Last fall’s sale of the undeveloped land around the Monterra golf course below Ontario’s Blue Mountain is, by any standards, a peculiar financial arrangement.
The fact that it involves a healthy chunk of disgraced hockey czar Alan Eagleson’s personal fortune makes it all the more fascinating.
The sale of the Collingwood, Ont., recreational property has almost as many twists and turns as the 18-hole course itself. However convoluted, this deal is only one of dozens more that appear to be paving the way for Eagleson’s prosperous post-prison retirement. Since the FBI announced in December, 1991, that it was investigating Eagleson and his business associates, this group has liquidated or hidden more than $16 million. Of that, half can be directly traced to Eagleson, now serving an 18-month term in the suburban Toronto Mimico Correctional Centre after pleading guilty in January to fraud and theft charges in Canada and the United States.
Take the Monterra sale. It started out, in the summer of 1995, as a reasonably conventional liquidation of several million dollars’
worth of condominium and chalet lots in the Blue Mountain resort area. Blue Mountain Resorts Ltd., which is owned by the descendants of its founder, Jozo Weider, owns a land development company called Craigleith Development Ltd., which in turn owns 50 per cent of Monterra Properties Ltd. Monterra, of which Eagleson owns 25 per cent, owns the Blue Mountain golf course, and has spent the past 15 years developing, with mixed success, residential housing on the property. (It was one of these developments, á 50-acre parcel of unserviced land on the remote southern edge of the development, that got Eagleson into trouble in the first place when it was discovered, 1989, that he had been using hockey players’ pension money to finance land flips among business associates.)
By October of last year, the Monterra group, whose owners also include William Barry Loft, a Collingwood businessman with a second address on Grand Cayman Island, had abandoned the efforts of their real estate agents to bring in a big brand-name developer. Monterra decided to go with a local buyer, a small company called Westbrook Development Corp. Westbrook snapped up roughly 300 undeveloped residential lots for $3.6 million, with help from Eagleson and his partners, who made the deal possible by providing Westbrook with a $2.1-million vendor-take-back mortgage.
So far, not too bad. But then, in a move that defies logic, the Monterra group signed this mortgage, its largest remaining asset other than the golf course, over as security for a $216,000 loan—which, it should be noted, was made by Monterra investors to the company itself. That loan is now held by Craigleith and a mysterious investment company called Collingwood Triangle Financial Inc., run out of Lunenberg, N.S., by James B. Isnor. According to mortgage documents, the annual payments of $126,000 on the $2.1-million mortgage will be paid to Craigleith and Isnor—in the latter case being held in trust for Isnor’s unidentified clients—until October, 2000.
Nobody connected with these transactions responded to requests for an explanation. But Eagleson investigators are suspicious that it is another one of the former lawyer’s trademark schemes for moving money and paper around in such a way that nosy outsiders cannot find the source or destination of the cash. “This looks to me like a way to hide the money and take an advance on the interest,” observed retired Toronto teacher Susan Foster, who, as a result of her relationship with former NHL defenceman and Eagleson nemesis Carl Brewer, has spent 20 years tracking Eagleson’s use of players’ money.
Eagleson, she explained, always hid behind proxies. “It seems to be getting a little more sophisticated,” she added, “which it needs to be—because he’s under so much scrutiny.”
Scrutiny is an understatement. Now that Eagleson has finally admitted that he bilked clients and corporate sponsors throughout his career, the serious money chase is on. A growing list of victims, creditors and professional investigators are determined to follow the path of every dollar the disbarred lawyer earned or stole during the years he carried on the activities that landed him in prison. They include U.S. investigative journalist Russ Conway of the Lawrence, Mass., EagleTribune, whose Eagleson exposés led to investigations by both the FBI and RCMP, and former Eagleson hockey client Mike Gillis, who is owed $570,000 under a 1997 court judgment. “There are assets,” Gillis said last month, when an imprisoned Eagleson sent his lawyer to court in an effort to postpone having to answer Gillis’s questions about Eagleson’s financial affairs. “And we will find them.” The FBI, moreover, is launching another investigation into the sources and whereabouts of the money they believe Eagleson has stashed away in foreign countries.
Court documents show that Eagleson saw his potential creditors coming. He went to work almost from the day he discovered that he was the subject of an FBI investigation, setting up a paper trail to hide his thefts. In the weeks since he pleaded guilty to criminal fraud, Maclean’s has discovered that Eagleson did much the same thing to protect his money.
It started in February, 1992, when Eagleson transferred the deed of his $1.1-million home in Toronto’s Rosedale neighborhood to his wife, Nancy—probably the world’s most popular legal device for keeping assets away from creditors. A month later, Eagleson wrote a memo to Toronto accountant Marvin Goldblatt, a close business associate, asking for Goldblatt’s help. “I spoke to Nancy regarding the CIBC,” Eagleson wrote. “I have explained why we should put the mortgage on the house for self-protection. I want to set up a meeting for you, me, Nancy, Allen [his son]” and
another family accountant “to go over all my assets and liabilities.” By the summer of 1993, Eagleson had his plan in place and had liquidated $1.25 million worth of assets in his own name, and transferred $1.3 million or more to family members. Business associates, moreover, suddenly sold or refinanced $1.1 million of the Monterra real estate assets. Nobody knows where all this money has gone, although Conway and the FBI are looking into other Ontario property developments, as well as Florida and Switzerland. And between 1994 and the fall of 1997, when Eagleson negotiated his plea bargain, he continued to carry out a systematic and sweeping liquidation of tangible assets: with one or two exceptions, practically everything that Eagleson owned has been transferred to relatives or turned into cash.
That process has involved more than just houses, cottages, mortgage loans, small commercial investments and condominium lots. Eagleson has also been selling furniture. For many years, he collected valuable antiques for his office, depreciating them by 20 per cent each year and then, when they were no longer deemed to be worth anything on paper, moving them into one of his homes. The Eaglesons furnished their Rosedale houses—from 1976 to 1997 they have owned
three—with English Georgian mahogany furniture that was described by one expert as “high quality for Toronto.” According to keen observers, Eagleson started unloading his English antiques at leading auction sales over the past few years, explaining that the family was moving to French country furniture instead. No one can say how much he has cleared on these sales, although it is thought to be many thousands of dollars.
That is a drop in the financial bucket, however, compared with what has been going on
in Collingwood, a popular but economically fragile region where Eagleson has for many years ranked among the leading part-time citizens and enthusiastic investors. His real estate purchases in the area go back to the 1960s. In addition to the 25 per cent of Monterra, acquired by Eagleson some time in the late 1970s and now worth an estimated $1.5 million, Eagleson has also owned the following assets:
• a luxurious waterfront cottage, built in 1986 and sold in 1994 for $510,000;
• a spectacular Victorian farmhouse on the top of the Niagara escarpment near Collingwood, offered for sale at $475,000 until the listing expired last December;
• at least three and possibly four chalet lots in the developed portion of the Monterra golf course lands, which were all sold in 1996 and 1997 for prices ranging from $63,000 to $65,000;
• millions of dollars’ worth of building loans and mortgages provided to local construction companies and developers by Eagleson and his clients, many of which were repaid or refinanced soon after the FBI and the RCMP started taking a closer look at the source of this money.
According to land registries, Eagleson and his business cronies have cashed in just under $10 million worth of assets in this area during the past six years—of which $1.6 million can be directly traced to Eagleson. On top of that, his children, Jill Anne and Allen, sold their Georgian Bay cottage for $225,000. Finally, while Nancy Eagleson did not manage to find a buyer for the farmhouse, it has essentially changed hands. It was mortgaged last summer to Eagleson’s Toronto lawyers, Brian Greenspan and Charles Wagman, for $500,000. This was done in June, 1997, on the same date that Greenspan and Wagman were granted an identical mortgage on the Rosedale house. (This debt was repaid in August when Nancy Eagleson sold the house to Gloria Rosenberg, whose husband, Alvin, is a judge of the Ontario Court’s general division, for $1.1 million.)
As for the final tally? Since 1992, Eagleson has personally liquidated more than $3 million worth of Canadian assets, including his historic office building in downtown Toronto, and transferred assets worth at least $2.6 million to members of his immediate family. Third-party investors and private companies closely connected with Eagleson have raised another $8 million in the same period, for a total of $13.6 million—not including the $2.5 million worth of assets Eagleson continues to own, which brings the total to more than $16 million. This does not include any of Eagleson’s U.S. assets, such as a Florida condominium and a New York City co-operative apartment, which were seized by the U.S. government in 1994 and sold to individuals who had to sign legal documents declaring that they had no relationship with Alan Eagleson. The proceeds—approximately $615,000—were used as a down payment on the $ 1-million fine Eagleson agreed to pay under his U.S. plea bargain. The $385,000 balance was paid by cheque, presumably out of Canadian assets.
The assorted assets Eagleson still owns range from a $60,000 loan to a land development project called Heritage Plateau Inc., located across the road from the former Eagleson cottage on Collingwood’s Millionaire’s Row, and a half interest in a Monterra chalet, to a 25-per-cent share of the $3.5million golf course and, finally, $525,000 of the $2.1-million mystery mortgage. Family members have emerged owning three substantial houses: besides the Collingwoodarea farm that is pledged to the lawyers, the Eagleson children own two midtown Toronto houses, at 35 Edith Ave. and 3 Oswald Cres., that Jill Anne Eagleson and her sister-in-law, Yasmine Margaret Eagleson, purchased for a total of more than $600,000.
These properties are debt-free—not counting the $115,000 interest-free mortgage provided by Nancy Eagleson to her daughter on the day Jill Anne bought her new house. An Eagleson family company, meanwhile, continues to own a lease on a property known as “the hockey flat” near Buckingham Palace in London. This 86-year lease was purchased in 1988 for a minimum of $400,000. Nancy Eagleson has told friends and antique dealers that she is decorating a new flat in London, but nobody seems to know whether this is the flat that Eagleson purchased for the convenience of his sports cronies or if she is settling into a newer, more fashionable address.
Eagleson’s Collingwood acquaintances are unwilling to criticize him for pulling so much money out of the area because they are convinced he is all but broke. “He’s selling his assets to pay his bills, there’s no question about that,” said Peter Lush, the local realtor who sold the waterfront cottage. According to business sources, Royal LePage Ltd. real estate agents enlisted to sell the Monterra development back in 1995 came away from meetings with the impression that Eágleson could no longer pay his share of expenses. It turns out, however, that these agents no longer feel sorry for him. In fact, they now rank among his potential creditors. After presenting the Monterra group with a $3.6-million offer in the late summer of 1997, the professional brokers found themselves squeezed out at the last minute because Eagleson, Loft and Craigleith had come up with a competing—and, the real estate agents claim, identical—deal, except for the strange flip of the $2.1-million vendor-take-back mortgage. The upshot of all this is that Eagleson now faces yet another lawsuit, filed Christmas Eve in a Toronto court, in which the Royal LePage agents claim that the Monterra group stole their ideas and has cheated them out of more than $200,000 in commission.
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