Royal Group’s De Zen and others charged with fraud (June 23, 2008)
The Royal Canadian Mounted Police (RCMP) have laid fraud charges against Royal Group Technologies Ltd. founder Vic ...
The Royal Canadian Mounted Police (RCMP) have laid fraud charges against Royal Group Technologies Ltd. founder Vic De Zen and other former executives of the plastic building products manufacturer.
The RCMP allege De Zen and three other former executives defrauded the company of $27.4 million in a deal involving property north of Toronto.
De Zen and four other men, including two named in the other charges, are also alleged to have defrauded the Woodbridge, Ont.-based Royal Group of $2 million in the sale of a subsidiary. The alleged offences occurred during 1997 and 1998, and the charges come almost five years after De Zen stepped aside as chief executive officer.
“I am completely stunned by these charges,” De Zen said in a prepared statement. “For five years my name has been dragged through the mud with unfounded, sensational allegations leveled against me. [These allegations are] without merit, and I intend to fight them vigorously in court.”
The alleged $27.4-million fraud relates to a deal in which land in Vaughan, Ont. is said to have been purchased by individuals closely associated with Royal Group and then sold to the company at an inflated price. In addition to De Zen, those charged include Douglas Dunsmuir, who was Royal Group’s general counsel and succeeded De Zen as president, along with two former chief financial officers, Gary Brown and Ron Goegan.
The alleged $2-million fraud relates to the sale of Royal Group subsidiary Steelwood Doors to Premdor Inc. The RCMP allege the warrant was not entered into Royal Group’s books and instead was exercised by senior executives for their own benefit. Charged in that case are De Zen, Dunsmuir and Goegan, along with Luciano Galasso, a former vice-president of Royal Group, and Gordon Brocklehurst, former director of accounting.
Royal Group, which manufactures plastic pipe, window frames, outdoor furniture and other products, was founded by De Zen in 1970 as Royal Plastics Group.
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