Canada

The Eagle returns

JOHN NICOL,KIMBERLEY NOBLE August 17 1998
Canada

The Eagle returns

JOHN NICOL,KIMBERLEY NOBLE August 17 1998

The Eagle returns

Canada

JOHN NICOL

KIMBERLEY NOBLE

The road leading up Blue Mountain from Ontario’s Georgian Bay goes past a 40-hectare farm where a derelict barn sits amid overgrown brush, wild ravines and a neglected apple orchard. The land is also home to wild turkeys and a beekeeping operation, but foremost it has been the stuff of developers’ dreams and, over the past decade, the centre of a number of mysteries. Few people knew who owned it, and even fewer knew what happened to the almost $2 million in mortgages on the property—or why creditors holding those mortgages walked away this spring rather than fight a $92,000 foreclosure.

Answers were hard to come by until the nettlesome presence of more than two million bees recently caught the owner’s attention. Maclean’s has learned that deposed hockey czar Alan Eagleson, fresh from a six-month stint in jail, stepped forward in July to demand that 40 hives be evicted from the property. Graham Roberts, a beekeeper there for 20 years, said he was so confused by the changing ownership he didn’t know who was supposed to get the annual pail of honey the operation owes as rent. “AÍ said he owned it now,” said Roberts, “and his son wanted to build a house on the clearing where the bees are.”

Eagleson, on parole for his conviction on three counts of fraud, is back doing what his clients and business associates say he always did: micromanaging every aspect of his business empire, and keeping his assets hidden and mobile. His conversation with the beekeeper, though, sheds light on a trail of convoluted business transactions that have acted to conceal Eagleson’s connection to this farm across a waterfront highway from Georgian Bay’s so-called Millionaire’s Row. The foreclosure of this property—which Eagleson has secretly controlled for 10 years—provides another glimpse at how much the disgraced hockey chieftain may be worth, and the moves that keep him a step ahead of current and potential creditors.

First in line is former hockey player Mike Gillis, who was awarded $570,000 in damages and legal costs last year after successfully suing Eagleson over a $62,000 insurance claim. Later this month, the Royal LePage Ltd. real estate firm will commence pretrial work in a suit against Eagleson and partners for more than $200,000 in commission fees from a land deal in Collingwood, Ont. But the biggest threat to Eagleson’s future, and the hockey establishment he left behind, comes from former players Dave Forbes, Rick Middleton, Ulf Nilsson, Brad Park and Doug Smail who have launched a racketeering civil suit in Philadelphia against Eagleson, 22 National Hockey League teams, former NHL commissioner John Ziegler and Chicago Blackhawks owner Bill Wirtz. The plaintiffs have yet to put a dollar sum on the damages sought but informed estimates suggest it could reach $1.5 billion.

An investigation by Maclean’s last January found that Eagleson had liquidated or hidden more than $8 million in assets since the FBI announced its investigation of him in December, 1991. Although creditors are convinced that Eagleson has millions stashed away, he told a court in late 1996 that he was worth less than $1 million. That contradicts claims by Russ Conway, Boston-area sports editor and author of the Eagleson exposé book Game Misconduct. Conway says that in 1997 alone Eagleson shifted $1 million to Britain, where he owns a flat near Buckingham Palace.

But Eagleson’s admission to the beekeeper unravelled at least one attempt to hide his assets in the Collingwood area, a resort region where his wife grew up and where he has flipped land and mortgages like an NHL general manager moving players at the trading deadline. The farm with its bees and derelict barn is now owned by Collingwood Triangle Financial Inc., a company that seized control of the land through the foreclosure, even though land registry documents suggest it had a long list of creditors owed almost $2 million. Among them were Horizon Consultants International Inc. of Tampa, Fla.—a company linked to Eagleson by several investigations—and a consortium that included Toronto developer Richard Kreistein. Krelstein told Maclean’s that he was “a bit miffed” that his name was still on the title when the property was foreclosed in June. “It didn’t make any sense because we had sold it in 1992.1 went back and looked at our documents, and we had collected our money. I called the lawyer and he gave me some flimsy excuse.” All outstanding debts were secured by mortgages against the property, which was purchased in 1988 for $600,000 with the intention of developing it into chalet lots.

In the fall of 1996—when Eagleson was the subject of an RCMP investigation, had charges pending in the United States and had to appear in court for the Gillis lawsuit—he purchased the original mortgage on the property. He intended at first to place it in the name of his mother-in-law, Clarice Fisk, but when she died that October, Eagleson instead assigned the valuable first mortgage to Collingwood Triangle. The only name listed on Collingwood Triangle Financial papers is James B. Isnor, a lawyer in Lunenberg, N.S., who refuses to divulge whom he represents. But the paper trail points to Eagleson, who instructed the lawyers who handled the transfer to send any bills directly to him at 37 Maitland St. in Toronto, the business address of his operations for nearly a decade.

Alan Eagleson keeps his assets hidden

In many ways the derelict farm deal mirrors what Eagleson and his Collingwood-area business associates did last fall when they sold a big block of undeveloped condominium lots adjacent to the Monterra golf course in the Collingwood area. Monterra’s investors, including Eagleson, who owns 25 per cent, sold the lots to Westbrook Development Corp., a local company, for $3.6 million, with the purchase financed by $1.5 million in cash and a $2.1million vendor-take-back mortgage. (This is the deal that led to the Royal LePage lawsuit. Its agents claim the Monterra group stole their ideas and cheated them out of $200,000 in commissions.) Strangely, all rights to the $2.1-million mortgage were immediately transferred by Monterra to Collingwood Triangle, as security for a $216,000 loan that had been assigned to Collingwood Triangle by Eagleson and related creditors. At the time, nobody could trace Collingwood Triangle back to Eagleson.

In deals with Monterra and the old farm, the wheeling and dealing is done by the creative use of mortgages. In 1992, after the FBI began investigating his actions, he put a mortgage on his Toronto home in order to get his money out in case the property is seized. His family’s most recent moves, which put $400,000 in his wife, Nancy’s, hands, have a similar effect. On March 17, son Trevor and daughter-in-law Yasmine put a mortgage on their Toronto home at 3 Oswald Cres. for $250,000. The same day, daughter Jill Anne got a mortgage for $150,000 on her Toronto home at 35 Edith Dr. On June 12, Nancy sold the family’s Collingwood farmhouse for $400,000 to Yasmine. Eagleson’s lawyers, Brian Greenspan and Charles Wagman, already had a $500,000 lien against the family farm, and while their client was in jail, the lawyers further secured their fees with $500,000 liens on the two children’s homes.

Meanwhile, in the huge racketeering civil suit against Eagleson and the NHL in Philadelphia, one of the players’ lawyers, Martin Oberman of Chicago, told Maclean’s they are asking for “what they should have been paid had they not had a union leader on the take. It’s based on what Eagleson was indicted for and pled guilty to.” The suit contends that NHL owners allowed Eagleson, as head of the players’ association, to skim profits from international hockey “because it kept the union docile.”

The owners, meanwhile, contend that the players have passed the four-year statute of limitations for suits under the Racketeer Influenced and Corrupt Organizations (RICO) Act.

If the case is allowed to proceed—the NHL submitted its final brief two weeks ago—the players will argue that a union leader dedicated to their interests would have secured richer concessions for them at the time of the 1979 merger between the NHL and the World Hockey Association and would have established free agency and salary disclosure earlier—which would have increased the players’ market value. The players will attempt to show how high salaries would have risen if Eagleson had not helped the owners to keep them down. One American legal expert estimates that the shortfall in player revenues could add up to $500 million, meaning the treble damages allowed in civil RICO suits could lead to a fine of as much as $1.5 billion.

The players had no idea what their union chief was up to in the 1970s and 1980s, says Oberman, and were convinced he was doing his best for them: “They all believed in Alan Eagleson.” But that trust was shattered in January, when Eagleson finally admitted that he had bilked them throughout his career, and his recent financial manoeuvrings are unlikely to inspire new trust.