Officials ‘review file’ on pizza firm executive

Saturday, The Star revealed that Austin was involved with a secret web of companies that has bled as much as $1.5 million from other people’s pockets between 1989 and 1993.

The Toronto Star
June 29, 1993

Officials ‘review file’ on pizza firm executive
Federal bankruptcy officials are probing allegations that Pizza Pizza executive vice-resident Lorn Austin hid a web of companies and money from them.
Kevin Donovan

“We’re reviewing the file,” said Bill O’Connor, assistant superintendent of bankruptcy for the consumer and corporate affairs department.

“If we decide there is a case for investigation we’ll discuss it with the RCMP,” said O’Connor. “And I’m sure in this case we will be discussing it with the RCMP.”

Saturday, The Star revealed that Austin was involved with a secret web of companies that has bled as much as $1.5 million from other people’s pockets between 1989 and 1993.

But Austin who claims he is bankrupt, gave a sworn statement to federal bankruptcy officials last November, saying he has been neither officer, director nor owner of any companies since 1984. That’s the year he was arrested, and subsequently jailed, for a multi-million-dollar gem and timeshare condominium fraud in Florida.

Austin stated he had no assets except some furniture, and only $250 cash in the bank.

It is a federal offence to hide assets or lie on a bankruptcy statement. The job of investigating any bankruptcy offence falls to the Royal Canadian Mounted Police.

A Star investigation has shown Austin was involved with at least 10 companies since 1989, and was president of four of them.

They include a family holding company; an investment company that channeled money into numerous schemes; a numbered company that own land and a house beside Pizza Pizza chairman Michael Overs’ 1.6-hectar (4-acre) estate; a company that was listed with the Toronto Real Estate Board as vendor of that estate; a company that delivered food for Pizza Pizza; a children’s clothing company; a Pizza Pizza advertising company; an alternative newspaper; and a collection agency that purchased another collection agency.

The agency – Madison Credit and Collection Services – is under investigation by the provincial consumer ministry after an estimated $300,000 was apparently collected on behalf of many Toronto companies and not handed over to them. Madison was overseen by Austin and financed through some of his other companies. His brother-in-law, Alex Simmons, was its president.

Austin, in an interview Friday described himself as “an adviser, for the most part” to these companies.

“The truth of the matter is I’ve done nothing wrong. And all the innuendoes in the world won’t change that,” the 43-year-old Austin said.

In addition, forensic accountants hired by Pizza Pizza franchisees have discovered that an unexplained $425,000 from the franchisees’ advertising trust account was paid to Austin between 1990 and 1992, according to a court affidavit.

The franchisees are involved in a dispute with Pizza Pizza over the dispersal of money they pay into advertising, rent and delivery pools that the franchisees believe are trust accounts.

Austin said the money was a ”management fee” paid to a company he was involved in.

Austin went bankrupt in late 1991 owing $3.8 million to Revenue Canada and North York lawyer, Charles Chaiton as a result of debts prior to his prison term in the mid-1980s.

Austin told The Star that his bankruptcy trustee viewed his file and found nothing wrong with it.

But Chaiton and Revenue Canada have opposed his discharge from bankruptcy – which would mean he could begin with a clean slate – and so he is still bankrupt.

With the new information that has surfaced, bankruptcy official O’Connor said it will take a week or two to review Austin’s file before deciding if the RCMP should be involved.

Meanwhile, Metro police want to question Pizza Pizza chairman Michael Overs in connection with an altercation that took place on the picket line outside the company’s head office on Jarvis St. yesterday afternoon.

Sargeant Wolf Frohlich of 52 division said detectives would attempt to speak to Overs today.

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