. Recent investigations of Eagleson’s business dealings by police, disgruntled clients and journalists have expanded that list by revealing that when push came to shove, he made money from just about everything he touched. He showed a particular flair for enriching himself through the creative use of organizational expense accounts, which enabled him to travel and entertain lavishly without spending a cent of his own salary.

That was not all. The recently updated version of Game Misconduct: Alan Eagleson and the Corruption of Hockey, an exposé by U.S. investigative reporter Russ Conway, reveals additional ways in which Eagleson managed to set up what amounted to a secret, unregulated savings-and-loan organization for the benefit of himself and his business associates. In the 1970s and 1980s, unbeknownst to anybody except a small handful of close business cronies, he collected, pooled and distributed millions of dollars’ worth of player and tournament money. In the cases Conway documents, every time money changed hands, whether it was flowing in or out, a healthy percentage would stick to Eagleson in the form of some sort of fee or commission—be it in cash, kind or a piece of the action.

Eagleson’s remaining allies act as if he will be lucky to get out of jail with a penny to his name. Establishment friends, for example, have been acting as if he is already destitute—lending him a midtown apartment in the months leading up to his court appearances, and talking about fund-raising to help pay legal bills. Eagleson testified in a 1996 trial in an Ontario civil court that he would emerge from his ordeal worth less than $1 million. He wanted to pledge what was to have been a $50,000-a-year (U.S.) National Hockey League Players’ Association pension to help pay the $l-million (Cdn.) fine levied in Boston to compensate victims of his U.S. frauds. Friends also suggested that Eagleson had to cut a deal with U.S. and Canadian prosecutors because he was running out of cash.

The truth is that, for the time being, money is probably the least of Eagleson’s problems. He had no trouble raising enough to pay his U.S. plea-bargain fine. The sale, with interest, of Eagleson’s townhouse in Palm Beach, Fla. (for $224,622 U.S. in 1995) and his apartment in New York City (for $170,250 in late 1997) raised more than half of what he required; his Boston lawyers paid the remaining $268,920 by cheque, a U.S. prosecutor said. After taking that into account—and subtracting the pension payments, to which NHLPA executive director Bob Goodenow says Eagleson is no longer entitled—investigative reporters and ex-clients such as former Toronto Maple Leaf Carl Brewer are still insisting that Eagleson can lay his hands on up to $50 million.

That figure—which popped up frequently in hallway chatter outside both the Boston and Toronto courtrooms last week— dates from research published in Net Worth, a 1991 book about hockey finances by Vancouver writers Alison Griffiths and David Cruise. It was based on what was known about Eagleson’s salaries, commissions, business empire and personal investments at that time. The lower calculations come from Conway. His updated book identifies $4.4 million in liquid assets apparently accumulated by the Eagleson family since the FBI launched its probe of his financial affairs in the early 1990s. Since the revised edition of Conway’s best-seller went to press last month, however, Conway says he has traced another $1 million-plus worth of real estate and other investments to Eagleson, bringing the running total to roughly $5.5 million.

It should be noted that this number only includes what is on the public record, as documented by Conway and other Eagleson researchers. It takes into account the Eagleson family’s reported sales of its stake in major assets, such as the downtown Toronto building that housed Eagleson’s law offices, as well as headquarters for the NHLPA and Hockey Canada during the Eagleson years; three Toronto houses, including the family’s Rosedale home; and various real estate investments in the Ontario resort community of Collingwood, on Georgian Bay, including a roomy waterfront cottage that sold in 1994 for more than $500,000. It does not cover the Eaglesons’ sprawling country house near Collingwood, which Nancy Eagleson acquired from one of her husband’s business associates for $200,000 in 1994. Nor does it include anything that Eagleson—who, according to the statement of fact read into the Ontario court on Jan. 7, has a history of using Swiss bank accounts to avoid Canadian taxes—may have already invested offshore.

Other investigators say that like everything else on the record in the Eagleson story, this is only the tip of the financial iceberg. “Conway’s book, however good it is, only barely scratches the surface,” says one of the people who has seen Eagleson’s books. “This is a labyrinth. It’s like one of those video games in which the doors open, and you go through, and then they slam shut and you don’t know where you are. You cannot tell where real money is changing hands or what is only paper.” Like others in his position, however, he is convinced that Eagleson will leave prison a wealthy man. “I don’t think there’s any question that the assets are there. It’s a question of who’s going to be sharp enough to find them, and under what name.”

Conway’s book provides detailed descriptions of how a number of major Eagleson assets (including the now-notorious office building at 37 Maitland St. in Toronto, where Eagleson, among other fiddles, managed to charge clients and employers rent on 2/2 times the actual number of existing parking spots) have been sold or transferred to Eagleson’s relatives and/or business associates in recent years. Official investigations, however, have raised questions about the possibility that Eagleson remains the beneficial owner. The same is true of a proprietary 76-year lease on a luxurious London flat located near Buckingham Palace. According to Conway, this lease recently changed hands, and now belongs to one of Eagleson’s business pals. The new owner, whose identity is not clear, may even be one of the men who wrote glowing character references for Eagleson at the time of last week’s sentencing. Who actually owns, and who will use, the flat is far from clear, especially since the Eagleson family is reported to be making arrangements to relocate to England as soon as they are all free to leave Canada. “The United Kingdom is a big country,” the unnamed investigator said. “It’s a good place to invest, a nice place to start over.” Even though the criminal charges involved relatively small amounts of money, compared with the overall scope of Eagleson’s documented activities, it is still possible that they could set off a chain of events that could eventually show the world what the man is worth. The fraud conviction should improve the chances of a growing number of self-proclaimed Eagleson victims who are seeking financial redress through the U.S. and Canadian civil courts. If they succeed, they will become instant creditors, able to follow in the footsteps of Mike Gillis, the former Boston Bruinturned-lawyer and player agent to whom Eagleson owes $570,000, following an ugly two-year Ontario court battle over fraudulent fees. Gillis, who has yet to see a penny of his judgment, is precluded from going after any of Eagleson’s assets while an appeal of this award is pending. What Gillis does have is a court-awarded right to ask financial questions, as soon as his lawyer is able to schedule a fact-finding session with Eagleson—who was supposed to provide this information last Wednesday morning, but was able to skip this date with his creditors due to a more pressing engagement in a criminal court.